Netanyahu’s plan to give virus handouts to most Israelis said to hit new snags

TV report says state lacks bank account details of some 2 million people, doesn’t know how to sift out high earners ineligible for the grants

Owners of event halls protest outside the Knesset in Jerusalem to call for financial support from government over restrictions on their businesses due to the coronavirus, on July 21, 2020. (Yonatan Sindel/Flash90)
Owners of event halls protest outside the Knesset in Jerusalem to call for financial support from government over restrictions on their businesses due to the coronavirus, on July 21, 2020. (Yonatan Sindel/Flash90)

A plan championed by Prime Minister Benjamin Netanyahu to send money directly to most Israelis in a bid to stimulate the economy amid the COVID-19 pandemic has reportedly suffered legal and technical difficulties.

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.

Under the initial NIS 6 billion ($1.75 billion) plan unveiled by Netanyahu and Finance Minister Israel Katz last week, 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.

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

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.

As part of the changes to the stimulus plan, 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 (though currently unspecified) grants.

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.

Shaul Meridor, head of the Finance Ministry’s budget department, speaks at the Maariv newspaper conference in Herzliya on February 26, 2020. (Miriam Alster/Flash90)

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.

Additionally, ministers from the Blue and White party reportedly said that changes should be made so that more money goes only to those who really need it.

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