Behind Tel Aviv’s glittering tech startups and Jerusalem’s ancient stones the myth of Israeli prosperity is cracking.

According to Latet’s new poverty report, approximately 2.76 million Israelis are struggling with poverty, including 678,200 families and a staggering 1.24 million children as the cost of survival keeps climbing.

A family of four now needs 13,617 shekels monthly for basic essentials – a 6.9% jump that adds another 10,500 shekels to annual household expenses. Middle-class families aren’t immune either, with normal living costs soaring to 22,181 shekels monthly. These increases have outpaced inflation, which sits at 3.6%, driven largely by surging prices for food, housing, and utilities.

For families receiving financial aid, the numbers tell a story of impossible choices. Their average monthly expenses of 10,367 shekels dwarf their typical income of 6,092 shekels. Many first exhaust their savings, then turn to loans, beginning a downward spiral that has forced nearly 80% of them into debt just to survive.

The impact on children has been particularly severe. In supported households, 44.6% of kids are showing declining academic performance – triple the rate of their peers. Nearly half suffer serious mental health effects, while 22.8% of families report at least one child dropping out of school entirely. This has forced some parents to make unthinkable choices, with 18.9% sending children to boarding schools because they can’t afford to keep them at home.

Israel’s elderly population faces particularly acute challenges. Among seniors receiving aid from Latet, 81.7% live in poverty, with 52.6% experiencing extreme poverty. A troubling 60.4% have foregone essential medications or medical treatments due to cost constraints, while 34.8% face severe food insecurity.

Sadly, the daily struggle for food has become a defining feature of life for many families. About 80% of supported households report running out of food with no money to buy more. Even more troubling, half of parents in need have been forced to cut back on infant formula, potentially putting their babies’ health at risk.

At 28.6%, Israel’s poverty rate dwarfs those of other developed nations, nearly double the United States’ 17.8% and more than triple Germany’s 9%. Looking ahead, Israel’s planned economic measures only stands to worsen the situation. Proposed increases in VAT, social security payments, health insurance, and utility costs, combined with high inflation and interest rates, threaten to push thousands more low and middle-class families into poverty.

With war straining national resources and poverty devouring families whole, Israel’s vaunted social safety net isn’t just fraying. It’s coming apart at the seams.