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Welfare spending soared in Corona, but the day after the social gaps may widen

The epidemic period led to a 47% increase in the social security and welfare budget, and positive changes were also seen amid the widespread crisis.

However, experts fear that at the end of the approaching epidemic, there may be cuts that will exacerbate social disparities.

"The question of whether the government will have an interest in tackling inequality"

Tags

• Allowances

• Unemployment benefits

• unemployment

• Corona virus

Maya Horodnichano

Wednesday, 30 December 2020, 22:51

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The corona crisis led to a 47% increase in the budget for social security and welfare, and caused significant changes in the provision of benefits.

Now, the fear is from the day after the epidemic, which is already in sight, and from the widening of social gaps if aid and services are cut.

"I think we should be very concerned about the widening of social disparities, even if there is a fairly rapid growth of the market," says Prof. Johnny Gal of the Taub Institute and the Hebrew University.

He said, "This is a question of allocating resources. The question is whether there will be a government that will have an interest in tackling poverty and inequality and improving people's human capital."

He added that "this will require both a change in priorities and the collection of additional taxes, perhaps more progressive, or there will be a government that says - we let the market do the work, we will cut the budget to reduce the deficit and the market can create the conditions to improve living standards. "The market will definitely improve the standard of living of some people, but not all of them."

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"Some will have an even harder time after the crisis is over."

Queue at the Employment Bureau (Photo: Reuven Castro)

Gal added that "we should be concerned that some will not reintegrate into the labor market. Some people, especially those with very low incomes who have been particularly hurt and accumulated debts, may find it even more difficult once the crisis is over, if aid systems are cut. I fear that will happen. Then the damage will be greater. "

This, he says, after in recent years there has been a certain reduction in gaps.

After a relative stagnation of social spending, welfare spending increased from about NIS 124 billion in 2019 to NIS 183 billion this year following the corona crisis.

According to a report by the Taub Center published this morning (Wednesday), there has been a significant change in the distribution of expenses, so that the vast majority of budgets have been directed to securing a safety net for citizens at this time, and only a small portion for future employment development, for example through training and vocational education. Soft.

While the expenditure on "social protection" was about NIS 46 billion in planning and NIS 33 billion in implementation, the expenditure on social investment was about NIS 4.7 billion in terms of planning, when in practice until the end of October only NIS 1.5 billion was used.

"In the last year the gap has been very large and the question of what to do next - if you want to bring people back into the labor market, improve their status, ensure a reasonable income, it requires a very large investment in social investment," says Gal, who co-authored the report with Shavit Madhala.

Eligibility conditions for an income support pension are difficult.

Closed stall in the Carmel market (Photo: Reuven Castro)

Most of the defense network's expenses related to unemployment benefits, with the increase in the number of unemployed and the easing of conditions for receiving benefits.

Thus, among other things, the qualifying period has been shortened to six months instead of 12, and as a result of the changes, double benefits can be received, and even in cases where employees have been paid unpaid leave, they are entitled to unemployment benefits.

"Rising unemployment and the changes made to the unemployment insurance plan to provide a safety net for the victims of the crisis have led to a steep and unusual increase in the number of unemployment benefit recipients in Israel since the plan was first implemented in 1973," the report said.

According to Gal, some of the changes had to be made even earlier because the conditions for receiving unemployment benefits were stricter.

He believes that some of the changes should be preserved even after the crisis.

"There have been significant and correct changes in unemployment benefits, which it is a pity have not been done before and I hope that some of them will remain even after the crisis," he says.

Despite the significant change in unemployment benefits and the volume of recipients, it is precisely in the income support pension, which is supposed to ensure a minimum subsistence allowance for those who cannot find work or are unable to work, that there has been no change.

Eligibility conditions for a guaranteed pension are difficult and the amount of the pension is particularly low - a single person will receive between NIS 1,400 and 2,200 depending on age, and a couple with two children between NIS 2,949 and NIS 4,368 depending on age.

Although the number of income support recipients hardly changed during such a period, this is probably because many are still entitled to unemployment benefits.

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After the relief is over, Gal estimates that the number of income guarantee recipients is expected to increase, while this is an annuity that does not allow for basic subsistence.

"The situation of income support recipients is much more difficult because their benefit is low. Even those who received the minimum wage before being fired, then their unemployment benefits will be higher. In this sense, although correct changes were made in unemployment benefits, no changes were made in income support," he says. .

"It is likely that eventually, if not in June then after, they will limit the period of eligibility for unemployment benefits or make it difficult to access unemployment benefits, because they will be required to enter the labor market and prove that they are looking for work. "In guaranteeing income and conditions, they will continue to be those that do not allow for existence," he added.

"Thought should have been given to the fact that there are people who live at a very low level. Both before the corona and during the corona the income guarantee had to be corrected. For example, we corrected the disability benefits and unemployment benefits, and I think this benefit is more problematic. Recipients of income support are low. "

Welfare policy became central during the Corona.

Closed stores in Tel Aviv, October (Photo: Reuven Castro)

Welfare policy became central during the Corona, but according to Gal the question is whether the public and decision-makers will remember the important role of systems in the crisis, even as the number of unemployed has fallen.

"We learned in a crisis that on the one hand, without a welfare state in terms of health, education and welfare, we clearly could not think of how to get through this crisis. Anyone who wants to imagine it can travel to New York and feel the lack of good state frameworks in these areas." He says.

He said, "This is important because all these years there have been people who have said that we need to cut back on welfare and health and shift responsibility to the individual, and we need to privatize things. We need to think very carefully about what it means for a country where these systems fail, at least. "In the last year. What would we do if there were not so many social workers, or a social security system that is able to get organized pretty quickly to help and give unemployment benefits?"

Gal adds that "in this sense there is something that maybe it's good that everything is taken for granted. It was not created out of nothing and there were quite a few people and political forces who wanted to reduce this system. I am glad people feel it is taken for granted and it is their right to use systems. "To deal with referrals that will be down the road in the coming year or after they are reduced again and cut back on health or education and welfare, and again they will transfer the responsibility for financing the systems to citizens. I am afraid that will happen."

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