Increasing child allowances as the Shas party demands would cost NIS 1 billion a year, according to National Insurance Institute calculations. Meanwhile, Shas yesterday clarified that unless Prime Minister Ehud Olmert accepts its demand, it will vote today with the opposition in favor of dispersing the Knesset.

The issue of child allowances is a matter of ideology for the party, say Shas sources, and it will accept no alternatives. Child allowance payments are revised at the start of each fiscal year, based on change in the consumer price index. In 2007 families got NIS 147 per child, rising to NIS 152 in 2008. Shas demands NIS 35 more per child.

In the year 2007 the NII paid NIS 46.1 million in child allowances and it expects its outlay this year to be NIS 48.3 million. Olmert did not meet with Shas leader Eli Yishai about the allowances yesterday: he was busy meeting with French President Nicolas Sarkozy and Egyptian President Hosni Mubarak.