Government adds NIS 480 million for groups in need to virus handout plan

Addition brings total estimated cost of proposal to NIS 6.48 billion; reportedly comes following demands from Blue and White party

Self-employed Israelis block a road in Tel Aviv, during a protest calling for financial support from the government, July 11, 2020. (Miriam Alster/Flash90)
Self-employed Israelis block a road in Tel Aviv, during a protest calling for financial support from the government, July 11, 2020. (Miriam Alster/Flash90)

The government on Wednesday night approved adding NIS 480 million ($140 million) to the budget for a coronavirus economic package announced by Prime Minister Benjamin Netanyahu last week, bringing the estimated total cost of the proposal to NIS 6.48 billion ($1.89 billion).

The additional funds will pay for larger handouts for Israelis who are more in need of financial aid. The change in the plan was made following demands by the Blue and White party, the Ynet news site reported.

It wasn’t immediately clear which groups will receive the increased funding, but the Prime Minister’s Office said Sunday that people “receiving support payments for convalescent care; [people who are of] handicapped status, [people on] income assurance, needy new immigrants (who have been in the country for at least two years), the unemployed over 67, and the elderly who receive income supplements” will all receive larger grants.

Under the initial NIS 6 billion ($1.75 billion) plan unveiled by Netanyahu and Finance Minister Israel Katz, all Israelis over 18-years-old were to quickly receive at least NIS 750 ($218), regardless of income or whether they were hurt economically by government measures to contain the virus.

However, after criticism from top finance officials, Netanyahu’s coalition partners and the public, the proposal was tweaked on Sunday, with those earning over NIS 640,000 per year and civil servants making over NIS 30,000 (approximately $8,700) per month no longer eligible for the handouts.

The plan has reportedly run into legal and technical difficulties, despite Netanyahu’s vow to deliver the handouts quickly, according to a Tuesday Channel 12 news report.

Prime Minister Benjamin Netanyahu, right, listens to Foreign Minister Israel Katz during the weekly cabinet meeting at his office in Jerusalem, October 27, 2019. (Gali Tibbon/Pool Photo via AP)

Among the obstacles encountered by the government is that the National Insurance Institute lacks the bank account numbers of some 2 million citizens, making it unclear how it can transfer them the promised funds, Channel 12 news reported Tuesday.

Another reported problem is how to determine which Israelis earn over NIS 640,000 (approximately $186,000) a year and would be ineligible for the grant.

Furthermore, according to the Tuesday TV report, the decision not to grant the money to civil servants earning more than NIS 30,000 a month is expected to be reversed due to unspecified legal difficulties.

The original plan as outlined by Netanyahu would have seen all couples with one child receive a one-time payment of NIS 2,000 ($583), rising to NIS 2,500 ($729) for those with two children, and NIS 3,000 ($875) for those with three or more. Single Israelis aged 18 and over would each receive NIS 750 ($218).

Senior Finance Ministry officials, including budget chief Shaul Meridor and director-general Keren Terner Eyal, opposed the plan ahead of its unveiling, likening it to “throwing suitcases of money that we don’t have into the sea,” according to Channel 13.

Meridor has come under fire from Netanyahu and his allies over his opposition to the plan, with Channel 12 reporting that Katz rebuked him during a meeting on Monday.

“Your public comments against the government are grave. Whatever you and others have to say, say it in the room,” Katz was quoted as saying. “If you want to express yourself politically and publicly, then go into politics.”

It was unclear to which remarks of Meridor’s Katz was referring.

According to a Channel 12 news poll published last week, 56 percent of Israelis believe Netanyahu’s handouts-for-all package was motivated primarily by political considerations, versus 36% who believe it was conceived out of a desire to juice the economy. Another 8% did not know.

Ministers at Sunday morning’s cabinet meeting clashed over the controversial handouts, with Minister Gila Gamliel proposing that vouchers be given instead of cash transfers, while Higher Education Minister Ze’ev Elkin said that grants should only be given to those who receive income benefits.

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