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Gaza Disengagement Plan: Compensation for Jews Who Lost Homes in Disengagement

(Updated July 2011)

Overview of the Disengagement Plan

Under the disengagement plan, 21 Gaza settlements and four in the northern West Bank were evacuated in the summer of 2005. Under legislation passed by the Knesset, settlers are to be compensated for the loss of their homes, land and businesses.

The settlements were divided into four groups — three in the Gaza Strip and the fourth comprising settlements in the West Bank. On June 9, 2005, Israel’s Supreme Court rejected 12 petitions by opponents to the disengagement plan, ruling the pullout was legal and does not violate the settlers’ human rights. The court also rescinded four financial arrangements relating to compensation for the future evacuees:

  • The court rejected a clause which would have barred recipients of compensation from filing a standard lawsuit for damages.
  • The court, rejecting a deadline specified by the law, allowed settlers 30 days to choose the nature of the compensation plan they preferred.
  • The court ruled that settlers under 21 may receive compensation. The law had set 21 as the minimum age for receipt of compensation funds.
  • The court ruled that the day of actual evacuation will be used as the date used to determine the elements of the compensation package for each family, rather than June 4, 2004, as stated by the law.

The army sent thousands of soldiers to every settlement in the Gaza Strip on August 15, 2005 with notices informing the Jews that they were required to leave their homes and that those who left before the 17th would receive assistance from the IDF. Afterward, it was illegal for Israelis to stay and, at midnight on August 16, those that remained were to lose a significant portion of their compensation. The evacuation started on August 17, 2005, and was expected to take about a month, but the operation went so smoothly that the civilians were evacuated from Gaza by August 22 and the West Bank the following day.


Most of the Jews living in Gaza at the time of evacuation were children. More than 46 percent were under 14, 10 percent were between 15 and 19, approximately 15 percent were in their 20s and 28 percent were between 30 and 59 years-old. Originally, the compensation law allowed everyone over the age of 21, who lived at least five consecutive years in a settlement to be evacuated, to apply for a $560 grant per year. The Supreme Court ruling noted above, however, said younger settlers should also be eligible. Evacuated settlers were eligible for a moving grant of approximately $2,100 for a family of three, $3,200 for a family of four or five; and $4,200 for a family of six or more. New legislation would allow those building their own home to get a rental grant for a year with the option to renew for another year with the proper documents.

Settlers who relocated to the Galilee or Negev would be eligible for a $30,000 bonus. In the most recent incarnation of the compensation bill, settlers moving to Ashkelon would get similar amounts. Alternative land would also be offered in those areas instead of cash on a first-come-first serve basis.

Land was to be compensated at the rate of $50,000 per dunam (4 dunams = 1 acre), with the value to be matched to land in the south. Homes would be compensated at a rate per meter. Residents living in prefabricated homes built by the Housing Ministry would be compensated at the rate of approximately $620 per square meter. Those living in homes built by the Housing Ministry or private contractors would be compensated at the rate of approximately $780 per square meter. Those living in build-your-own-home projects would receive roughly $935 per square meter. The most recent compensation bill added an additional $100 in value for every meter of construction.

Settlers who lived in the area for a least two years are entitled to more money. New legislation called for an increase in the amount of individual compensation per year that a person has lived in the Gaza Strip from $550 a year to almost $1,100 a year. In the new compensation bill, a family of four that lived in the Gaza Strip for four years would receive a total compensation package of $113,000 (up from $76,000), and a family of five that lived there for six years would receive about $264,000 (up from $192,000). The average family should receive about $450,000.

Farmers were also offered three options to receive land to farm and a plot on which to build a house. If the farmer accepts the agricultural land he receives $30,000 less in compensation fees; if he takes the plot of land on which to build a home, he receives $60,000 less in compensation; if he accepts both plots, he receives $90,000 less. A farmer who agrees to receive a plot with land for both agriculture and a home, in the preferred areas of the Negev or the Galilee, is eligible to receive 80 dunams of land. A second option provides for an agricultural plot closer to the Gaza border while living away from that plot. In such a case, he is eligible to receive 40 dunams ready for farming and a second agricultural plot of 40 dunams that he can develop on his own. In the third option, he can choose to have a farm of 40 dunams in a sought-after area such as Nitzan, for which the government will pay up to $3,000 a dunam, along with a half-dunam plot on which to build a home, as provided to all evacuees who want to build their own home, under the disengagement implementation law. Should the farmer currently have less than 40 dunams in Gaza, but want to expand his farm, the government will pay $1,500 per dunam and not $3,000 for the additional dunams.

