Israel’s Finance Ministry is advancing a plan to abolish reduced National Insurance and health tax payments for students and yeshiva students, in a move first reported on the evening program “Seven.” If approved, their monthly payment would rise from 171 shekels to 266 shekels, matching the rate paid by people who do not work in Israel.
The proposal comes after State Comptroller Matanyahu Englman warned on Sunday that the National Insurance Institute could face financial collapse within less than a decade. According to Englman, long-term care spending has surged from 7 billion shekels a year in 2018 to 21 billion shekels in 2025, a rise he says could push the institute into a cash-flow deficit by 2035 and prevent it from paying all benefits due under law.
Finance Ministry officials acknowledge that removing the discounts for students and yeshiva students would not by itself avert the predicted collapse, but they estimate it would improve the National Insurance Institute’s balance sheet by about 1 billion shekels a year. The ministry is also conducting a broader study to identify additional solutions to the crisis.
The measure would go further than a change already introduced by the National Insurance Institute earlier this year, when it ended the discount for yeshiva students who had not settled their status with the military authorities. That cut was phased in during the first quarter of 2026. The new plan would eliminate the subsidy permanently for all students and yeshiva students, which the ministry argues is unjustified even aside from the conscription issue.
The ministry says the change is also needed because of Israel’s demographic trends. A study by the Israel Democracy Institute, based on Central Bureau of Statistics data and published earlier this year, projected that the ultra-Orthodox share of Israel’s population will rise from about 12% in 2020 to 20% in 2040.
