The government's proposed economic plan for 2025 includes no proposals to cut coalition funds or close unnecessary government offices. Instead, the coalition intends to impose the costs of the war on those who are already struggling under the heavy burden of the rising cost of living and who have become increasingly vulnerable as a result of the war. The budget proposal includes several sections focused on harming Israel's most at-risk populations: freezing cost-of-living increases to government benefits, cuts to work grants, freezing the minimum wage and hurting minimum wage income supplement recipients, freezing tax brackets and credit points, neglecting the obligation to ensure food security, cuts and reductions in the public sector (in education, health, welfare services), and raising the minimum National Insurance and National Health Insurance fees.
Below are explanations about the proposed plan as well as links to the legal correspondence (Heb) from the Association for Civil Rights, Kav LaOved (Worker's Hotline), and other activists and civil society organizations working for the rights of diverse populations in Israel. We demand that the government and the Knesset act to support the country's most vulnerable, especially during emergencies and war. Treating these populations as a convenient source of funding for the budget deficit created by the war is both illogical and immoral.
Freezing Subsistence Allowances: The plan proposes to freeze the linkage of the consumer price index to National Insurance subsistence allowances, including disability benefits, alimony, income support, and income supplements. These allowances are meant to ensure the basic right to live in dignity, which is enshrined in the Basic Law: Human Dignity and Liberty. These allowances are already insufficient: according to National Insurance Institute data, poverty rates among recipients of income support and alimony benefits stand at 54% and 40% respectively, and many recipients are forced to forgo medications, food, or electricity. Adv. Bendel argued that canceling the linkage of subsistence allowances to the index effectively constitutes a cut in benefits: if price increases continue as expected while benefits remain fixed, recipients will be increasingly forced to forego basic necessities. Without an alternative system for allowances or alternative support for recipients, this measure is unlawful.
Freezing Work Grants: The work grant is designed to support the poorest workers: those who earn very low wages and are parents, aged 55 and above, or people with disabilities. Under the proposed plan, the eligibility ceiling amount will not be updated, meaning that even small wage increases will prevent or reduce low-wage workers' eligibility for the work grant. This harms the poorest workers in the economy.
Minimum Wage Freeze: Freezing the minimum wage primarily affects those earning minimum wage or slightly above it, many of whom work under exploitative employment arrangements such as hourly employees, contract workers, and others. Freezing their wages, given inflation and rising prices, effectively means cutting their already low wages. While the business sector's difficulty in dealing with the war's implications is clear, it is unacceptable that instead of supporting employers, the state expects minimum wage workers to finance the economic downturn.
Tax Bracket Freeze: Freezing tax brackets disproportionately affects those with low and middle incomes, and not high-income earners. Instead of the freeze, an additional tax bracket could have been added: for example, a tax bracket for those earning more than 30,000 NIS per month, instead of imposing taxes on those earning slightly more than 7,011 NIS.
Food Security: The State informed the High Court that there would no longer be coalition funds in the Interior Ministry for food vouchers, and that food security budgets would be transferred to the Welfare Ministry. Although there are over 250,000 families experiencing severe food insecurity, there is no commitment in the budget to support the Welfare Ministry's food security initiative, and it is unclear whether it will be included in the base budget.
Raising Minimum National Insurance and National Health Insurance Fees: The proposal suggests setting a minimum fee for health insurance, and increasing National Insurance fees by 10% for non-working insured individuals. This means that insurance fees will increase for low-wage workers and the unemployed, while higher income earners will continue paying existing rates. This is clearly an inequitable measure that will effectively reduce the wages of workers earning the least.
Association for Civil Rights petition to the Finance Minister regarding allowance freezes, 29.9.2024 (Written by: Adv. Maskit Bendel) (Heb)
Organizations' petition to the Government and Knesset, 27.10.2024 (Written by: Adv. Becky Cohen Keshet, Adv. Ella Alon) (Heb)
Petition from the Association for Civil Rights, Kav LaOved, and the Workers' Rights Clinic at Tel Aviv University to the Finance Minister, 28.10.2024 (Written by: Adv. Elad Cahana) (Heb)
Association for Civil Rights comments regarding allowance freezes, 28.10.2024 (Written by: Adv. Maskit Bendel) (Heb)