The proposed budget for 2025, which is meant to finance the substantial costs of the ongoing war, will hurt Israeli women’s financial well-being, a new report from the Adva Center finds. The progressive think tank published a report earlier this week arguing that women will suffer from the planned freeze on tax brackets, supplementary employment grants, and child allowances, as well as from the proposed cut to government salaries.
The Israeli supplementary income grant, previously known as negative income tax, is meant to encourage Israelis to work by providing government funds to parents, disabled people, and older Israelis working but earning under a certain amount. Single parents have a higher income ceiling to be eligible for the grant and also receive higher payments. Generally, both the maximum income eligible for the grant and the amount of the grant itself rise each year, but the 2025 budget proposes freezing those amounts at the 2024 level.
According to data provided by the state comptroller, 62% of those receiving a supplementary income grant are women. Adva researchers Yael Hasson and Miri Endeweld use that data to argue that women will be disproportionately hurt by the proposed budget.
An earlier draft of the Arrangements Law, the omnibus reform bill presented alongside the budget, proposed freezing all state allowances and grants. In the new proposal, most state allowances will see the usual increase commensurate with the average wage—but the child allowances provided to all parents with children under 18 will be frozen at the 2024 level. Instead of freezing other state allowances, the new draft proposes raising the National Insurance contribution rate. For example, workers earning 7,522 shekels ($2,001) per month will now be expected to contribute 1.2% of their wages to National Insurance rather than the current rate of 0.4%—90 shekels ($24) per month instead of 30 shekels ($8). That change will decrease the net income of lower-wage Israelis by dozens of shekels each month.
The new proposal would also get rid of two paid days off per year, worth the equivalent of 800 shekels ($213).
Around 65% of Israel’s low-wage earners are women, and more than one-third of working women earn less than minimum wage each month. Cuts like these that affect lower-income Israelis will therefore have a disproportionate effect on women.
Value-added tax, Israel’s equivalent of sales tax, is also expected to rise to 18% from its current rate of 17%. Value-added tax is a regressive tax, since lower earners direct a larger portion of their income to consumption than higher earners. “In the absence of a political arrangement and in the lack of willingness to end the war and focus on recovery and rehabilitation of the collapsing systems, the heavy prices will only continue to rise and the gaps will widen,” the researchers wrote.
The public sector is also expected to face a cut of between 5-6 billion shekels ($1.34-$1.6 billion), most of which will be concentrated in the fields of education and health. There, too, women will be most affected. Women make up 62.5% of public sector workers, and the parity is even higher in “pink-collar” fields. Three out of every four workers in the Ministries of Health and Education are women, and 78% of workers in the Welfare Ministry.
Numerous Israeli women’s organizations, including Naamat, Women Building an Alternative, and Lo Omdot MeNegged, called on the Knesset Committee on the Status of Women and Gender Equality to hold a meeting on the topic. “We’re aware of the fact that, as a result of the costs of the ongoing war and the complicated reality in which we live, we all need to take on the burden and make the necessary economic adjustments,” the women’s groups wrote. “That being said, there’s no place for taking steps that might worsen economic inequality and hurt the status of women in general and in the employment market in general. We’re asking the Committee on the Status of Women and Gender Equality to demand that the Finance Ministry remove the clauses from the plan that were presented and to present as an alternative economic policy that will encourage growth engines, reduce gaps, protect the rights of women, and reflect social justice and equality in the economy and in society.”
The Committee on the Status of Women and Gender Equality did meet on Tuesday, but representatives from the Ministry of Social Equality were absent. Some present expressed frustration with the Ministry of Finance’s responses to questions that were raised.
“Your answers don’t satisfy me. You need to sit down and figure out how to avoid harming women,” acting committee chair Shelly Tal Meron told representatives from the Ministry of Finance. “I don’t understand why you won’t do this. In the remaining time it’s still possible to make changes to the Arrangements Law and to change the priorities. We demand that the Ministry of Finance perform a gender analysis of the Arrangements Law and to respond to each clause individually.”
This article was translated from Hebrew by Leah Schwartz.
