Latest Poverty Report Reveals 1.7 Million Israelis Live in Poverty

December 10, 2015

2 min read

Israel has more than 1.7 million poor people, of whom approximately 780,000 are children, according to the report on Poverty and Social Gaps in 2015, issued by the National Insurance Institute on Wednesday.

According to the report’s summary, 2014 marked a slight increase in the incidence of poverty over 2013. The rate of families living in poverty increased from 18.6% to 18.8%; the incidence of poverty also increased
slightly, from 21.8% to 22.0%; and the rate of children living in poverty increased from 30.8% to 31.0%.

In 2014, 444,900 families, or 1,709,300 people, including 776,500 children, were living in poverty.

The standard of living in terms of median disposable financial income per capita increased in real terms by 2.4%.

The incidence of poverty as measured by economic income from the labor and the capital markets also increased, from 28.5% in 2013 to 29.1% in 2014. In the same year, 35.5% of poor families were rescued from poverty following government and Social Security policy on direct taxes, pensions and payments transfer. The rate of children who escaped from poverty declined from 12.8% to 11.3% from 2013 to 2014. This decline is mostly attributed to cuts in child allowances.

The poor became poorer in 2014: compared with indices of poverty incidents which rose moderately, the indices of the depth and severity of poverty increased at higher rates. The poverty depth index rose by 6%, from 32.8% to 34.6%, and the poverty severity index, which affects the poorer population, increased by 10% of the general population.

This was the first survey in which Jewish respondents were asked directly what was their subjective definition of the degree of their religiosity. As a result, while it turned out that poverty rates among the ultra-Orthodox population are similar to past estimates — 54.3% of ultra-Orthodox families lived in poverty in 2014 — the size of the ultra-Orthodox population turned out to be much higher than previous estimates, reaching 9.6% of the population as a whole, compared with only 6.5% according to 2013 estimates. The proportion of the ultra-Orthodox among poor families reached 17.5% in 2014. It should be noted that ultra-Orthodox poverty increased slightly despite a sharp increase in their participation in the labor market.

Poverty rates among Arab families rose from 51.7% in 2013 to 52.6% in 2014. The poverty depth and severity of poverty in this population increased by 8% and 7% respectively.

The rate of poverty of elderly families increased by one percentage point in 2014, from 22.1% to 23.1%. This was due to a decline of income from work in this population.

The cut in child allowances, which started in August 2013 and continued into 2014, reached its full expression in the new poverty survey. The incidence of poverty among families with children has risen slightly, from 23.0% in 2013 to 23.3% in 2014. However, the incidence of poverty among single-parent families who are also affected by child allowances decreased from 27.5% in 2013 to 25.1% in 2014.

The incidence of poverty among working households rose at a higher rate to reach 13.1%, compared with 12.5% in 2013, in spite of the new “negative income tax” payments to low-income working families. The survey results show a drop in families with two earners.

The survey expects last April’s national wage increase of about 8%, to 4,650 shekel a month ($1,200), up from 4,300 shekel ($1,110), to affect the direction of reducing poverty among the working population, more than a quarter of which earns the minimum wage.

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