HCJ 4124/2000

IpsofactoJ.com: International Cases [2010] Part 6 Case 7 [SCIsr]


SUPREME COURT OF ISRAEL

(sitting as the High Court of Justice)

Coram

Yekutieli, decd

- vs -

Min of Religious Affairs

D. BEINISCH, President

A. PROCACCIA, Judge

E.E. LEVY, Judge

A. GRUNIS, Judge

M. NAOR, Judge

S. JOUBRAN, Judge

E. HAYUT, Judge

14 JUNE 2010


Judgment

President D. Beinisch

  1. Students who are studying in a kollel have been eligible for the payment of a minimum income support benefit by virtue of a budget item included in the annual budget laws since 1982. In contrast, students studying in institutions of higher education or post-secondary institutions and also in religious institutions and students in yeshivot and Torah study institutions are not eligible for payment of the income support benefit under the provisions of the Income Support Law, 5741-1980. Is the arrangement for the payment of income support benefits to the kollel students [avrechim] by virtue of the budget item legal and constitutional? Is the distinction between the various groups of students lawful? These are the questions the petition before us raises.

    The factual background

  2. Since 1982, the annual budget laws have contained a budget item entitled “Minimum income support for kollel students” (hereinafter: the Budget Item). Originally, the Budget Item was part of the budget of the Ministry of Religious Affairs and, with dissolution of the Ministry in 2004, the Budget Item was transferred to the budget of the Ministry of Education. Under the Budget Item, kollel students who meet various conditions of eligibility are paid an income support benefit. In 2009, the annual budget was NIS 121,161,000 and benefits were paid to some 10,000 kollel students. The amount of the benefit was determined by distribution of the annual budget among the number of entitled kollel students.

  3. The legality and constitutionality of the Budget Item are at the heart of the petition before us. The petition was filed by a group of students and student representatives from various universities in Israel, and a nonprofit organization which declared that it acts to promote freedom of religion, conscience, education and culture. Petitioner 4, Jenny Baruchi, who was among the petitioners from the outset, has also fought to promote the subject of the petition in a public effort. She also voiced these matters to us at the last hearing that we held. The petitioners’ main claim is that the payment of income support benefits to kollel students by virtue of the Budget Item is discriminatory. The claim of discrimination is based on the distinction between two legislative arrangements that deal with the payment of income support benefits – the Income Support Law, 5741-1980 (hereinafter: the Income Support Law or the Law) on the one hand, which regulates income support benefit payments to all those entitled in Israel; and the Budget Item on the other hand, which regulates the income support benefit payments solely to kollel students.

    The Income Support Law

  4. The Income Support Law was passed by the Knesset in April 1980 and went into effect in January 1982. The Law regulates the payments of income support benefits to all those eligible for them in Israel. The Law sets forth, inter alia, the conditions for eligibility for the benefits, the rates of the benefits, the manner of calculating the income of the benefit applicants, the grounds for denying the benefits and the authority to adjudicate claims regarding payment of the benefits. The benefits under the Law are paid from the state treasury through the National Insurance Institute. Chapter B of the Law sets forth the three basic conditions of eligibility, whereby a resident of Israel who is at least 25 years of age is eligible for the benefits, provided that he does not have the capacity to work and support himself or he cannot be placed in any job; he has no income from any source whatsoever; and he has been a resident of Israel for at least 24 months. Along with the basic conditions, the Law specifies various grounds for eligibility for income support benefits, and a number of exceptions that enable receipt of the benefits, even without meeting the basic conditions of eligibility. It should be noted that during the years since its enactment, several amendments have been made to the Law in an effort to reduce the number of income support benefit recipients and to reduce the amount of the monthly benefits (see, e.g., HCJ 366/03 The Commitment to Peace and Social Justice Association v Minister of Finance, IsrSC 60 (3) 464 (2005) (hereinafter: The Commitment to Peace and Social Justice Association Case).

