New data collected by the National Insurance Institute revealed that about 20.3% of seniors – some 185,000 people – are officially poor and live off of a stipends and income supplements alone.
The findings, released on Friday, said that Israel ranks 24 among OECD members, which it joined 2010. Israel falls three places below the OECD's average. The OECD has a poverty rate of 15.14% among seniors citizens.
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The survey, conducted by NII's Deputy Director of Planning and Research Directorate Dr. Daniel Gottlieb and Economy Department Head Miri Andeblad, shows an improvement compared to Israel's ranking in 1997, which was 50 out of the 50 countries examined.
Israel is therefore showing a positive trend over the past 15 years: From a 26.8% poverty rate among seniors in 1997, to 22.2% in 2005 and 20.3% in 2012. "But we still have a long way to go," Gottlieb stressed.
"On the one hand, we must increase and improve the stipends in order to reach the OECD average; and on the other hand Israel's main problem is the large immigrant population: They immigrated to Israel late, didn't save enough or at all, weren't encouraged to save by the government until lately by new pension laws; or they didn't have enough time to save for their pension."
(Illustration photo: Shutterstock)
"These people are at a high risk for poverty. These are the people who will soon become completely dependent on National Insurance. Therefore, we must prepare a new plan."
Gottlieb's findings were confirmed by other surveys. Similar findings were presented in the "Share Israel" conference held in October, according to which about 25% of Israelis over the age of 50 are officially poor and make less then half the median income for people their age.
The huge disparity between Israel and the first 10 places on the OECD rankings further emphasize the problem: Israel's poor percentage is 11 times higher than the Netherlands', which tops the list, and 7.6 times higher than the runner-up's, Luxemburg.
What does the future hold?
Dr. Igal Ben Shalom, the former director of the National Insurance Institute and current VP of the International Fellowship of Christians and Jews, headed by Rabbi Yechiel Eckstein, said that the solution is all about the "right proportions," and that Israel requires a "wide system overhaul," if seniors 20 years hence are to enjoy a proper pension.
"Until then we must combine three factors: The first – raising the stipends. This should happen gradually and according to budget considerations, but with a declared and active priority change, manifested in actions such as the tax benefits' abolition which will increase the budget by NIS 45 billion.
"The second factor – strengthening the State's welfare services. The third – increased activity by the third sector, but without exempting the State from its responsibility."
"These three factors, properly balanced, can give an adequate solution to the immigrant generation. The more we plan ahead the easier it will be, but we must put it on the agenda for the next 20 years."
The writer is a partner and the CEO of Acovado, which specializes in project management and counseling in databases' optimization and analysis