Cheating the State of Benefits

When Ehud Olmert was still just the minister of Industry and Trade, he cut the ribbon, so to speak, on a new computerized service at the Employment Service offices in Tel Aviv. Olmert fed his data into the machine - a lawyer seeking work. And received the computerized answer that at the moment, there was none to be had.

The Employment Service was a little embarrassed at the negative reply to the minister, but that didn't abate their pride in their new service, a service designed to shorten lines at the bureaus by giving job-seekers an automated response. A person would simply go to the computer terminal at the branch, enter his identity number (teudat zehut), and receive a reply on the spot. If there was a potential position, the candidate would enter the branch to meet with one of the clerks. If not, he'd go home.

So the Employment Service's intentions were good. They wanted to shorten the wait on lines for people who would not receive unemployment benefits without visiting the branch.

But good intentions can't make up for the weakness of the system: chronically unemployed people never get to meet with a clerk, who would handle the case personally and try to find work. In practice, the Employment bureaus don't even put up a pretense in these cases: they merely serve as a conduit for benefits.

"We are the first time anybody has ever sat down with these people and looked them in the eyes," describes Arieh Sivan, who runs the Hadera branch of the Wisconsin project. In the last year he has looked 6,300 chronically unemployed people in the eyes, people who haven't worked for years, to try to find them a job anyway. Most of the people who looked into his eyes didn't like what they thought they saw, which was a treasury bureaucrat sent to steal their benefits after the Finance Ministry discovered that since 1985, Israel's population has grown by 50%, but the number of income-supplement recipients increased sixfold to 160,000. The treasury therefore ruled that stipends would be conditional on devoting 30 hours a month to the Wisconsin project, which aims to coach these people in order to return them to the workforce.

It isn't easy to look into the eyes of Arab women who have never worked outside the home, Russia women who were promised that in Israel, they could retire at 55, Ethiopians with broken Hebrew, or simply people 50 years old and more who want to work. But that is when Sivan has been doing for the last year, and he has found not a few important things in their eyes.

For instance, he discovered that 300 of them, or 5% of the population he handled, were disabled. The income supplement is inferior to the disability stipend, yet these 300 hadn't claimed disability benefits. Why? Because the procedures required to get disability benefits are long and require the approval of a medical panel. These people opted for the bird in the hand and settled for unemployment benefits. The Wisconsin officials helped these people realize their rights. But one has to wonder whether, based on the Hadera experience, whether among the 160,000 recipients of benefits in Israel, there aren't some 8,000 people with unrecognized disability.

Sivan discovered that he was missing 1,050 pairs of eyes. That is the number of recipients of benefits in the Hadera district that never showed up at the Wisconsin project, nor came to demand restitution when their rights were cut off because of there nonappearance. The only explanation for the disappearance of these 1,050 people, is that they have been secretly working while taking unemployment benefits, and were afraid of getting caught.

Counting four Wisconsin center projects, the number of no-shows mounts to 3,000, an eighth of the 24,000 participants in the project. Multiply that eighth by NIS 1,600 a month, and you reach an annual outlay of NIS 380 million, which is apparently roughly the amount the state is paying to cheats: people who accept benefits while working on the sly. That sum doesn't include lost tax revenues to the state.

In practice, the level of cheating the welfare system is apparently a lot higher. As soon as the Wisconsin project began operating, it placed 2,400 people, including a lot who joined the program, only to drop out within days, saying they'd found work. Sivan would like to take pride in finding jobs for all 2,400, but admits that it's weird that so many suddenly found work. The assumption has to be that the sudden job-finders were laundering their jobs with their uncles, brothers or neighbors, jobs they'd already been doing off the books.