  5. The dispute between the parties is based on Section 3 of the Income Support Law, which deals with qualifications to eligibility for the benefits. Section 3 defines the groups of people who are not eligible for the income support benefits, even if they meet the general eligibility conditions set forth in Section 2 of Law. Section 3 states that a person will not be eligible for the benefit if he is institutionalized and his entire maintenance is paid by the state treasury, the Jewish Agency, a local authority or another entity to be determined in the regulations; a person serving in compulsory IDF service; and a member of a corporation that is responsible for the sustenance of its members. Section 3(4) of the Income Support Law sets forth the relevant qualification for the petition before us, under which “a student learning in an institution specified by the minister in the regulations and other conditions that he determined” will not be eligible for the benefit. It should be noted that in 2008, an exception was made to this qualification whereby an undergraduate student who is a single parent and who would have been eligible for income support benefits for at least 16 out of the 20 months that preceded the month in which he commenced his studies, would be eligible for income support (Amendment 33 to the Law, 5768-2008). This exception, which was added to the law following the filing of the petition before us, did not, according to the petitioners, resolve the discrimination between kollel students and other students in general, and we will discuss that further on.

  6. When the Income Support Law went into effect in 1982, regulations were enacted regarding institutions, attendance at which would deny eligibility for income support benefits. Section 6(a) of the Income Support Regulations, 5742-1982 (hereinafter also: the Regulations) states as follows:

    6.

    (a)

    The following shall be deemed an institution for the purpose of Section 3(4) of the Law:

    (1)

    Any institution of higher education that has been recognized under the Counsel for Higher Education Law, 5718-1958, and an institution that requires a permit under Section 21A of the same law;

    (2)

    Another institution for post-secondary studies;

    (3)

    A yeshiva or Torah study institution;

    (4)

    An institution for training religious clerics;

    (5)

    Another educational institution in which students are taught systematically, except for –

    (a)

    An educational institution whose purpose is not to train students for government examinations or to provide education that is recognized by a government ministry or under any law;

    (b)

    An institution that provides training as defined in Section 2 (A) 2 of the law – if the trainee would have been eligible for benefits if not for that stated in Section 3 (4) of the law.

  7. Therefore, pursuant to that stated in the Regulations and in accordance with Section 3 of the Income Support Law, students in universities, in institutions of higher education and in institutions of post-secondary education, students in yeshivot and in Torah study institutions, and students in institutions for training religious clerics are not eligible for income support benefit payments.

    The Budget Item

  8. The same year that the Income Support Law went into effect, the Budget Item, which is the subject of the petition before us, was added to the annual budget law. As stated, at first the item was part of the budget of the Ministry of Religious Affairs (Budget Item no. 22–04–21), and since 2004, the Budget Item has been included in the budget of the Ministry of Education (its number is now 20–38–21). Unlike the provisions of the Income Support Law, the Budget Item does not specify the conditions of eligibility for receiving the benefits, the rates of the benefits or the grounds for denying them. All that is contained in the Budget Item is the item heading, the scope of the annual expenditure and various data pertaining to utilization of the expenditure. From 1982 to this day, the Budget Item has remained in an almost identical format, and what distinguishes between the Budget Items from one year to the next is the amount of the annual allocation.

  9. For example, this is how the Budget Item looks in the 2009-2010 budget law (in thousands of New Israeli Shekels):

    Item

    Item name

    Net expenditure

    Income contingent expenditure

    Total expenditure

    Authorization for undertaking

    Max manpower

    Total utilized

    Percentage utilized

    203821

    Min income support for kollel students

    121,161

    1,500

    122,661

    0

    0.0

    96,818

    74.31

    (The state budget for 2009 and 2010 was determined in a biennial budget law, in accordance with the amendment set forth in a Basic Law: the State Budget for 2009 and 2010 (Special Provisions) (Temporary Provision), 5769-2009, which states that notwithstanding that stated in Sections 3 (A) (2) and (B) (1), and 3A of the Basic Law: The State Economy, the state budget for 2009 and 2010 would be a biennial budget).

