REPORT: One in 5 Israelis lives in poverty

Nearly two million Israelis — one-fifth of the country's population — are living below the poverty line, according to a stark new government report that highlights deepening economic challenges in a nation already grappling with war and its aftermath.

The annual poverty report, released Wednesday by Israel's National Insurance Institute, paints a particularly troubling picture for the country's youngest citizens: more than 872,000 children, or roughly one in three Israeli children, live in poverty. The findings come as Israel continues to weather the economic impact of both the COVID-19 pandemic and the ongoing war that began with Hamas's October 7 attack.

"The economic difficulty and the war's economic impact will continue for years ahead," said Zvika Cohen, acting director general of the National Insurance Institute, emphasizing the need for immediate policy interventions.

The poverty threshold in Israel stands at 3,324 shekels (approximately $900) monthly for individuals and 12,465 shekels ($3,400) for a family of five, according to OECD metrics. The report reveals particularly stark disparities among different communities: poverty rates reach 42.4% among Arab families and 22.5% in Ultra-Orthodox communities — double their proportional representation in the population.

Geographic inequalities are also evident. In Modi'in Illit, an Ultra-Orthodox city in central Israel, nearly half the residents live below the poverty line, making it the nation's poorest city. Jerusalem, the capital, follows with 38.3% of its residents in poverty.

The study highlighted some modest improvements: fewer households reported skipping meals or medical treatments due to financial constraints compared to the previous year. However, about a quarter of Israeli households still struggle to cover basic monthly expenses.

Government assistance programs have played a critical role in preventing even higher poverty rates, the report suggests. Without state benefits and grants, officials estimate that poverty rates would have climbed significantly higher. Yet compared to other developed nations, Israel's social safety net provides relatively modest support.

Labor Minister Yoav Ben Tzur pointed to rising employment rates and average wages as positive indicators, while acknowledging the need for targeted assistance to small businesses and vulnerable populations. "We see that socio-economic policy with compassion brings significant improvement," he said, "but ensuring this trend continues requires dedicated assistance."

Channel 13 contributed to this article.