Rav Zilberstein: Maaser Can Be Used For Repaying Long-Term Child Investment Loans

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JERUSALEM (VINnews) — Recently, several communities have launched a new initiative aimed at easing the financial burden on Torah scholars when it comes time to marry off their children. The initiative involves long-term loan plans, and Rabbi Yitzchak Zilberstein, a prominent halachic authority, addressed this initiative when asked if it was permissible to use maaser (tithes) funds for this purpose.
The initiative is based on a long-term investment plan for the marriage of children. The idea is that the kollels will lend the scholar a sum of several tens of thousands of shekels, with a convenient repayment plan. The scholar then invests the money in the stock market.

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The scholars wondered whether they could repay the loan using maaser funds, since the money is specifically for the marriage of their children, and it will ultimately be invested in the stock market.

This issue has sparked widespread debate in the halachic world, with many halachic authorities leaning towards prohibiting the use of maaser funds for this purpose, and some even forbidding it altogether.

Rabbi Yitzchak Zilberstein addressed the issue in response to scholars from Kollel Rashbi in Bnei Brak, where he permitted the initiative.

In the popular weekly “Divrei Chemed,” which publishes teachings of Rabbi Zilberstein, he addressed the topic in depth. “Kikar HaShabbat” published the main points of his response.

At the beginning of the discussion, the question is presented: “In short, the program is as follows: As soon as the child is born, the community gives the scholar a loan of 30,000 shekels [this varies by community, some give less]. The loan is not directly transferred to the parents’ account but is deposited for them by the program into a savings policy under the parents’ name with ‘Migdal’ insurance (in a fund that tracks the S&P 500 index). Over the following years, the young parent repays the loan to the fund in small monthly installments, such as 200 shekels per month.

Meanwhile, the money accumulates high returns, as, according to the historical data of the last 70 years, this index has yielded an average annual return of 10.5% (last year, it had a return of 30%). While there have been years of significant losses, the index generally recovers over time. Therefore, the idea is to invest primarily for the long term. Furthermore, parents are expected to contribute their children’s allowances to the program and also double the allowance. After 20 years, the parents are expected to receive approximately 150,000 shekels, after deducting various fees (collection fees and taxes).”

The program continues: “The advantage of the loan is that, instead of receiving a loan of 70,000 shekels at the time of their children’s marriages, parents receive less than half of this amount immediately upon the child’s birth, and the return is more than double, not as a loan but as a grant.

While any private individual can invest on their own, there are several advantages to investing through a group, including the immediate loan, the higher interest rate accumulated, and the fact that money cannot be withdrawn early, but only when the specified time arrives. This program has been developed by many experts and has been halachically reviewed by rabbis who have confirmed that it does not involve any halachic issues. This is seen as a case of ‘who is wise? He who sees the future.'”

As a result, the following questions were posed to Rabbi Zilberstein:

  1. Is it permissible to use maaser funds for this investment? That is, can one take the loan from this fund and repay it (200 shekels per month) using maaser funds, since the money will ultimately be used for the children’s marriages?
  2. I have maaser funds deposited in a gemach (charitable loan fund) that lends money to scholars. Instead of material profits, I accumulate spiritual rewards. Although I could also receive a large loan from there when the time comes, in this investment I would receive a grant. Is it permissible to withdraw the funds from the gemach and invest them in this program, or is this prohibited as a type of vow (neder)?
  3. Until now, I have been donating my maaser funds to charity. The question is, may I now stop the charity donations and invest all my maaser funds in this program (and since I made a condition regarding my charity donations, there is no concern regarding a vow)?

Rabbi Zilberstein expanded on the matter and discussed it in detail. His conclusions were as follows:

  1. It is permissible to allocate maaser funds to this program starting when the child is born. If the scholar cannot afford the full amount, he can allocate part of his maaser funds—half of it for the program, and the other half for charity.
  2. It is permissible to withdraw funds from the gemach for this purpose because it is ultimately for the benefit of charity, as the scholar will have financial support when it comes time to marry off his children (and will not need to rely on charity or loans).
  3. It is permissible to stop giving charity with the maaser funds that were previously dedicated to charity, as long as the scholar made a condition regarding the donations. The scholar may allocate half of the maaser funds to the program and the other half to charity.

 

 

 

 

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Dav
Dav
1 month ago

I dont get it. Why cant the community invest the money and just give him the profit when the child gets married? that way nobody needs to repay anything

Am I missing something?