You can’t say that Finance Minister Avigdor Liberman’s move to end daycare subsidies for yeshiva students was unexpected or that he didn’t give fair warning. His position on reducing government expenditures on subsidies and other benefits for the ultra-Orthodox was one of the main reasons Liberman didn’t join the right-wing coalition that former Prime Minister Benjamin Netanyahu offered him with the ultra-Orthodox parties during the two years of political crisis in Israel, even though on foreign policy he is on the extreme right of the map.
Throughout the last election, Liberman insisted that the ultra-Orthodox must enter the workforce, military or national service, putting the issue at the center of his economic platform. He was the one who blocked any possibility of the ultra-Orthodox joining the current coalition.
His first decision as finance minister concerning the ultra-Orthodox was to cancel the daycare subsidy for the children of full-time yeshiva students. In 2019, a third of Israel's budget for daycare subsidies — nearly 400 million new Israeli shekels ($122 million) a year, out of a budget of 1.2 billion shekels ($365 million) — went to ultra-Orthodox families where the father studies at a yeshiva for married men, while these families make up less than 10% of the population. Most yeshiva student families receive the full subsidy of 1,300 shekels ($396) to bring down the 2,000-shekel ($610) price of daycare per month.
The subsidy for daycare is conditioned on both parents working — except when one parent is a university student, training for a profession or a yeshiva student. Liberman argues that university students and those in professional training need the subsidies for a limited period and their studies benefit the economy, whereas yeshiva students enjoy this status indefinitely and their lack of employment and training damage the economy.
In 2013 the Netanyahu-Lapid government made some change to the subsidy policy, but the 2015 government reversed them.
Liberman’s move, apparently the first of many, sparked a backlash from ultra-Orthodox parties and the Likud. Knesset member Moshe Gafni of the ultra-Orthodox Yahadut HaTorah said, “The criterion that the wicked Lieberman set will deny a working woman whose husband studies Torah the subsidy for a child in daycare and will have serious economic impact on such families.”
The Shas Party said the move will force thousands of ultra-Orthodox women out of the workforce, arguing, “The Bennet-Liberman government will starve the children of Israel.”
Leftist parties including Meretz and the Joint List also expressed opposition.
Liberman tweeted in response, “‘There’s things to work out.’ Children should be given ‘what they need’ — education and the ability to join the workforce, to make a living in dignity and not to depend on welfare and charity. To my friends from the ultra-Orthodox sector, I call on you to go back to the sources and to the words of the Sephardic philosopher Maimonides, who said, ‘Whoever studies Torah and does not work and makes a living off charity has desecrated the name of God and humiliated the Torah and extinguished the light of religion, brought evil onto himself and took his life from the next world.’”
The unemployment of ultra-Orthodox men, only half of which work, is a heavy burden on the Israeli economy. But the situation is complicated and Liberman’s move raises the real danger of thousands of ultra-Orthodox families sinking into poverty.
Eitan Regev, vice president of research at the Haredi Institute for Public Affairs, says that the ultra-Orthodox model of livelihood shows that in a married couple’s first years the mother is the main breadwinner and the father mostly studies at yeshiva, and the family lives at a subsistence level.
But, according to Regev, in recent years sources have dwindled for the families, for reasons like reduced donations and the coronavirus crisis. Because of a strong ideology of Torah study, many men haven’t left the yeshiva and entered the workforce. This move would reduce them to poverty, said Regev, and would take food off the plates of these families who already live on the edge and lack any financial reserves. He said, “The rationale is clear but if you do this, you need to build in an adjustment period in order to prevent a swift deterioration into deep poverty.”
Motti Feldstein directs the Kemach Foundation, which works for ultra-Orthodox professional advancement. He said the decision will have the opposite result from the intended — ultra-Orthodox women will leave their jobs — since they will be forced to withdraw their children from daycare and stay home to take care of them.
However, Regev and other researchers of ultra-Orthodox society point out that experience has shown that past such steps have led to an immediate increase in the employment of ultra-Orthodox men.
The research of Nitsa Kasir of the Haredi Institute for Public Affairs shows that ultra-Orthodox households, more than other households in Israel, depend on government assistance. But in 2002, when as finance minister Netanyahu reduced child credit payments, employment rates among the ultra-Orthodox rose quickly.
The step makes economic sense and is meant to help solve a real problem, but may not effect the real change that’s needed, certainly if not accompanied by measures like professional training. Without an adjustment period, it promises to throw thousands of families into poverty. Politically, it will deepen the rift between the current coalition and the ultra-Orthodox parties and makes it far less likely that they will join the government.