Israel's Glaring Welfare Gap: Recipients in Wealthier Towns Receive Three Times as Much Money

New research indicates that the yawning gap between how much richer and poorer towns spend on welfare only serves to exacerbate social inequality

File photo: A home on the street, central Tel Aviv.
Moti Milrod

Welfare spending is three times as high for recipients in the wealthiest Israeli towns as it is in the poorest, according to research published Tuesday by the Taub Center for Social Policy Studies.

The study found that welfare recipients in the wealthiest towns – those with a socioeconomic ranking of 10 on a scale of 1 to 10 – receive an average of 13,000 shekels ($3,700) per year. In comparison, welfare recipients in towns with a socioeconomic rank of 2 receive just 3,400 shekels per year on average.

This gap exists not only because richer towns spend more of their own money on welfare, but also because the Social Affairs Ministry gives them more funding. The study found that the ministry allocates 2,600 shekels per welfare recipient in the poorest towns (ranks 1 to 3), 6,000 shekels per recipient in middle-class towns (ranks 4 to 9) and 8,000 shekels per recipient in the wealthiest towns.

The result, pointed out the study’s authors, Prof. John Gal, Shavit Madhala and Haim Bleikh, is that the people who need the most help are getting the least money. This “is likely to increase the social inequality that already exists between different population groups in Israeli society,” they wrote.

They urged the Social Affairs Ministry to change its funding policy to ensure that welfare recipients in poor communities get the same amount of money as those in wealthy towns.

The study cited three reasons for the unequal welfare distribution. The first is the matching grant system, under which towns must fund a quarter of all budgeted welfare services while the central government funds the rest (up to a certain limit). Consequently, towns that can afford to budget more of their own money for welfare will get more from the ministry.

And although the matching funds are capped, richer towns can and do spend more of their own money on welfare on top of the amount they are required to spend by the matching grants. The poorest towns spend slightly more than is required by the matching grant, but the wealthiest towns spend significantly more.

The third reason is that most welfare assistance in poor towns is provided within community frameworks, which cost less, whereas wealthier communities provide more treatment in residential institutions, which cost more. Institutional frameworks are especially uncommon in Arab communities. For instance, the study found, the Jewish town of Safed and the Druze town of Beit Jann have the same socioeconomic ranking, but the former spends more than twice as much per welfare recipient as the latter (9,140 shekels per year compared to 4,124), mainly due to the greater proportion of cases referred to institutional frameworks – 13 percent compared to just one percent.