(Archive photo)
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Single parents' tax burden to be lessened
Knesset's Welfare Committee has approved a bill intended to facilitate single parents' return to the workforce; Minister Haim Katz lauds the bill's approval.
The Knesset's Labor, Welfare and Health Committee approved on Monday the second and third reading of Welfare Minister Haim Katz's (Likud) bill to lower the tax burden on single parents and facilitate their joining the workforce.
The committee approved that the offset percentage for anyone receiving income support or child maintenance assistance from the National Insurance Institute of Israel (NII) will be reduced from 60% to 25%, which will lead to an increase in net income for those affected. This is an initiative from the NII that Katz has championed, its goal being to increase the earning rate of single-parent families.
(Archive photo: AP)
How does it work? Of a single parent's salary up to NIS 3,200, 25% will be deducted, as opposed to 60% today. In addition, unlike the first version of the bill, single parents receiving income support and child maintenance from the NII right to a work grant will not be automatically cancelled. However, the addition that they receive will be deducted from the grant.
The minister said, "We have successfully created a precedent and led the first step to encourage engaging in the employment cycle by thousands of single parents. Following the reform, the tax burden will dramatically reduce, and families will be able to earn hundreds of shekels more per month."
Today, according to date from the Welfare Ministry and the NII, more than 20,000 single-parent families receiving income support or child maintenance do not work at all. At the current deduction rate (60%), those applying for income support and maintenance are limited to low incomes and any income higher than the set amounts leads to revocation of income support. For this reason, there is a negative incentive to increase the rate of employment.
