Government aid during the COVID-19 crisis proved critical to preventing the standard of living in Israel from dropping by 10%, according to the findings of the National Insurance Institute's annual Poverty Report.
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Released Wednesday, the report noted that while overall, the standard of living went up by 2.4% in 2020, some 1.92 million Israelis – 21% of the population – still fell below the poverty line, 864,600 of them children, and 158,700 thousand of them people over retirement age, according to financial daily Globes. This was a decrease from 2019, when 21.6% of the population fell below the poverty line.
Despite the improvement, some 665,000 children and 500,000 families in Israel remain food insecure.
The poverty line is calculated in relation to median net income per capita, which came to 2,811 shekels ($904.69) a month in 2020, Globes explained. The addition of other forms of income from investments and other forms of support outside of that provided by the National Insurance Institute raised the poverty line by 230 shekels (around $74).
A two-person household with a joint income below 5,623 shekels ($1,811), a couple with one child making less than 7,450 shekels ($2,400), and a couple with three children earning under 10,543 shekels ($3,396) would all be considered below the poverty line.
Among families in which at least one member was self-employed, the poverty rate reached 16.6%. Among employees, that rate dropped from 17.8% in 2019 to 17% in 2020.
Israel's Gini coefficient, which demonstrates the degree of income and wealth inequality, shows a decline in net income inequality over the last six months. Compared to other countries, the social assistance provided at this time placed Israel near the Organization for Economic Cooperation and Development average compared to its low ranking in previous years.
Jerusalem tops Israel's poverty list, followed by the Judea and Samaria region, and the southern city of Ashdod.
The National Insurance Institute has recommended the raising of allowances that serve as a last safety net for low-income families or those in temporary distress, among them income benefits, pension funds, and unemployment benefits.
According to Welfare and Social Services Minister Meir Cohen, "What stands out most from the report is that when a state intervenes and has a welfare policy, it aids the weaker populations and lifts them out of poverty.
"I grew up in the periphery [region]. Every day, I see the people, the stories behind the numbers that appear in the report. If there's one thing that keeps me up at night it's poverty and inequality, and that's why the report sharpens for me the steps that were taken for the good of weaker sectors like the continued doubling of stipends, reforms on rights for people with handicaps, benefits for the unemployed returning to the labor force, assistance for senior citizens, and others will be implemented and in practice lift weak populations out of poverty. That is my mission."
NII Director-General Meir Spiegler said: "From the outbreak of the coronavirus crisis, the National Insurance [Institute] has understood the magnitude of the event and made societal and social decisions like the unpaid leave framework, in parallel with the promotion of legislation aiding populations that found themselves in a difficult situation, like those aged 67 and over, single-parent families, and those eligible for income benefits, which saved hundreds of thousands of families from poverty, and positioned the State of Israel anear the OECD average in investment in citizens during the coronavirus crisis period, which served as a wakeup call to Israeli society on the need for independent and stable national insurance that provides a social safety net and promotes welfare policies for those who need it. This is the human and economic conscience in a properly functioning society."
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