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Child allowances for the second to fourth children in a family will rise in a number of stages. As part of the coalition negotiations, Prime Minister-designate Benjamin Netanyahu has agreed with the ultra-Orthodox parties, Shas and United Torah Judaism, to an increase of NIS 1.5 billion over a three-year period.

In the first stage, to start July, monthly allowances will rise by NIS 105, NIS 66 and NIS 40 for the fourth child, third and second child in a family, respectively. This stage will cost an additional NIS 500 million.

In 2011 these allowance will be increased again, costing another NIS 1 billion. The exact timing is still under negotiation.

Other budgetary agreements with the ultra-Orthodox parties include a few hundred million shekels more for the parties' educational institutions as well as increased stipends for yeshiva students.

The agreement to raise the child allowances is a clear victory for Shas chairman Eli Yishai and UTJ chairman Yaakov Litzman, both of whom declared they would not join the coalition if child allowances were not increased.

They were particularly interested in raising the allowances for the third and fourth children, so as to increase the amounts given to large families. The increase for the second child was more a victory for the head of Yisrael Beiteinu, Avigdor Lieberman, who sought more money for immigrant families, which tend to have fewer children.

In addition, the ultra-Orthodox are still negotiating with Netanyahu over NIS 180 million more for their institutions.