  10. Notwithstanding that stated in the provisions of the Income Support Law and in the Regulations promulgated thereunder, whereby students and pupils in yeshivot and religious institutions are not eligible for income support payments, the Budget Item enables the payment of income support benefits solely to kollel students. When the petition before us was filed with the court, the Ministry of Religious Affairs customarily distributed the benefits pursuant to the Budget Item in accordance with internal conditions of eligibility that were determined by the Ministry (“Clarifications to the conditions of eligibility for income support benefits” dated December 27, 1998, and an application form for income support for 1999 were attached to the petition and marked F1 and F2 respectively). After the petition was filed, the director general of the Ministry of Religious Affairs appointed a committee to examine the criteria for granting income support benefits to kollel students and later, when the budget was transferred to the Ministry of Education, another examining committee was appointed in collaboration with the Ministry of Education and the Ministry of Finance. The committee formulated eligibility criteria which were submitted for the perusal of the court and the parties on March 10, 2005. The eligibility conditions under the Budget Item, as formulated by said criteria, are different from the conditions set forth in the Income Support Law. According to the criteria, a kollel student is eligible for income support benefits if he is an Israeli citizen or a permanent resident who learns a full day in a kollel or in two half kollels and meets the following conditions:

    1. he has at least three children

    2. his total monthly income (which is calculated in accordance with the rules set forth in the criteria) does not exceed 60% of the amount of the monthly support (which is determined by the Ministry of Education, taking into account the number of the entitled, the scope of their eligibility and the amount of the budget that was allocated in the state budget)

    3. the kollel student and his immediate family have no property such as an additional apartment, real estate, a business or vehicle (subject to the conditions set forth in the criteria).

    The eligibility conditions further specify the manner of submitting of the application and the documents that the kollel student must attach thereto, the conditions whereby ownership of additional property will not preclude the eligibility for the benefits, and the manner of examining the eligibility by the Ministry. The response of respondents 1-6 (hereinafter: the State) shows that due to the application of the criteria, only about 20% of the population of kollel students are found to be entitled each year to income support benefits. It should be noted, however, that over the years, the number of kollel students eligible for benefits has increased, even though the annual budget has remained relatively unchanged. In 1986, for example, 2,650 kollel students received income support benefits while in 2009, benefits were distributed to approximately 10,000 kollel students.

    The essence of the dispute

  11. The differences between the two legislative arrangements – the Income Support Law on the one hand and the Budget Item on the other – are at the heart of the dispute between the parties. The petitioners want us to declare the Budget Item invalid or, at the least, that we order the cessation of the income support payments thereunder, as long as the Item is not applied equally to women, students in institutions of higher education, members of other religions and other denominations of Judaism. Their claim, in short, is that the Budget Item “circumvents” the provisions of the Income Support Law and grants kollel students income support benefits notwithstanding the fact that such benefits have been expressly denied them in the Income Support Law; just as they were denied to students in institutions of higher education. The petitioners further claim that the Budget Item violates the provisions of Section 3A of the Foundations of Budget is Law, 5745-1985, and constitutes a primary arrangement that should not be determined in a budget law. The petition is directed against the Minister of Religious Affairs, the Minister of Finance, the budget director of the Ministry of Finance, the chairman of the Knesset Finance Committee, the National Insurance Institute and the Minister of Labor and Social Affairs. After the petition was filed, and at their request, three more respondents were joined: the Movement for Fairness in Government – a movement which declares that it “identifies .... with the aspirations and desires of the public [the kollel students] to continue on its unique path which stems from pure ideology that is worthy of esteem and protection” and two kollel students who are studying in a kollel and are eligible for the payment of income support. The respondents filed separate responses to the petition but there is one pivotal claim common to all of them – in their view, the distinction between kollel students and [non-kollel] students is not tantamount to prohibited discrimination since it is based on relevant differences. The respondents, whose individual responses will be presented below, believe that a distinction should be made between the purposes of the studies, the nature of the studies and their duration in a comparison between students in institutions of higher education and kollel students. While [non-kollel] students pursue their studies for the purpose of acquiring a profession, kollel students study for the sake of the study itself and their learning is not conducted for any other purpose. Therefore, it is not an intermediate period for them, but rather a way of life which the legislator chose to support and encourage.

