Haredi Cities Lead Israel in Claiming Working Income Tax Credit
A long-term Tax Authority study finds that about 30% of people eligible for Israel’s working income tax credit do not claim it, with the highest take-up rates in Haredi cities. The research, published by the Tax Authority’s Planning and Economics Division and based on eligibility years 2013 to 2023, says the national claim rate has stayed near 70% throughout the decade despite extensive outreach efforts.
The study, prepared by senior research and statistics official Natalia Mironichev, says prior experience is the strongest predictor of whether a person uses the benefit. Among those who received the grant once before, 77% claim it again, compared with just 42% of eligible people with no previous experience. Those who have received it three times or more claim it in more than 90% of cases. By contrast, people who were eligible before but did not apply tend not to do so later either, at a rate of 74%.
Grant size also matters. In 2023, take-up reached 84% among women and 76% among men when the payment exceeded 5,000 shekels, but only 43% and 39%, respectively, when it was below 500 shekels. Women have consistently claimed the benefit more than men, although the gap has narrowed over the decade, with women rising from 72.4% to 75.4% and men from 53.3% to 60.9%.
The sharpest differences were geographic and religious. In Haredi majority localities, Bnei Brak, Modi'in Illit and Elad, take-up ranged from 82% to 87%, with a much smaller gender gap. In non-Haredi Jewish localities, the rate was only 65% to 69%. Gaps once seen against Arab and Druze communities have disappeared entirely since 2018, and the Tax Authority says locality size and peripheral location have only minor effects. It concludes that non-claiming is not mainly caused by undeclared work, language barriers or incorrect contact details, but by a behavioral pattern that persists over time. New legislation effective in 2024 expands the credit, including benefits for toddlers up to age 3 and a 50% increase for men with children up to age 18, which the authority hopes will raise take-up in coming years.
