High Court freezes contentious Knesset funds for Haredi schools, Settlements Ministry

Justice Stein issues order due to ‘apparent procedural flaws’ in convening Finance Committee; coalition accuses court of hypocrisy, says similar funds allocated by last government

The High Court of Justice on Wednesday froze the transfer of hundreds of millions of shekels in budgetary allocations made the previous day by the Knesset Finance Committee to ultra-Orthodox schools, the Settlements Ministry and the Religious Services Ministry, due to what it said were “apparent procedural flaws” in the convening of the committee itself.

The temporary court order froze the transfer of all funds allocated in yesterday’s hearing until a further court decision could be made, apart from funds allocated for emergency civilian expenses.

In his decision, Justice Alex Stein said the issue will be brought for a hearing before a panel of three justices “as soon as possible.”

Coalition MKs denounced the court, saying the intervention was unlawful and pointing out that the previous, Bennett-Lapid government had also approved budgetary transfers after elections were called.

The Shas party said the High Court had become “a branch of the opposition” and was “brazenly trampling on the Knesset,” while Knesset Constitution, Law and Justice Committee chairman MK Simcha Rothman called the decision “the swan song of judicial pirates.”

Democrats MK Naama Lazimi, one of the petitioners to the court against the convening of the Finance Committee, praised the court’s intervention.

“The coalition is transferring election bribes for military service evasion funds and money for politically connected groups, and then inciting against the court that stops the robbery,” Lazimi wrote on X.

After elections are called, Knesset committees can only convene under strict conditions. The Knesset House Committee approved a decision on July 17 restricting the Knesset Finance Committee to just one hearing after the Knesset’s dissolution on July 18.

That hearing was held on July 29 and lasted the maximum limit of 10 hours, before concluding, having conducted several budget transfers, but with the coalition failing to complete all the budgetary allocations it sought.

Finance Committee chairman Hanoch Milwidsky then decided to convene the committee for another session anyway to complete the required transfers, using a special clause of Knesset regulations.

Lazimi, together with the Israel Be Free organization, petitioned the High Court on Tuesday against the committee even convening, arguing that only one recess hearing was allowed under the law, and within the first two weeks of the recess — which has already expired. They added that the announcement of the new hearing had failed to give the required four-day notice to committee members; and that the budgetary allocations on the committee’s agenda included dozens of clauses that committee members did not have adequate time to review.

The petitioners also argued that previous High Court rulings have established a principle whereby the Knesset and government must act “with restraint” in making weighty decisions after the Knesset has been dissolved ahead of elections.

They noted that many of Tuesday’s budget allocations were done in the framework of “coalition funds,” budgetary earmarks for projects advanced by coalition parties, and that approving such funds in the election recess did not meet the required standard of restraint.

Knesset Legal Adviser Sagit Afik argued ahead of Tuesday’s hearing that the Finance Committee’s session was a “continuation hearing” of the July 29 hearing, and was therefore allowable, while the Finance Committee’s own legal adviser noted that 40 to 50 budgetary allocations were approved in the last Knesset election recess in 2022, including through the special clause used by Milwidsky.

Coalition whip Ophir Katz accused the High Court of hypocrisy in having frozen Tuesday’s budget allocations while in 2022, “when the government of deception of [Naftali] Bennett made budget transfers amounting to hundreds of millions of shekels a week before the elections, that was [apparently within] the Knesset’s authority.”

In Tuesday’s hearing, NIS 267 million ($88 million) was approved for Haredi education, including over NIS 12.5 million ($4 million) for Haredi culture and some NIS 26 million ($8.5 million) for preventing Haredim from dropping out of yeshivas.

The committee also voted to give the Settlements Ministry NIS 157 million ($52 million) in direct funding as well as NIS 142 million ($47 million) in commitment authorizations for previously approved budget items.

Among the budgetary allocations to the Settlements Ministry that have now been frozen were NIS 30 million ($10 million) for a government program designed to provide social help for at-risk youth in illegal settlement outposts in the West Bank, supposedly with the goal of reducing the involvement of such youth in violence in the territory.

The program has been criticized, however, since it helps the youth remain in the illegal outposts, which have frequently been the source of severe violence against local Palestinians.

The funds also included some NIS 26 million ($8.5 million) for preventing Haredim from dropping out of yeshivas, despite a 2025 announcement that the government would no longer finance the education of ultra-Orthodox youths who are studying at so-called “drop-out yeshivas” and refuse to enlist in the IDF for their mandatory service.

Drop-out yeshivas are institutions designed to keep Haredi men who are not interested in full-time religious study within an ultra-Orthodox framework, to prevent them from leaving the community.

The committee also authorized funding for yeshivas that encourage military service as well as Haredi hesder yeshivas, which combine military service with Torah study and are largely affiliated with the national religious community.