After the Palestinians rejected a plan by which the United States would use foreign aid funds to pay Israeli settlers to transfer their greenhouses to the Palestinian Authority, a deal was brokered whereby the European-funded Economic Cooperation Foundation was to purchase the hothouses for $14 million and then execute the transfer. The money was being contributed by James Wolfensohn, the special American envoy for the disengagement and former head of the World Bank (who donated $500,000), and several of his friends. The deal included 90 percent of the greenhouses; the remainder had already been dismantled by their owners.

Workers who lost their jobs as a result of the disengagement were eligible for unemployment benefits ranging from minimum wage (about $770) to twice the average salary (about $3,200) for up to six months. Workers between the ages of 50 to 55 would be eligible for a years' compensation, and those over 55 years old would be given a pension until they are 67 years of age, based on normative standards.

A special category was created for compensation for communities that moved en masse that included the government's commitment to replace communal buildings such as synagogues. In cases where a community did not move together and the communal property was lost, individuals would receive compensation for donations made to those buildings.

Tax on compensation sums given to business owners would be reduced from 10 to five percent.

The Prime Minister's Office ordered that 1,500 housing units, one for each settler family evacuated, be prepared by the Construction and Housing Ministry. To provide for the extra homes, the Housing Ministry doubled the number of apartments made available in the Negev region, with most located in Ashkelon, Ashdod, and Beersheba. According to Construction and Housing Director-General Shmuel Abuav, “The prime minister has said that we have to give options to all the families, so that there will not be any reason for anyone to be in a tent or without a roof.”

The housing ministry estimated that as many as one-third of the settlers might decide to take the compensation money from the government and find their own housing. The rest were originally to be housed in caravans in clustered communities across the Negev. The cost to the government of caravans, however, is more than five times that of apartments.

On September 7, 2005, the disengagement cabinet approved a regulation enabling those who did not leave by midnight August 14 - when Gaza was closed to Israelis - to receive their full compensation, even though they waited until the IDF evacuated them. Prior to the implementation of the disengagement, the government said that those who would not leave of their own free will would lose 30 percent in special compensation payments.

The total cost of the evacuation package adopted by the Knesset was 3.8 billion shekels, approximately $870 million; however, in light of the increase in the number of compensation claims after disengagement, the Knesset's Finance Committee approved on September 19, 2005, the allocation of an additional 1.5 billion shekels (roughly $250 million). Approximately $176 million was to be given directly to the evacuees and an additional $66 million to the owners of private businesses, while the remaining sum was allocated to finance the government's pullout-related expenses, mainly those of the defense, agriculture and housing ministries.

In April 2007, a ministerial committee approved the addition of nearly $125 million to the compensation budget for families evacuated from Gush Katif and northern Samaria.

In June 2010, according to a report released by the State Commission of Inquiry into the Handling by the Authorized Authorities of the Evacuees from Gush Katif and Northern Samaria, 70 percent of evacuees who were forcibly removed from their homes in August 2005 still lacked permanent housing and were living in temporary dwellings. Published close to five years after the evacuation of the settlements, the 488-page report documented how the government failed to resettle and properly compensate the 9,000 people removed from 21 communities in the Gaza Strip and four in northern Samaria.

On July 31, 2011, Israel's Cabinet approved an $87 million agreement that ended damage claims for compensation by Jewish evacuees.

Sources: Jerusalem Post, (September 13, 2004, October 25, 2004, November 1-2, 2004, February 8, 2005, February 16, 2005, May 9, 2005, August 12, 2005; September 19, 2005, April 25, 2007; January 7, 2009; June 16, 2010); IMRA, (September 26, 2004); JTA, (April 7, 2005; July 21, 2011); Ha'aretz, (June 13, 2005); JTA, (December 19, 2007)