Aging with Dignity: The Initiative to Increase the Senior Citizen Allowance
It is time to increase the senior citizen allowance and link it to the national average wage, ensuring that every elderly citizen can live with dignity according to their needs.
The current situation of senior citizens is not a matter of fate but the result of policies that can be changed. Today, low allowances mean that retirees' livelihoods depend heavily on wages and pension work, unlike in most developed countries, where the majority of income in old age comes from government allowances. As a result, poverty and inequality rates are higher in Israel compared to similar countries in terms of income and development.
The Impact on Elderly Citizens
Israel is now a wealthy and developed country, largely thanks to the people who worked for decades to build the economy and infrastructure that serve as the foundation for today's prosperity. After many years of hard work and contributions to the economy and society, one would expect the State of Israel to repay its most fundamental debt to these men and women: to allow them to retire from the workforce and live full and enriched lives, just like any other citizen.
Unfortunately, this is not the case. Hundreds of thousands of elderly citizens live in financial distress and struggle to cover their basic living expenses. Poverty in old age, experienced by one in eight elderly citizens, is just the tip of the iceberg. Many live just above the poverty line but still face difficult choices between essentials such as food or dental care, or forgoing heating on cold days to be able to pay rent. Beyond the daily hardships, they constantly live under the shadow of anxiety about an unexpected expense they cannot afford.
Approximately a quarter of the elderly manage to cope by continuing to work beyond retirement age. However, this solution is feasible only for a minority who are physically capable and fortunate enough to find employment in a job market where age discrimination is prevalent. Even for those lucky enough to secure a job that allows for a reasonable standard of living, the question remains: For how long? Will they never be able to retire without sacrificing their dignity and livelihood in the time they have left?
The Current State of the Senior Citizen Allowance
Today, the vast majority of elderly citizens in Israel receive a very low senior citizen allowance, amounting to just over 2,000 ILS per month. Additionally, there is a complex and inaccessible bureaucracy involved in applying for income supplements. For those with low or no additional income from pensions or work, the state offers an income supplement that brings the total support, including the basic allowance, to around 4,000 ILS per month, along with additional benefits, primarily in housing and healthcare.
However, this supplement is subject to complicated and intrusive eligibility tests that not only examine the applicant’s income but also their assets and even the value of the car they drive. Understandably, income supplements are not viewed as a basic right but rather as a welfare mechanism intended for the poor and destitute. Many elderly individuals refuse to undergo the humiliating process of applying or lose their eligibility due to the complex tests and requirements.
Summary of our proposal
Given the difficult economic situation faced by many elderly citizens, we propose a new, tailored model that will ensure a dignified and sufficient income for every senior citizen.
The new model we are urging the government to adopt includes the following components:
- The state will guarantee a minimum monthly income of 5,860 ILS for every person at retirement age (63 for women, 67 for men).
- The proposed senior citizen allowance of 5,860 ILS per month for an individual is equivalent to the net income of someone earning the minimum wage.
- This amount will be linked to the national average wage, unlike the current situation where the allowance is tied to the consumer price index, causing it to erode over time. Individuals with significant additional income beyond the senior citizen allowance will receive a partial allowance.
- Our proposal ensures that no one will receive a lower allowance than they are currently entitled to, including future retirees.
- The new model will simplify the process, eliminate the need for income supplement benefits, and maintain transparency and social justice.
- The additional annual cost to the state is estimated at approximately 2.2 billion ILS, a necessary investment to ensure the welfare of Israel’s elderly citizens.
- We will demand the immediate implementation of the program in light of the difficult conditions many elderly citizens are currently facing.
Our new approach
To fundamentally change the current situation, we propose a different system. Our recommendation is to raise the senior citizen allowance to 5,860 ILS per individual and link it to the national average wage.
Those with significant income from other sources would receive a reduced allowance, but unlike the current system, the default would be the higher amount. The responsibility would shift to the state to assess and determine the appropriate level of allowance, rather than waiting for individuals to submit requests and claims. Ideally, we would prefer to raise allowances universally, but this is not economically or politically feasible due to the high costs involved.
In addition, we propose increasing rent assistance for those without property ownership, and providing full coverage for preventive, restorative, and rehabilitative dental care under the national health system for individuals aged 67 and above (through the health funds). This addresses one of the most significant financial burdens faced by elderly citizens.
We believe that this package of measures would lead to a significant improvement in the standard of living for elderly citizens, particularly for those with low income. Our proposal is based on extensive research, which included interviews with researchers and experts, analysis of statistical data from various sources, a review of relevant policy initiatives and changes in Israel in recent years, international research comparing Israel to other developed countries, and in-depth interviews with elderly individuals themselves.