Israeli Parties Receive Millions in State Funding but Face Challenges Repaying Election Debts

Ahead of upcoming elections, Israel’s political landscape sees many new parties entering the fray, raising questions about how parties are funded and how election debts are managed. Israeli parties receive millions of shekels from the state to finance their ongoing activities and election campaigns, but the system becomes complicated when parties fail to pass the electoral threshold or dissolve.

Funding in Israel is divided into two main types: ongoing monthly funding for parties represented in the Knesset and one-time election funding. The key unit in these calculations is the "funding unit," recently increased by 12% to 1,835,000 shekels. Monthly funding is calculated as 6% of one funding unit multiplied by the number of Knesset members a party holds, plus an additional 6% of one funding unit for the party itself. For example, a party with 30 seats receives about 3.41 million shekels monthly.

During elections, parties receive one-time funding based on their status. New parties get 1.4 funding units multiplied by the number of seats they win plus one, while incumbent parties receive funding based on the average size of their outgoing and incoming Knesset factions. New parties can receive advances before elections but must provide guarantees, which are deducted from post-election payments. If debts remain, they are deducted from monthly funding.

However, problems arise when parties no longer receive monthly funding, making debt recovery difficult. Currently, several active parties owe millions to the state, including Likud with over 12.6 million shekels, Yesh Atid with 4 million, and others like Israel Beytenu and Ra'am owing between 1.5 and 4.5 million shekels. These debts are deducted from their ongoing funding.

For parties that fail to pass the electoral threshold and cease activity, debts can remain unpaid, posing a challenge for the state. Examples include former parties led by Naftali Bennett, such as The Jewish Home and Yamina, with debts of 3.2 million and 8.9 million shekels respectively, as well as others like Derech Eretz and the Green Movement. Ultimately, debt repayment depends on the party’s status: active parties have debts deducted from funding, new parties risk losing their guarantees, and inactive parties may leave debts unresolved, potentially carrying them into future election cycles.