The report said the total number of poor people in Israel stood at 1.58 million – or 24 percent of the total population. Overall, Israel is home to 403,000 poor families – 20.5 percent of the population.
The figures show that since 1998, the number of poor children has risen by around 50 percent, while the number of poor families in terms of income has remained stable.
The report, which refers to the period extending from mid-2004 to mid-2005, points to a trend of increased poverty and a widening of social gaps in terms of income. At the same time, increase in poverty appears to have slowed down compared to the situation in 2003 – 2004.
The year spanning from 2004 to 2005 saw the highest rate of poor families in Israel. The number of families whose income was below the poverty line rose from 20.3 percent to 20.5 percent.
The rise in the number of poor children was especially significant, going up from 33.2 percent in 2004 to 34.1 percent of Israeli children in 2005.
National Insurance Institute: Focus on children, elderly
Addressing the troubling statistics, the National Insurance Institute said a plan to intervene in the job market was needed, as well as reforms in budget programs and taxes.
The NII recommended updates to the government allowance scheme on an annual basis, in accordance with inflation rates and recent salary figures.
The NII said a focused effort must be undertaken to address problems related to children and the elderly. Since 2001, the social budget for children has been cut by some NIS 3.6 billion (approximately USD 800 million.) The National Insurance Institute warned that further cuts could increase the number of poor children.
Meanwhile, the Finance Ministry issues the following response to the report: "The government's economic policies in recent years have started showing results. The economy grew by 5.2 percent, around 170,000 Israelis have found employment, there has been a significant decrease in unemployment figures (to 8.9 percent), and wages went up. It's important to remember that the report is addressing the end of 2004 and the start of 2005, while the growth and the impact of changes led by government manifested itself in the second half of the year."