NII benefits cover almost all major contingencies of income loss including old age, unemployment, disability and maternity. Children's allowances are paid, regardless of income, according to the number of children up to age 18 in the family. (This formulation is also used as the basis for calculating families' income taxes.) In 1994, 795,000 families received children's allowances. Children's allowances comprised 21.3% of the benefits paid by the NII and approximately 1.7% of GNP (Achdut, 1995).

Children's allowances are paid on the basis of "credit points" allotted to each child in the family. The more children in a family, the higher the number of "credit points" received both due to the larger number of children and due to the greater number of "credit points" allotted to each child from the third child, onward. One of the major issues concerning children's allowances is their failure over the years to maintain their purchasing power, thus decreasing their effectiveness in providing a minimum income to families with children, especially large families. According to NII data, the value of a credit point in 1975 was 4.4% of the average wage, while its value in 1994 was 2.9% of the average wage. The 1994 average monthly wage was $1,282 (Central Bureau of Statistics, 1995c). Similarly, the allowance provided for a family with four children amounted to 27.4% of the average wage in 1975, compared to 23.2% in 1994 (Achdut, 1995).

Another issue associated with children's allowances is the inequality in the benefits paid for Jewish children and Arab children. "Credit points" provided to the fourth and subsequent children are higher for families in which at least one of the members served in the military. Since most of the Arab population is exempt from military service, the benefits paid to this population have been lower. In January 1994, the government began a four-year program to equalize benefits paid to families whose members have not served in the military so that all families in Israel will receive benefits in accordance with family size alone (Achdut, 1994).

Income support benefits are paid to families and individuals who do not reach the minimum income level according to the Income Support Law legislated in 1980 and administered by the NII. There are two major groups included among these individuals and families: senior citizens, whose sole source of income is the NII old-age flat-rate benefit; and families and individuals whose income does not reach the minimum level and who are not covered by other income maintenance programs. Eligibility for income support benefits is determined by income and by proof of inability to integrate into the labor market. Income support benefits paid to families or individuals included in the second group comprised 5.2% of the NII expenditure on benefits in 1994. These benefits were paid to approximately 70,000 families and individuals, 49% of whom were families with children (25% single-parent families, 24% two-parent families).