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The National Insurance Institute on Tuesday rejected Education Minister Yuli Tamir's proposal to make it responsible for school fee payments which parents currently pay directly to schools themselves.

Tamir proposed that the NII would implement and control a payment plan for monthly school fees based on parents' financial means and number of children, rather than paying schools a fixed rate.

The current system has drawn sharp public criticism in the past as it does not allow the Education Ministry to track around NIS 1.5 billion paid by parents per year. It also cannot prevent schools from overcharging or disadvantaging pupils whose parents cannot pay due to financial difficulties.

NII sources said such a change would require the implementation of an entirely new payments system and increased human resources, which would cost tens of millions of shekels. "We are not a payment pipeline for all of the government's purposes," the sources said.

After reading Tamir's proposal over the past three weeks, newly-appointed director Ester Dominisini rejected it, and the organization issued a statement saying school fees "could not and should not form part of the NII's responsibilities."

The Education Ministry accepted the NII's rejection of the proposal and issued a statement saying it would "regretfully" scrap the plan.