National Insurance fund heads toward a 10 billion shekel deficit this year

Israel’s National Insurance Institute is expected to end the year with a 10 billion shekel deficit, according to a Finance Ministry forecast obtained by Calcalist. Without a rescue plan, the deficit is projected to reach 23 billion shekels by 2030. The forecast says that by 2029 the gap will exceed the annual transfer the institute receives from the Treasury, which includes interest on its reserves and repayment of loans the state takes from the fund.

The institute had already fallen into deficit in recent years, ending 2024 with a 1 billion shekel shortfall and 2025 with 5 billion shekels, according to earlier reporting by Calcalist. The depletion of reserves is driven mainly by rising benefit spending, especially long-term care payments, which the State Comptroller said have tripled from 7 billion shekels in 2018 to 21 billion in 2025.

The comptroller also found that the reserve-exhaustion date moved forward by nine years, from 2044 to 2035, between 2020 and 2025, largely because of long-term care. Finance Ministry data show eligible long-term care recipients doubled from 180,400 in 2018 to 384,500 in 2025, while the annual cost rose to 21.1 billion shekels. The comptroller said the institute’s dependency assessments are unusually generous, by 1.7 care levels on average, compared with one health fund, a difference he valued at 9.5 billion shekels a year.

The article says other costs are also rising quickly, including disability benefits, child-disability allowances, and support for children on the autism spectrum. National Insurance researcher Prof. Michal Koreh of the University of Haifa argued that the erosion of reserves stems from government policy, not excess generosity by the institute, noting that the Treasury has resisted an actuarial balance mechanism and reduced employer insurance contributions and the interest paid on reserve funds. A cross-ministerial committee is due to present recommendations on long-term care in about a month, while Health Ministry teams are preparing proposals for graded rights for autistic children. The National Insurance Institute said blaming it for the deficit is absurd and warned against cutting benefits to vulnerable populations.