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Jul 27, 2015
Child Allowances might become Child Savings Plans
In the standoff between the Ministry of Finance and the haredi parties (specifically UTJ) regarding possible budget cuts despite coalition agreements, a new proposal has been made.
The Ministry has proposed, due to Litzman's refusal to budge on accepting cuts to child allowances that he worked so hard to achieve, that instead of giving child allowances, they would put aside money for each child, i.e. a savings plan for each kid, that would only be able to be opened and accessed when the child turns 18.
source: Calcalist
The only benefit to the Finance Ministry, it seems, is that there would be nothing forcing them to actually lay out any money right now - not this year, not next year, etc.. eventually they would have to put the money into the savings plans, but it would not have to be at any specific time.
This was exactly what the Ministry wanted with the budget cuts - just a delay in giving the money, not an actual cut. Litzman refused it before.
I think a savings plan is a great idea. However, I am not sure why Litzman is considering it. From Litzman's perspective the purpose of the child allowances, and raising them, is to give parents money to feed the kids basic necessities. Changing that to a savings plan is nice, but it does not help these needy families put bread and milk on the table right now. With that being Litzman's main issue, I am not sure why he is entertaining the idea at all, but it might just be to not have the appearance of being unwilling to consider anything.\
While I think it is a good idea, the one thing I see wrong with it is that if the idea is to give them the opportunity to delay actually starting the savings plans, when will they start putting the money in? they will always find a reason why "now is not a good time" and "we can start it next year". When my kid turns 18 will there even be any money in it?
Another curiosity about this discussion is where is the rest of UTJ on this, let alone Shas? Yes, Litzman was insistent on the allowances and very vocal on the matter, but he is not the only voice of UTJ. UTJ is made up of factions. Where is Gafni on this? Is he willing or not? Whether the hassidic Coucnil of Sages thinks it is a good idea or not, don't they all have to work it out together? Has Litzman been given the authority from his UTJ peers to deal with this matter alone?
What do you think? is the Finance Ministry's plan a good one or not?
The Ministry has proposed, due to Litzman's refusal to budge on accepting cuts to child allowances that he worked so hard to achieve, that instead of giving child allowances, they would put aside money for each child, i.e. a savings plan for each kid, that would only be able to be opened and accessed when the child turns 18.
source: Calcalist
The only benefit to the Finance Ministry, it seems, is that there would be nothing forcing them to actually lay out any money right now - not this year, not next year, etc.. eventually they would have to put the money into the savings plans, but it would not have to be at any specific time.
This was exactly what the Ministry wanted with the budget cuts - just a delay in giving the money, not an actual cut. Litzman refused it before.
I think a savings plan is a great idea. However, I am not sure why Litzman is considering it. From Litzman's perspective the purpose of the child allowances, and raising them, is to give parents money to feed the kids basic necessities. Changing that to a savings plan is nice, but it does not help these needy families put bread and milk on the table right now. With that being Litzman's main issue, I am not sure why he is entertaining the idea at all, but it might just be to not have the appearance of being unwilling to consider anything.\
While I think it is a good idea, the one thing I see wrong with it is that if the idea is to give them the opportunity to delay actually starting the savings plans, when will they start putting the money in? they will always find a reason why "now is not a good time" and "we can start it next year". When my kid turns 18 will there even be any money in it?
Another curiosity about this discussion is where is the rest of UTJ on this, let alone Shas? Yes, Litzman was insistent on the allowances and very vocal on the matter, but he is not the only voice of UTJ. UTJ is made up of factions. Where is Gafni on this? Is he willing or not? Whether the hassidic Coucnil of Sages thinks it is a good idea or not, don't they all have to work it out together? Has Litzman been given the authority from his UTJ peers to deal with this matter alone?
What do you think? is the Finance Ministry's plan a good one or not?
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Labels:
child allowances,
Litzman,
UTJ
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It will help pay for the chasunah and dirah when the time comes.
ReplyDeleteI think it's ridiculous. As you said, why would the chareidim agree to this? They need the money to put food on their tables so they can learn. More than that though, I hate the idea of forced savings. If I want to save money then I will. The government should be trying to get out of this business of telling me what I need to do with my money and not expanding it.
ReplyDeleteIt's not very different from the pension plans that all salaried employees are required to pay into each month.
DeleteFor the charedim, it's a GREAT plan. Because the child allowance money will go to a savings plan (giving them some money in the future). And since nobody wants to see starving children, there will be some sort of new welfare plan to help poor families feed their children today. Double dip, for the win!
ReplyDeleteNice intention - a national savings plan - but quite ridiculous for a number of reasons:
ReplyDelete- as mentioned above - we need money now to feed our children. My budget was balance until Lapid and Bennet cut my allowance, and I am still trying to recover from the debt they pushed me into since then.
- who loses? Savings plan? Give me us break. We will get 0.3% interest????
- who wins? The banks! They get millions of free cash each month that is just going to sit around for them to play with
let the people decide how to handle their money.
"let the people decide how to handle their money."
DeleteHa! I have to laugh at this one. Because it's *NOT* "their money" it's money they take from other people!
Mark, who takes what money? Most of the kids getting the allowances are non-Haredi.
Deletethe money is not theirs for anybody to say just give us our money and let us handle it. It is money being given by the government for a specific purpose. The question is, can or should they change that purpose.
ReplyDeleteI do not know which is better, but I do like the idea of a savings plan, so when the kids turn 18 they already have some money put away. on the other hand, a lot of people need the money now to feed their kids.
as they say, a bird in the hand is worth two in the bush. I think in general people would prefer to have the money now, because who knows what will be later. they might cancel the program, making any savings already deposited to be relatively insignificant. they might make it difficult to redeem, with qualifying requirements., etc