Yisrael Beiteinu Pension Plan Could Cost $520m Annually

Send in e-mailSend in e-mail
Send in e-mailSend in e-mail
Avigdor Lieberman arriving to a coalition negotiations meeting, May 19, 2016.
Avigdor Lieberman arriving to a coalition negotiations meeting, May 19, 2016.Credit: Emil Salman

The cost of bringing Avigdor Lieberman and his Yisrael Beiteinu Party into the coalition will probably be in the range of 1 billion to 2 billion shekels ($260 million to $520 million) annually to fund a pension program aimed at immigrants from the former Soviet Union, government sources said Wednesday.

Yisrael Beiteinu, which has taken up the issue in the name of its largely Russian-immigrant constituency, wants to ensure every Israeli reaching retirement age would be entitled to a minimum monthly income from the government. Moreover, it wants the plan to become law.

The plan would saddle the government with extra spending at a time when it is contending with what treasury planners say is a 15 billion-shekel hole in the 2017 budget, much of it due to the spending commitments Prime Minister Benjamin Netanyahu made to coalition partners when he formed his coalition last year.

Under the Yisrael Beiteinu plan, pensioners with no other income or allowances would be entitled to a monthly pension of no less than 70% of the minimum wage, or 110% in the case of a married couple, which would amount to extra money in the range of 550 to 1,320 shekels a month.

Thus, a single retiree with no other income from overseas would get 3,500 shekels a month, up from 2,950 today. A retiree with a pension of more than 2,650 shekels a month would be entitled to get 1,320 shekels to top up his income to 110% of the minimum wage.

Beyond that, pensioners would be able to supplement their income from part-time work without losing any of their pension benefits, under the plan.

The Yisrael Beiteinu plan would cover all Israelis, but it makes a special provision for people who immigrated after age 21 so long as they worked a minimum number of years in Israel.

Even before Lieberman reached a tentative agreement to join the government, Netanyahu had agreed earlier in the week to take up that matter of pensions for immigrants who arrived at a relatively advanced age and hadn’t accumulated retirement savings.

Before that a government committee headed by Absorption Minister Zeev Elkin, had been deliberating over the last several months possible solutions, including one proposed by former Yisrael Beiteinu MK Leon Litinetsky that would have encompassed 400,000 pensioners at an annual cost of 3 billion shekels.

Click the alert icon to follow topics: