ISRAEL''S NATIONAL
INSURANCE INSTITUTE And it''s social services Part 1 The National Insurance Institute of Israel (NII),
one of the pillars on which social policy in Israel rests, operates under the National
Insurance Law, passed by the Knesset (Israeli Parliament) in November 1953. The NII is the governmental agency in charge of implementing the National Insurance Law and other social-welfare statutes. The purpose of these laws is to reduce economic disparities and ensure social security for every individual and family at all time. Today the NI Law includes a wide variety of programs, such as old-age and survivors, maternity, children, work injury, general disability, long-term care, unemployment, bankruptcy and liquidation of corporations. In addition to the National Insurance Law, the National Insurance Institute is in charge of enforcing other laws and agreements in the field of social insurance, such as the Income Support Law, designed to protect every family from loss of income and to assist needy populations. In addition to the cash benefits paid by the National Insurance Institute to those eligible, the NII also subsidizes the development of welfare services in the community by means of the Division for Service Development, which consists of five separate Funds. All activities of the NII in the development of social services are anchored in the National Insurance Law. In its original phrasing, the law provided for only three types of insurance: old-age and survivors, maternity, and workers'' compensation. The largest category is old-age and survivors'' insurance, which pays a standard pension to men, aged 67 and women aged 64 the age at which the insured person is eligible for old-age pension, conditional on means test. The survivors'' benefit is paid to widows, widowers, and orphans. Maternity insurance provides working mothers on maternity leave with a maternity allowance, and every woman who gives birth with a maternity grant. Workers'' compensation covers persons who are temporarily or permanently unable to work because of occupational accidents or illnesses. The National Insurance system provides almost all forms of social insurance that are offered in developed countries and redistributes the national income according to social criteria. The developments described above have increased the scope of NII activity substantially. The share of NII benefits in GNP increased from 2.8% in 1970 to 7% in 1976-1977 and 8% in 1985. Old-age and survivors'' pensions account for 40% of total remittances. Another 20% is for child
allowances, 26% for income maintenance, and 10% for general disability. Policy Most of the income- maintenance policy dates from the 1970s, when a basic old-age pension was combined with a supplemental income-maintenance benefit, together assuring a basic standard of living. This policy guarantees subsistence to persons who become temporarily or permanently unable to earn a living. The question of universality (uniformity) versus selectivity in National Insurance payments was put to the test with respect to child allowances. One of the issues that the NII has to confront is how to preserve the real value of the allowances despite inflation. Most of the methods invoked, aim to preserve the real value of the allowances relative to the standard of living of the overall population. Indexation of the allowances to the national average wage is the principal tool used to achieve this goal. The allowances are adjusted at the beginning of each year and whenever wage-earners are given cost-of-living increases. Child allowances are linked to the Consumer Price Index; this preserves their purchasing power in the long term but does not allow them to increase at the same pace as the standard of living. To cope with the immigration wave of the early 1990s, the NII created a database that generates lists of all immigrants eligible for child allowances and old-age pensions. The NII strives to recognize allresidents with equal entitlement immediately upon their arrival in Israel. In response to public pressure, the terms of eligibility for unemployment compensation were toughened in order to encourage the unemployed to accept jobs. The main legislative amendments concern the definition of the term "suitable work." Despite budgetary constraints, the NII was able to introduce several important regulations in order to solve various socioeconomic and economic problems.