Israel’s Finance Ministry is advancing a plan to abolish National Insurance and health tax discounts for students and yeshiva students, according to a Channel 12 report. If approved, their monthly payment would jump from 171 shekels to 266 shekels, matching the rate paid by people who do not work in Israel.
The move comes after outgoing State Comptroller Matanyahu Englman warned on Sunday that the National Insurance Institute could face financial collapse within less than a decade. He said spending on long-term care had surged from 7 billion shekels a year in 2018 to 21 billion shekels in 2025, and predicted the institute would enter cash-flow deficit by 2035 and be unable to pay all benefits required by law.
Finance Ministry officials acknowledge that ending the discounts for students and yeshiva students would not by itself prevent the projected collapse, but they estimate it would improve the institute’s balance by about 1 billion shekels a year. The ministry is also conducting a broad study to identify additional ways to deal with the crisis.
Earlier this year, the National Insurance Institute canceled a discount for yeshiva students who had not regularized their status with the military authorities, with the cut taking effect gradually during the first quarter of 2026. The new ministry plan would go further and make the cut permanent for all students and yeshiva students, arguing the subsidy is unjustified even beyond the enlistment issue. The ministry says the change is especially important because the ultra-Orthodox share of Israel’s population is expected to grow, making the discount increasingly costly. A study cited by the ministry, based on Central Bureau of Statistics data and published earlier this year by the Israel Democracy Institute, projected that the ultra-Orthodox population will rise from about 12% in 2020 to 20% in 2040.
