Israel’s proposed wartime budget would slash benefits for new immigrants

Many immigrants to Israel would no longer be eligible to receive the financial stipends that have been a staple for new arrivals to the country under the terms of its proposed wartime budget for next year.

The Israeli government is looking to slash the immigration benefit and make other cuts to public services while raising taxes to help pay for a war that has entered its second year with no resolution on the horizon. With troop deployments in Gaza and Lebanon, the war has required billions of shekels in extra military spending while also draining the economy of workers called up for army service.

For decades, new immigrants to Israel have received government financial assistance during their first year in Israel. But now, prospective immigrants would be required to declare their assets, and anyone worth more than 500,000 shekels (about $133,000) would not get the payments. For those under the threshold, a 10% increase in assistance is proposed.

The financial assistance, which can amount to more than $15,000 for newcomers arriving as a family, helps with living costs during the first few months after arrival. Other benefits for new immigrants include a temporary exemption from certain taxes, free language instruction, and health coverage.

While cuts to immigrant assistance have been proposed at different points in Israeli history, they have rarely if ever been carried out. The latest cuts have not yet been finalized: After being approved by the Israeli cabinet earlier this month, the budget package now faces a vote in parliament, which must take place by the end of March 2025.

For some, the possibility of cuts this time around represents a significant test of Israel’s commitment to encouraging Jewish immigration, known in Hebrew as aliyah, at a precarious time for world Jewry. Under Israeli law, anyone with at least one Jewish grandparent is entitled to citizenship, and Israeli authorities routinely cite the number of Jews choosing to move to Israel as evidence of the country’s strength.

“The proposed reductions in benefits for new immigrants raise serious concerns about the long-term implications for our nation,” Robert Singer, former CEO of the World Jewish Congress, in a Jerusalem Post article advocating against the cuts. “At a time when Israel’s economy requires growth, undermining the support system for new Israelis is not only shortsighted but detrimental to our collective future.”

Singer added, “The message the government sends with our budget decisions is crucial.”

At least some lawmakers are opposing the provision cutting the newcomer assistance.

Oded Forer, a member of Yisrael Beiteinu, an opposition party that historically caters to Russian-speaking Israelis, criticized the proposed cuts last month at a meeting of the parliament’s Committee for Immigration, Absorption and Diaspora Affairs, which he chairs. He warned that the cuts could discourage immigration when it is especially needed, according to the Israeli news outlet Ynet.

“We are at war right now and there are many immigrants who come here to enlist in the military,” Forer said. “The country needs every Jew who would choose to join it.”

Also opposed to cuts is the director general of the Immigration and Absorption Ministry, Avichai Kahana, who said Israel should be as welcoming as possible to Jews amid a global rise in antisemitism and a corresponding increase in demand for immigration to Israel.

“Jews around the world are experiencing antisemitism at levels not seen for decades, which is driving more people to apply for immigration,” Kahana said, according to Ynet. “Especially now, the financial assistance should be boosted.”

Since early in the war that started when Hamas attacked Israel on Oct. 7, 2023, killing some 1,200 Israelis, some Jews in the Diaspora have said they experienced an awakening that led them to want to move to Israel. They admire how Israelis responded to the crisis and hoped to show their support by becoming Israelis themselves. At the same time, some were also motivated to escape what they see as an increasingly hostile environment for Jews in many places around the world, in part because of protests against Israel as well as antisemitic incidents that proliferated in response to the war.

Alison Keehn, a 58-year-old American Jew who lives in Montana, is part of this post-Oct. 7 wave. She’s in the process of applying for aliyah, a decision spurred by a political climate she says has left her feeling unmoored, triggering thoughts about the persecutions of Jews throughout history.

“Being Jewish was always normal up until this moment,” Keehn said in an interview. “People like me have lived our whole lives believing that stuff was in the past. We were raised to believe that never again was never again, that no one isgoing to come and round us up. But now we don’t know. We don’t know what to think.”

The recent loss of both her parents amplified her desire to relocate to Israel. “The only family I have now is Judaism,” she said.

Keehn said she’s not sure yet whether she’d qualify for the aid under the new means test, but she’s committed to moving to Israel either way. Still, she said she was dismayed that Israel would cut immigration benefits in this atmosphere, especially if it were not also cutting elsewhere such as public funding for haredi Orthodox institutions, which is slated to rise.

“That would be ridiculous,” she said.

However, Keehn added, “I can absolutely see that it would be reasonable to put restrictions that you need to qualify for assistance,” she said. “Unfortunately, not everybody is honest and people think they’re owed something.”

The number of Americans who have opened applications for aliyah nearly doubled in the year after Hamas attacked Israel, according to Nefesh B’Nefesh, a nonprofit that assists prospective immigrants from the United States and Canada. Some 11,700 such applications have been opened since the attack.

In response to a press inquiry, a spokesperson for Nefesh B’Nefesh said it was premature for the group to comment on what effect the cuts might have because they have not been finalized.

A representative of Israel’s Finance Ministry, which is in charge of drafting the national budget, defended the proposal as a necessary measure given the growing budget deficit. The government set out to reduce the deficit by 40 billion shekels (roughly $10.6 billion) through spending cuts to most ministries and an increase of the country’s value-added tax from 17% to 18%.

The Finance Ministry representative, Tair Rabukhin, said the change to immigration benefits was designed to shield the most vulnerable from being affected. “We are trying to minimize the impact on disadvantaged populations while shifting the burden as much as possible to the more well-off ones,” Rabukhin said, according to Ynet.

Israel saw a huge spike an immigration immediately after Russia invaded Ukraine in February 2022 with an influx of immigrants from Eastern Europe. That wave declined significantly after Hamas’ attack: In the year before the attack, about 63,000 people made aliyah, according to Israeli government figures. In the year after, the total dropped by more than half to some 30,500 people.

Immigration from countries outside of Eastern Europe has been the slowest in at least a decade, government statistics show. But the past three months have seen an uptick, which perhaps means that the raft of people who filed their applications after last October’s attack are beginning to move to Israel in large numbers.