Finance Minister Abraham Hirchson announced Thursday that National Insurance stipends will not be frozen in 2007.

Hirschson's statement contradicts the 2007 State Budget and the new Economic Arrangements Law, both of which have passed the initial stage of legislation.

The stipends freeze did not receive majority support in the Knesset, and was opposed by coalition parties such as Labor, Shas, The Pensioners' Party, as well as opposition parties such as Likud, United Torah Judaism, and the National Religious Party.

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Some of the stipends are fixed to the Consumer Price Index, others are fixed to the average national wage.

In July 2006 the Finance Ministry estimated that freezing the stipends would save NIS 1.12 billion. However, in view of the negative economic indexes in the past two months and the forecast of infinitesimal inflation in 2006, this estimate was revised.

"The savings are much lower than our previous estimates," Hirchson said Wednesday. "I have said before that I would be happy to revoke the freeze if the indexes were low. I see no point in a freeze that will bring in NIS 150 million."

The Pensioners' Party noted that after the stipends freeze is revoked, the pensioners' National Insurance stipend will be increased to 17.5 percent of the average wage - an increase of 1.5 percent - in January 2007, and to 19 percent of the average wage in January 2008. At the end of the process the pensioners stipend will have increased by NIS 150 per month for a single pensioner, and NIS 250 for a retired couple.