Israel faces crisis as elderly population nears two million, NII stability threatened

Israel’s State Comptroller Matanyahu Englman dropped a report this week that reads like a to-do list the government wrote over a decade ago and never opened. The country’s population aged 65 and older sits at roughly 1.2 million as of 2024, with projections pushing that figure toward two million in the coming years. The infrastructure to support them, per Englman’s assessment, essentially doesn’t exist in any coordinated form.

Israel has officially recognized its aging population as a “strategic socioeconomic challenge” for more than ten years. And yet no single government body has been given the authority, budget, or responsibility to actually do something about it.

A fractured system with no quarterback

The report lays out a bureaucratic mess. Responsibility for elderly Israelis is currently carved up among the Health Ministry, the Welfare Ministry, the Social Equality Ministry, health funds, and the National Insurance Institute, known as the NII. Pensions, healthcare, long-term care, welfare services, and retirement support all fall under different roofs with no shared blueprint.

The NII, Israel’s equivalent of Social Security, is the entity that manages pensions and elderly benefits. It faces its own existential problem. According to the comptroller’s findings, the fund risks fiscal depletion as early as 2036. The culprit is a conservative investment strategy that leans heavily on low-yield government bonds.

The crypto tax gap worth $800 million

Englman didn’t stop at elderly care. In a related but separate finding, the comptroller took aim at the Israeli Tax Authority for what he characterized as a lax approach to crypto tax collection. The estimated damage: NIS 3 billion, or approximately $800 million, in potential revenue that simply went uncollected due to inadequate enforcement.

What this means for crypto investors and markets

Notably, the comptroller’s report found no evidence of blockchain-based solutions being integrated into NII services. The NII’s investment strategy is another angle worth watching. A fund that’s over-indexed on low-yield government bonds in 2026 is a fund that’s been left behind by modern portfolio theory, let alone the emergence of digital asset classes.

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