A new State Comptroller report on population aging says successive Netanyahu governments failed to prepare Israel for an older society, leaving no multi-year plan, no coordinating body, and no clear division of responsibility between ministries. The report argues that the National Insurance Institute's long-term care system was expanded without budgetary or actuarial discipline, driving a sharp rise in costs and advancing the institute's insolvency date by more than six years.
According to the report, annual long-term care spending jumped from 7 billion shekels in 2018 to 21 billion in 2025. The number of eligible elderly people rose from about 180,000 to 392,000, while the share of retirement-age Israelis receiving the benefit doubled from 16% to 30%, far above the OECD average of 12%. If policy does not change, the comptroller forecasts that by 2030 around 34% of older people will qualify, and spending could reach 40 billion shekels a year.
The biggest accelerants were the 2018 reform in long-term care benefits, which created new care levels, increased payments for the most dependent recipients, and allowed cash instead of services. The Finance Ministry had estimated the reform would cost 1.3 billion shekels a year, but the actual added cost was about 14 billion, or 11 times more. The comptroller says 70% of the looming actuarial damage comes from long-term care benefits. He also notes that the National Insurance Institute is the only OECD country that continued evaluating dependency through documents rather than in-person assessments after the pandemic, and found its evaluations were 1.7 care levels more generous than those of a health fund, a gap he valued at 9.5 billion shekels a year.
The report also criticizes the political and administrative vacuum at the institute itself, which has lacked a permanent director general for three and a half years because Shas has insisted on politically appointed candidates. The comptroller says the government has still not discussed the actuarial crisis or prepared steps to delay insolvency, warning that the institution's financial strength has been damaged and future cuts or higher payroll taxes may be needed.
A joint team from the Finance Ministry, National Insurance, and other bodies is expected to submit proposals in about a month to restrain long-term care costs, including changes to dependency testing and cash payments. The comptroller says the next government must produce a long-term aging strategy, appoint a permanent director general, curb out-of-control benefits, make the temporary 5 billion shekel national insurance tax increase permanent for the institute, raise women's retirement age, link retirement age to life expectancy, and increase employer contributions, which are only about 30% of the OECD average. National Insurance responded that long-term care benefits are reserved for those most in need and that the institute must serve contributors who paid all their lives.
