The Knesset Finance Committee has approved the daycare bill, which is being promoted by the haredi parties and will now move on to its first reading in the Knesset plenum. This despite strenuous opposition from the Ministry of Finance budget division and a range of objections from the Attorney General, two of whose opinions were placed on the committee's table this week.

The bill, officially titled "Admitting a child to daycare and the state's participation in the cost of tuition," seeks to base eligibility for the subsidy solely on the mother's employment, and is intended to circumvent the High Court of Justice ruling that denied the benefit, worth up to NIS 2,200 per month, from families of draftees who do not report for military service. The private bill was submitted by MKs from United Torah Judaism, with support from MKs of all the coalition factions.

Currently, eligibility for the subsidy is conditional on both spouses working or studying. According to the proposal, only the mother's situation will be examined, so that families in which the father does not work or study will be able to receive the discount. The opinion of the budget division, signed by the division's employment coordinator, Neta Bar-Ziv, states that the proposal "Clearly undermines two of the main economic challenges of the Israeli economy" - integration of haredi men into the job market and their integration into military service and it "Contradicts the basic economic rationale" of the subsidy as a whole, which is to encourage the employment of both parents.

Negative balance of about NIS 25 billion per year

The budget division notes, "When the father does not work, there is no barrier to the mother's integration into the job market," and therefore omitting his status "is not consistent with the basic rationale of the purpose of the benefit." The budget division also warns that the bill will harm IDF recruitment efforts and said, "The immediate, certain effect expected from passing the bill is an increase in income of tens of thousands of shekels per year for the households of those liable to enlist," - "explicitly contradicting the principle of economic incentives."

The budgetary cost of the benefit is estimated by the Ministry of Finance at about NIS 300 million. The paper estimates that the employment rate of haredi men is only about 53% and without significant improvement over the last decade, and this situation creates an increasing fiscal burden.

The appendix to the opinion states that on average, "A haredi household creates a deficit effect in the state budget of about NIS 10.500 per month, which is financed by a surplus from non-haredi households." At the level of the entire economy, the Ministry of Finance estimates the negative balance from populations with a low labor market participation rate at about NIS 25 billion per year - an amount that will swell, due to demographic trends, to about NIS 140 billion per year in the future.

The legal opinion, which is written as a series of questions for discussion, focuses mainly on concerns about harming equality. Currently, a family in which both parents work is given priority in admission to daycare - a limited resource where demand exceeds supply - over a family in which only the mother works. If the bill is approved, the legal opinion notes, the working family will lose this priority. In addition, it points out a distortion in the wording: since the father's income will still be counted in calculating per capita income, a family in which the father works may actually receive a lower subsidy level than a similar family in which the father does not work at all.

Published by Globes, Israel business news - en.globes.co.il - on June 9, 2026.

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