Child Allowance and Government Savings Plan
Kitzbat Yeladim VeChisachon Lekol Yeledקצבת ילדים וחיסכון לכל ילד
Understanding the government child allowance and savings plans.
Kitzbat Yeladim - קצבת ילדים - Child Allowance
The Bituach Leumi - ביטוח לאומי - National Insurance Institute pays a monthly child allowance to families living in Israel who have children up to age 18. It is meant to help with the cost of raising children and is paid regardless of the family’s income, normally on the 20th of each month.
Who is entitled to receive it?
A parent is generally entitled to child allowance if:
- They are an Israeli resident, or a non-resident who has been legally working in Israel for at least 6 months with a valid residence and work permit; and
- The child is under 18, lives in Israel, and is not married.
Allowance may also be paid to:
- A legal guardian, with a guardianship order, or in certain cases, another person caring for the child;
- A minor who has immigrated to Israel without parents, in specific situations.
Allowance amount
The amount of the allowance depends on various factors, including:
- The number of children in the family;
- Their birth order;
- Whether the family receives certain subsistence benefits, such as income support, maintenance, or old-age pension with supplement;
- Whether the family receives certain Bituach Leumi benefits. Families receiving income support, maintenance, old-age pension with supplement, or survivors’ pension with supplement may receive an additional increment for the 3rd and 4th child.
Please note: You can check the exact amount for your family using the official calculator in Hebrew.
How is it paid and to whom?
- In most cases, after a birth in Israel, the allowance is paid automatically based on data sent from the hospital to Bituach Leumi.
- Payment is usually made on the 20th of each month into the bank account recorded for the family.
- Child allowance is generally paid to the mother by default, but there are rules for payment to the father, guardian, or adoptive/foster parents on the Bituach Leumi site.
- Bituach Leumi is allowed to offset debts, such as unpaid contributions or overpaid benefits, from the child allowance.
Please note: If you need to leave Israel for a substantial period of time, you should review the relevant Bituach Leumi rules and regulations regarding the potential impact on your Kitzba.
When do you need to file a claim?
If you do not receive child allowance automatically, you may need to file a claim in the following circumstances:
- Children who did not receive an allowance automatically after birth;
- A change of custody between parents;
- A child moving to a guardian;
- Children who came to Israel at a later age.
Chisachon LeKol Yeled - חיסכון לכל ילד - Government Savings Plan for Children
Bituach Leumi also runs a government savings plan for every child who is entitled to child allowance. For each eligible child, Bituach Leumi opens a personal savings account managed either by a bank or a Kupat Gemel - קופת גמל - provident fund, according to the parents’ choice.
Overview
- Funds are deposited monthly, usually on the 20th of the month, on the same day as the Kitzbat Yeladim.
- Parents can also choose to double the amount deposited by adding funds from the Kitzbat Yeladim.
- For newborns, parents have 6 months from the birth to choose the bank or fund and the investment profile.
- If the parents do not choose, the money is invested by default in a provident fund with a higher-risk investment track, or, if a provident fund was already chosen for an older child, in that same fund.
- You can change the savings instrument and investment track later.
Please note: The actual deposit amounts can be checked on the official Bituach Leumi website.
Withdrawing funds
- Savings can generally be withdrawn from age 18, except in special cases.
- Withdrawals are handled by the bank or provident fund, not by Bituach Leumi.
- You must complete a Money Withdrawal Request form and submit it to the managing entity.
- From age 21, if the savings were not withdrawn earlier, Bituach Leumi adds an additional payment when the child turns 21.
- From age 21, the child may withdraw the money without parental approval.
- There may be tax on capital gains when withdrawing savings.
- If the child keeps the money in a provident fund until retirement age and then takes it as a pension, it may be tax-free under current rules.
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