Article by Dov Froman

[Comments are welcome at our Dialogue Corner]

Social Security or Robbery?

Questions on the National Insurance Institute of Israel

Israel's finance minister has decided that improving the economy requires a drastic reduction in the social security benefits, including old age allowances for retired citizens. Every resident of Israel aged 18 and over is obliged under law to be insured by the NII (National Insurance Institute of Israel) and to pay the National Insurance contributions. The compulsory insurance fees are deducted from all wages for many years, yet when the worker needs the allowance, the government changes the rules of the game.

How are the NII funds managed?

Only few know that the NII transfers every single month more than two billion Shekels to the government's treasury.

This money belongs to the insured citizens, including senior citizens, who have worked and paid their dues for many years. Collecting these enormous sums is intended to enrich the affluent few, instead of providing the needs of the public at large.

According to my calculation, had these sums been invested in regular bank accounts with normal business interest, each retired person would have received a monthly revenue of 9,000 Shekels (approximately US $2,000). Yet the current old age allowance can hardly provide an average person's basic needs. Why? Because the NII resources are not managed for the benefit of the insured citizens, who have worked and paid for many years. Instead, they are transferred to the government's treasury and from there, to the hands of the rich. Why are the NII resources not managed efficiently for the sake of the insured citizens?

Who is responsible for the poverty?

Recently, the public was shocked by the facts and figures, published in the annual "Poverty Report".

The National Insurance General Director blames the Ministry of Finance for the rapid spread of poverty in Israel. But what about the NII's responsibility?

The ministry of finance claims that its policy of reducing social security benefits will take people out of the cycle of unemployment and poverty and send them back to work.

But what does this have to do with the elderly? Why should old age allowances be cut down? Are the elderly also expected to return to work?

It is well known that in the current economic reality, people over 40 can hardly find permanent, full-time jobs. Are the employees to blame for this situation? Should the older citizens be punished? By what right does the treasury steal the old people's money from the National Insurance Institute?

Who is responsible for the robbery?

This theft is carried out by the government, the NII's board of directors, the NII's General Directors throughout the years, and the ministers of welfare.

According to clause 12 (1) of the law, the role of the NII's board of directors is to supervise the activities and management of the Institute. However, in its current form, the board cannot supervise the NII and has no interest in securing its funds. Under the current regulations, the board does not represent the insured citizens but is comprised of various politicians.

Why should the board include:

Representatives of the Ministry of Finance,

Representatives of the Ministry of Health,

Representatives of the Ministry of Welfare,

Representatives of the Ministry of Industry and Commerce,

Representatives of the Ministry of Communications,

Representatives of the Ministry of Immigration Absorption,

Representatives of the Jewish Agency,

Representatives of women's organisations,

Representatives of local authorities,

And six more experts?

What is the solution?

To function properly, the NII board of directors should include representatives of the NII beneficiaries, according to their various types and in proportion to the volume of their financial share.

The state is stealing the funds of its senior citizens under the law of the National Insurance Institute. Therefore, the board of directors should be replaced and the National Insurance should be taken away from the government's control. Our social security should become an independent corporation under the management of the people who contribute to it.

In the meantime, the ministry of finance continues to spread false propaganda about its economic policies. It is obvious that its real intention is to enrich the rich, at the expense of the money stolen from the taxpayers.

Dov Froman, 6/January/2005

Back To Current Editorial