Increasing employment among low-skilled individuals has been a major policy objective in Israel for some years. Sizeable cutbacks in welfare benefits in the early 2000s, while motivated by public finance concerns, were also seen as a way to reduce dependency on welfare among the low-skilled groups. Overall, the financial incentives to work provided by the tax and transfer system are strong. This is because of low taxation, relatively low benefits for those out of work, and the availability of income support for those in work. In practice, however, access to benefits is limited, due to very strict eligibility conditions for both unemployment benefits and income support. Since 2005, a pilot welfare-to-work programme has been running in four regions with large minority populations, which was initially tilted towards getting participants off the welfare rolls rather than into sustainable jobs. Reforms implemented in 2007 have improved the incentive structure for private operators, but problems remain. For example, competition among the operators is limited and the payment structure varies little with the characteristics of clients. A pilot earned income tax credit has also been in place since 2008 in the same regions, but the amounts are currently too small for it to ensure a decent standard of living and reduce in-work poverty.