The High Court of Justice on Wednesday ordered the Knesset Finance Committee to reconvene and hold a fresh discussion on the remaining funds from the disputed transfer to haredi educational networks, after justices indicated during the hearing that the original approval process had been unlawful and lacked a sufficient factual basis.
In a short decision issued after the hearing, Justices Yael Willner, Ofer Grosskopf, and Gila Canfy-Steinitz said the parties had accepted the court’s recommendation that the Finance Committee meet for renewed deliberations on the budget request concerning the funds still covered by the interim order issued on December 31, 2025, and issue a new decision on those funds.
The practical significance is that the renewed committee discussion will concern the NIS 98 million that has not yet been transferred, rather than the broader roughly NIS 800 million at the center of the petitions.
The court further said the new decision must be made only after committee members receive all the material they need in order to reach an informed decision. The committee intends to convene next Tuesday, March 31, and any budget requests or information the committee requires should be provided by the relevant ministries as soon as possible, so that the discussion can take place on that date.
The committee and its chairman, MK Moshe Gafni, were ordered to file an update after the new decision is made, and no later than April 15. The court said it would decide how to proceed with the petitions after receiving that update.
The outcome followed a hearing in which Willner repeatedly pressed the parties on whether the Finance Committee could legally adopt a new position after an earlier unlawful one, appearing to steer the discussion toward a procedural reset rather than the more explosive question of whether money already paid, including salaries, would have to be returned.
That direction had emerged clearly during the hearing, where Willner indicated there was no real dispute that the transfer process had been unlawful. The justices’ solution effectively avoids, for now, the hardest retroactive question in the case by limiting immediate relief to the unpaid portion of the transfer.
High Court to hear haredi school funding dispute
The petitions were brought by Hiddush along with Democrats MK Naama Lazimi, alongside a parallel petition by Yesh Atid lawmakers, over a December 25, 2025, budget transfer involving funds directed to the main party-affiliated haredi school networks.
The legal fight has focused on claims that most of the money was advanced before Finance Committee approval and that lawmakers were asked to sign off without receiving the data needed to understand how much of the allocation should have been offset, including over schools’ noncompliance with core curriculum requirements.
That argument remained central on Wednesday. The petitioners have said the committee never received the factual basis needed to assess what deductions should have been made, particularly in light of information the Education Ministry holds on which schools do and do not teach core studies. Their position has been that if those figures were fully presented, the amount the networks were entitled to receive would drop significantly.
Before the hearing began, Opposition Leader Yair Lapid attacked Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich at a press conference outside the courtroom, accusing them of having “built a covert mechanism that siphoned off billions of shekels from Israeli taxpayers and transferred them to the haredim.”
“It’s time for the Israeli public to stop being the cash cow of the haredim,” Lapid said. “We will not let them continue to steal.”
Also present at the hearing were Lazimi and Yesh Atid MKs Meirav Cohen, Vladimir Beliak, and Moshe Tur-Paz.
Inside the courtroom, a representative of the haredi institutions defended the practice by saying that transferring funds before Finance Committee approval had been done for years under multiple governments. “Unfortunately, only we got caught,” he said.
The court’s decision stops well short of the transfer of about NIS 800 million to the haredi educational networks. For now, the concrete relief is narrower: the committee must revisit only the remaining NIS 98 million still frozen under the interim order, and do so based on fuller information.
Still, the ruling is a significant setback for the state and for the way the transfer was handled. It formally sends the matter back to the Finance Committee, requires a new vote, and makes clear that lawmakers must be given the material necessary for an informed decision before approving the remaining funds.
Hiddush deputy director Dr. Yifat Solel said after the decision that the organization would insist that the full factual basis be placed before lawmakers so they could determine how much of the remaining NIS 98 million should be offset. Lazimi said the affair was not a mishap but a method, and accused the state of trying to drag out a process that continued to damage both the status of the Knesset and the public interest.
The broader petitions, however, remain pending. Once the committee reports back by April 15, the court will decide how to continue handling the case.