    The factual sequence in the petition

  12. The petition before us was filed in 2000. The issue raised by the petitioners has, for years, occupied various relevant entities, among them the executive branch and the Knesset, considering the nature of the special arrangement that was determined in regard to the kollel students for whom “The Torah study is their profession [Torato omanuto].” On June 13, 2001 this court issued an order nisi (Justices E. Matza, T. Strassburg-Cohen and E. Levy). Initially, the petition was heard before a panel of three justices and later on that panel was expanded and the petition was pending for many more years than is customary in this court. In the years that passed from the date the petition was filed to the rendering of the judgment, the factual and legal framework pertaining to the petition was clarified and developed, and underwent several changes. Initially, the state requested that the professional entities be allowed to formulate criteria for implementing the Budget Item and the court acquiesced to several motions for continuances, which were submitted by the state with the aim of enabling the committee at the Ministry of Religious Affairs – and, upon its dissolution, at the Ministry of Education – to complete formulation of the criteria. The conditions of eligibility were formulated and submitted for the perusal of the court and the parties in 2005. That year, the panel of judges also ruled that the judgment in the petition before us would be given after judgment was rendered in HCJ 6427/02 Movement for Quality Government v the Knesset (unpublished, May 11, 2006) (hereinafter: the Tal Law Case). The Tal Law Case and the petitions that were joined to it dealt with the constitutionality of the Deferral of Service for Full Time Yeshiva Students Law, 5762-2002, (hereinafter: the Deferral of Service Law), which regulated the deferral of military service for yeshiva students whose profession is Torah study. Due to the importance of the issue and the practical connection between the petitions pertaining to kollel students and the requirement that was valid in the past regarding their inability to work, we believed that it was best to wait for a decision to be rendered in these petitions before deciding the petition before us. On May 11, 2006, a judgment was rendered in those petitions and the court ruled that the Deferral of Service Law violated equality and the right to dignity of Israeli citizens who serve in the IDF, a right which is anchored in the Basic Law: Human Dignity and Liberty. Notwithstanding this, the court refrained from ruling that the Deferral of Service Law was unconstitutional, because it was not possible to assess whether the law meets the conditions of proportionality before there was a chance to examine its operation and its results over time. Therefore, the majority opinion was that there was grave concern about the law’s unconstitutionality, and that it was liable to become unconstitutional if a significant change did not occur in the results of its fulfillment during the time designated until its expiration. This decision of the court invited additional petitions that were directed against the application of the law (HCJ 6298/07 Ressler v Knesset of Israel). These petitions are also relevant to the discussion before us and they can shed light on the changes in Israeli society in general and in ultra-orthodox society in particular, with regard to induction into the army and, in this case, primarily with regard to integration into the job market. The judgment in these petitions has not yet been rendered, however, an interim decision was given on September 8, 2009. In its decision, the court noted that the pace of handling the mechanisms for implementing the law, like the pace of the allocation of resources to the application of the law is “very far from what could have been expected in the circumstances of the matter” (paragraph 9 of the decision rendered by Justice E. Hayut). However, the court ruled that before a final position is taken with regard to the constitutionality of the Deferral of Service Law, the mechanisms designed to apply the law must be given an additional period of 15 months to test their effectiveness and ability to lead to significant change.

