Israel’s Social Security Fund Warned to Face Insolvency by 2035

A commentary on a new State Comptroller warning says Israel’s National Insurance Institute could run out of money by 2035, and argues that the issue, though unglamorous, is central to every citizen’s future. The writer compares the looming problem to an old Ephraim Kishon piece about water shortages, and says the warning was buried behind coverage of Lebanon, Iran, and elections.

The article says the country keeps creating more and more welfare recipients while the bill is ultimately paid by taxpayers, especially working Israelis who already fund the system and may later rely on it themselves. It criticizes the National Insurance Institute for harsh treatment of claimants, including disability hearings and private investigators, but says those abuses are only part of a larger picture of organized fraud and political use of benefits.

The piece argues that the government also channels money to groups that do not contribute to defense or the economy, including illegal outposts and organizations opposed to IDF service. It praises Benjamin Netanyahu’s earlier tenure as finance minister, especially his child benefit cuts, and says that as prime minister he reversed much of that approach by entrenching draft exemptions and expanding dependence on state support.

The writer warns that if the fund collapses, the government will have to cover the gap through higher taxes, new targeted levies, or even by reaching into private savings such as deposits, training funds, and provident funds. It cites the recent VAT increase from 17% to 18% and mentions a possible special tax on electric cars as examples of the kind of measures already being considered. The advice is to diversify savings and move some assets abroad, because if corruption and benefit spending continue, a day could come when “the National Insurance Institute collapsed and the state ceased to exist.”