State auditor warns Israel is unprepared for aging population and welfare funding crisis

State Comptroller and Public Complaints Commissioner Matanyahu Engelman issued a severe report on Sunday saying Israel is not prepared for the aging of its population. The report says there is a major gap between government recognition of the issue and actual action, because the relevant agencies still have not built a coordinated, long-term, multi-year national plan to address the needs of older adults. Engelman called this a moral and value-based obligation.

One of the most alarming findings concerns the financial stability of the National Insurance Institute. According to the report, the 2018 long-term care reform pushed annual nursing-care spending from 7 billion shekels before the reform to about 21 billion shekels in 2025. That surge brought forward the expected depletion of the National Insurance Institute fund by more than six years, and it is now projected to run out in 2035. In that year, the institute will face a cash-flow deficit and will be unable to meet all of its legal obligations without additional financing.

Engelman said that despite the seriousness of the situation, the social-economic cabinet has not held a discussion in recent years on the National Insurance Institute’s balance and long-term stability. The report also says the institute does not carry out annual checks in the homes of all recipients of cash nursing benefits, and no oversight procedure has been set for nursing-care companies to verify the eligibility of family members employed as caregivers.

The report also points to broader state failings in preparing people for retirement, including the absence of an orderly government policy, a low rate of older adults working after retirement age, and health system weaknesses such as a shortage of geriatric doctors and hospital beds, along with poor promotion of preventive medicine for the elderly.