Only from 2024: how much money are the tax breaks for parents worth? - Walla! Of money

2023-03-19T13:32:20.083Z

From 2024, parents of children aged 6-17 will be entitled to an additional credit point in the income tax. How much is the benefit worth, who will benefit from it and why are there already those who are quick to call it: "benefit on the ice"?

Don't cry child, mom and dad will only receive income tax relief in 2024 - and that's not certain either (Photo: ShutterStock)

Existence of the election promise to fight the cost of living, or perhaps the opposite: a creative way to inform the public that yet another election promise of the coalition partnership, on the eve of the elections, will never be realized?

Depends on who you ask.

At its weekly meeting, the Israeli government approved the bill of Finance Minister Bezalel Smotrich to grant an additional tax credit to parents of children aged 6 to 17 and to compare the labor allowance of working fathers to that of working mothers.

The bill will now be submitted to the Knesset for approval, and will enter into force at the beginning of 2024, subject to the Knesset's approval and the approval of the state budget for the years 2023 and 2024.

Ostensibly this is good news for every parent, but there are several landmines - especially one big landmine that lies in the date the benefit begins.

First, for the details: in accordance with the bill approved today, from 2024 onwards, one additional credit point will be given to men and women for each child who is at least 6 years old and has not yet turned 18 during the tax year.

The meaning of the proposal is that men will be entitled to 1 tax credit point and women will be entitled to 2 tax credit points for each child in the said age range.

The value of a tax credit point in 2023 is 2,820 shekels per year and the meaning of each point is a reduction of 235 shekels from the monthly tax liability of those who are entitled to it.

Today, a woman is entitled to one tax credit point for each child in the aforementioned age range.

In addition, in 2022 fathers and mothers were entitled to one additional tax credit point for each child between the ages of 6 and 12, and a bill extending the validity of this benefit until the end of 2023 is in advanced legislative procedures and will be submitted tomorrow for the approval of the Knesset's Finance Committee.

Children on their way to school.

A significant benefit for families with many children, but only on the condition that it is actually implemented (Photo: ShutterStock)

In practice, the implementation of the two bills (the one approved by the government today and the one that will be submitted for approval by the Finance Committee tomorrow) will lead to a situation where parents of children between the ages of 6 and 12 will receive one additional credit point consecutively from the beginning of 2022 onwards, and at the beginning of 2024 the age range that qualifies for an additional tax credit point will be extended for the age range of 13 to 17 years.

A parent in a single-parent family who is responsible for the children, who is currently entitled to one tax credit point for each child in the aforementioned age range, will be entitled, following the implementation of the law, to 2 tax credit points and a parent in a single-parent family who is not responsible for the children, will be entitled to one tax credit point.

Following the implementation of the law, single parents will be entitled to 2 additional tax credit points.

In addition, the government approved the increase of the labor allowance for fathers.

Currently, working or self-employed mothers are entitled to a work grant that is 50% greater than the work grant given to working or self-employed fathers.

According to the approved proposal, the work grant for fathers will be compared to that of mothers from 2023 onwards.

Applications for a work grant for 2023 will be submitted starting in 2024.

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Finance Minister Bezalel Shmotrich.

Rushed to bless, but will he also be the one who will exist? (Photo: Roni Knafo)

Breach of election promise, but in a gift box

Finance Minister Bezalel Smotrich,

who was absent from the cabinet meeting due to a trip to Paris, hastened to congratulate the decision and said: "As we promised, we are struggling with the cost of living. Expanding the eligibility points for parents of children up to the age of 17 will provide hundreds of shekels to the families of working parents. All Israeli citizens face the cost of living And the Ministry of Finance, headed by me, is taking many steps to fight and make it easier for the citizens of Israel.

We brought a responsible state budget that will maintain the strength of Israel's economy and we brought measures that will make it easier for families and increase the disposable income of the citizens. We will continue to work for you and for the State of Israel."

However, beyond the fact that the benefit is more significant as the number of children in the family increases, while the Minister of Finance is congratulating, there are those who were quick to point out the fact that the decision, which was initially supposed to be implemented this year, will only be implemented from next year, that is, 2024.

"Apparently this is indeed good news, especially for families with many children," said the same source.

In fact, we have already learned that all the election promises that cannot be kept were removed from the 2023 budget and transferred to the 2024 budget. Why?

Because on the one hand it allows them to say that the promise is fulfilled.

On the other hand, the discussions on the 2023 budget have not yet ended, much less the question of the 2024 budget has not yet begun.

So there is a government decision and maybe they will be enough to approve it in the Knesset.

Big deal.

After all, this government is teaching us that some decisions of previous governments and previous parliaments are not really binding on new governments."

So, a bit like free education for ages 0-3, this is a softened way of presenting to the public the fact that the election promise was broken, because until the next budget, even One does not know what government will be here, if any."