The Palestinian “pay for slay” policy incentivizes terror against Israelis by rewarding terrorists with monthly salary stipends far in excess of regular social welfare payments. Palestinian payments to incarcerated or released terrorists—the “Prisoner’s Fund”—which is mandated by Palestinian law, totaled approximately $330 million in 2018, roughly 7 percent of the Palestinian Authority’s $5 billion budget that year.[1] The Palestinian Authority also operates a “Martyrs Fund” for the families of those killed while carrying out acts of terror. According to The World Bank, the Martyrs Fund did “not seem justified from a welfare or fiscal perspective,” the prisoners fund was “the most generous PA program” and the combined programs benefited a relatively small number of families.[2]

Palestinian law fixes the amount of the monthly stipends for convicted Palestinian terrorists through its Prisoner’s Fund based on the length of the prison term, such that the more serious the crime, the longer the prison sentence and the higher the salary.[3]  The International Criminal Court’s chief prosecutor Fatou Bensouda has warned that Palestinian stipends to attackers and their families could constitute a war crime.[4]

In 2018, Israel passed a law allowing the country to deduct the amount of these terrorist payments from the taxes that Israel collects and transfers to the Palestinian Authority pursuant to the Oslo Accords. Under that law, Israel withholds the approximate amount included in the PA budget for these payments, but has continued to transfer the remaining sums collected on the PA’s behalf. This arrangement was temporarily halted after the PA announced in June 2020 that it would refuse to accept the monthly transfer of over $100 million as part of ending coordination with Israel. The transfer of some $725 million in back-tax revenues was eventually authorized by the Israeli security cabinet after the PA decided to renew cooperation in November 2020.[5]

A number of Western governments have cut off direct funding to the PA because of these payments incentivizing terrorism. For example, in December 2017, the U.S. Congress passed the Taylor Force Act, which calls on the Palestinians to “stop payments for acts of terrorism by individuals who are imprisoned after being fairly tried and convicted for acts of terrorism,” and for those who died committing acts of terrorism.[6] The Act makes any further U.S. aid dependent on the Palestinians revoking any law which authorizes “a system of compensation for imprisoned individuals that uses the sentence or period of incarceration of an individual imprisoned for an act of terrorism to determine the level of compensation paid.”

In 2018, Australia also cut off direct funding to the PA, with Foreign Minister Julie Bishop saying that “any assistance provided by the Palestine Liberation Organization to those convicted of politically motivated violence is an affront to Australian values and undermines the prospect of meaningful peace between Israel and the Palestinians.”[7]

In November 2019, the Netherlands cut its funding to the Palestinians over salaries to terrorists, saying talks with the PA “did not lead to the desired outcome.”[8]

In sum, members of the international community including governments and international bodies have joined Israel in recognizing the dangers posed by the financial incentivization of Palestinian terror, and have acted accordingly.