The Knesset Finance Committee on Sunday gave its final approval to the long-term savings plan for every child, to take effect January 1, 2017. Starting on this date, the state, through Social Security will deposit 50 shekel ($13.10) each month for every child until he or she turns 18, or 21, if the child or their parents decide to stay in the program an additional three years, in which case they would receive a 500 shekel ($131.00) bonus from Social Security.
Parents will be allowed to set aside an additional 50 shekel for their child out of the children’s allowance they receive from Social Security. They will be asked to pick a savings bank or a fund, without mobility between those plans. The plan is expected to yield for every participating child as much as 22,000 shekel ($5,764.00) by the time they turn 21.
The plan will be presented for two final votes at the plenum in the coming days.
Finance Committee chairman MK Moshe Gafni (United Torah Judaism) congratulated the Finance Ministry on its willingness to backdate the implementation of the law to as early as the start of next year. He reminded the committee members that it was his faction which pushed for the savings plan. He also expressed satisfaction at the ministry’s returning children’s allowances to their level in 2013, before then Finance Minister Yair Lapid (Yesh Atid) had his way with them.
The monthly deposits will be adjusted according to the cost of living index. All management fees for the individual savings accounts will be paid by the state.
The committee approved a 2.7 billion shekel ($710 million) indemnification across the board to pay for the new plan through 2019, with retroactive payments for 2015-16.
MK Manuel Trachtenberg (Zionist camp), who was his party’s nominee for finance minister before the last elections, said he is voting for the plan because it is good and valuable, but protested the indemnification at the expense of other government social programs.
MK Mickey Levy (Yesh Atid) also praised the program and condemned the indemnification, which was added to earlier cuts, comprising altogether an estimated 5.2% of the current budget.JNi.Media