  13. Because the issue of the special arrangement of income support benefit payments to kollel students was not resolved after the criteria were established for distributing the budget to the kollel students, the legislator was also required to deal with the issue before us. In 2008, the Knesset passed Amendment 33 to the Income Support Law – known as the “Jenny Baruchi Law,” named for petitioner 4. According to the amendment, income support benefits are not denied to single parents who begin to study toward an undergraduate degree. The amendment was the result of public pressure by single parents, among them, as stated, one of the petitioners in the petition before us, who wanted the opportunity to break the cycle of requiring state support by acquiring higher education. Prior to the passing of the amendment, single parents who had been receiving income support benefits and decided to study in an institution of higher education were forced to give up the benefits, since, upon commencement of their studies, they became subject to the provisions of Section 3 (4) of the Income Support Law, whereby the benefits are denied to a student in an institution of higher education. Amendment 33 resolved the issue of students in the same situation that Petitioner 4 had been in at the time the petition was filed, and the petition, insofar as it relates to discrimination against students who are not single parents, remains in place.

  14. In the nature of things, in the time that has passed from the date the petition was filed to the rendering of the judgment, changes and permutations have occurred, not only at the factual and legal level, but also at the public-social level. The decision in the petitions regarding the legality of the arrangements for exemption from military service (HCJ 3267/97 Rubinstein v Minister of Defense, IsrSC 52 (5) 481 (1998)) led to the end of a long period in which various petitions were adjudicated which demanded the induction of yeshiva students into the army. In the wake of the judgment rendered by this court – which stated that the arrangements of exemptions from military service are not constitutional in that they violate the principle of equality – the Knesset passed the Deferral of Service Law and began proceedings for its gradual application to the ultra-orthodox population. As a result, an increasing number of the ultra-orthodox – albeit still low in absolute terms – have been referred for induction into the army or civilian service. The Deferral of Service Law also gives the kollel and yeshiva students the option of taking a “year of decision” in which they can examine whether they wish to continue with their Torah studies or enter the job market. During the year of decision, the ultra-orthodox may discontinue their studies and the temporary exemption from military service that was given to them will remain in place. The year of decision enables the population of ultra-orthodox yeshiva students, for the first time, to integrate into the job market without connecting it to induction into the army, as distinct from the situation that existed before enactment of the Deferral of Service Law and the limitations that were imposed on yeshiva students in the arrangement for those for whom “Torah study is their profession.” These changes integrated with growing support from the rabbis and leaders in the ultra-orthodox community for ultra-orthodox men and women going to work and acquiring a profession in the framework of higher or academic education. All this has occurred to enable ultra-orthodox families to support themselves honorably and get out of the cycle of poverty. Indeed, data from the Council for Higher Education indicates that there is a dramatic increase in the number of ultra-orthodox people studying in academic institutions. For example, some 2,000 ultra-orthodox men and women began their studies in the 5770 academic year in university extensions that were established specially for the ultra-orthodox population, which enables ultra-orthodox men and women to study a variety of subjects in separate tracks for men and women, with identical content to that which is taught at the universities, but with the appropriate emphases for the ultra-orthodox population. These and other changes are the backdrop to the adjudication of the petition before us.

  15. Before we present the positions of the parties to the petition, we deem it imperative to note that adjudication of the petition before us has continued for an extremely protracted and extraordinary period of time. The complexity of the issues that arise in the petition and their connection to other petitions that were heard before the Supreme Court have compelled a slow examination of the factual and legal frameworks relevant to the petition. Indeed, in general, it is not proper that adjudication of a petition continue for such a long period of time. However, sometimes issues reach the court, the decisions for which require preparations that are different from the ordinary, inter alia, by giving the opportunity to the various entities, including the executive authority and the legislative authority, to examine the extent of their involvement in the matter and render the judicial decision superfluous. In the petition before us, the first years were devoted to clarifying the factual framework and determining the conditions for eligibility for the income support benefits, assuming that the benefits are, indeed, paid. Afterwards, adjudication of the petition was delayed until the decisions were rendered in various petitions in the matter of deferral of military service. We believe that this wait was important and it was intended, inter alia, to enable important social and legal changes to develop at the proper pace. However, we recognize the fact that this wait impaired the legitimate expectations of the petitioners that their petition would be decided within a reasonable period of time, and we can only regret that.

