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Likud and National Union agreed on Friday to a step religious parties have long sought, to include in the annual budget framework funds currently allocated to yeshivas on an ad hoc basis. Now only NIS 164 million of the NIS 770 million spent on yeshivas is included in the Budget Law and the remainder has been added during the year from budgetary reserves based on political pressure and deals.

In addition, the religious parties have demanded a 30% to 50% increase in support for yeshiva students over 18. The parties have said this is an inviolable condition for joining the coalition.

The monthly payment to a married full-time yeshiva student would rise to NIS 1,073 from the current NIS 600, and for an unmarried student to NIS 600 from NIS 400.

The various coalition agreements with the religious and ultra-Orthodox parties will include increasing child allowances, Finance Ministry officials predict. Their estimate on the cost of increasing allowances is NIS 1 billion, for a 20% rise, though the actual amount has yet to be agreed on.

In 2008, the total cost of all child allowances was NIS 5 billion, and it seems unlikely that the parties will be satisfied with only a 20% increase, said the officials. But they added that there will be a need to cut at least NIS 3 billion to NIS 4 billion from this year's budget, and they are not sure if raising the allowances should be the first priority during an economic crisis.