    The claims of the parties

  16. The petitioners have focused the petition on the claim of violation of the principle of equality. They argue that the Budget Item violates equality and human dignity, as an item that discriminates on the basis of sex, religion and faith, nationality and education. The petitioners argue that by virtue of the Budget Item, income support benefits are paid solely to kollel students while the rest of those who belong to the same peer group – women, students in institutions of higher education, members of other religions learning in institutions that train religious clerics, and students in reform and conservative yeshivot – are not eligible for similar payments or the assurance of minimum sustenance. Additionally, the petitioners point out the differences between the conditions of eligibility under the Income Support Law and under the Budget Item. Thus, for example, the petitioners note that in contravention of the Income Support Law, kollel students are not required to prove maximization of earning capacity and they are entitled to work concomitantly with their studies in the kollel; the rate of the benefits for kollel students is not determined on the basis of estimation of the amounts required for the purpose of minimal sustenance with dignity – as set forth in the Income Support Law – but rather by division of the annual budget by the number of those eligible for the benefits that year; and in calculating the benefits, the criteria do not take into account all the income of the entitled, so that another stipend or payment given to the entitled person in the framework of his studies and in the framework of the institution in which he is studying up to a total of NIS 3,500 are not included in the calculation of the monthly income. The petitioners further claim that the payment of income support from the budget of the Ministry of Religious Affairs – now the Ministry of Education – creates a mechanism that circumvents the arrangements set forth in the Income Support Law whereby income support payments to those entitled are provided through the National Insurance Institute. Another claim raised by the petitioners is that the Budget Item contradicts Section 3A of the Foundations of Budget Law, 5745-1985, under which the state’s support of public institutions must be provided according to equality tests, specified by the appointed ministers in the fields of their ministries, and after consultation with the attorney general; and the provisions of Section 3 of the Basic Law: The State Economy, which states that the budget law is supposed to include the government’s planned and anticipated expenditures, but it cannot determine substantive preliminary arrangements. Finally, the petitioners claim that the Budget Item purports to determine a substantive arrangement in the guise of budget provisions and, therefore, it oversteps the bounds that the legislator is entitled to arrange in the annual budget law.

  17. The state’s main response is based on the claim that the distinction between kollel students and other, non-kollel students, women and members of other religions or other denominations in Judaism is based on relevant differences. The state argues that what makes the group of kollel students unique is their inner faith, which dictates the study of Torah as a daily occupation. Learning Torah, claims the state, “is not in the realm of temporary training and is not intended, as a rule, for acquisition of a profession. It involves a continuing lifestyle, without any time limitation. It is a lifestyle that compels them, due to their occupation with learning, to suffice with minimal subsistence.” The state believes that this distinction justified a separate budget item for the group of kollel students, in a manner that reflects the priorities of the government and the legislator, whereby the State of Israel chooses to provide support for kollel students. This ideological decision, according to the state, is not subject to review by the courts, but rather constitutes a policy to be decided by the legislative and executive authority.

  18. According to the state, the distinction between the groups is reflected in the different budgetary support given to each one of them. For example, while the state supports kollel students by means of the income support mechanism and other budgetary mechanisms, other students are eligible for a variety of assistance funds and loans and they benefit from subsidized tuition and from the budgets given by the state to the institutions of higher education. Therefore, the state claims, in a comparison between the two groups, all the benefits that each group receives must be taken into account, without focusing on one Budget Item.

  19. With regard to the petitioners’ claim that the budget provision is inconsistent with the Income Support Law, and particularly with the requirement to maximize earning capacity, the state notes that the arrangement set forth in the Income Support Law is not an exhaustive arrangement and that the income support provided to kollel students by virtue of the budget law is lower than that given under the Income Support Law to the those with families, and stands at 18% of the average salary in the economy. The state further argues that the purposes underlying the two arrangements are different. The Income Support Law is designed to provide a last and temporary safety net to someone who has maximized his earning capacity, while encouraging him to continue to seek a source of subsistence, while the purpose of the arrangement supporting the kollel students is to assist those who lead a lifestyle devoted to the study of the Torah.

  20. The state’s position did not change, even after judgment was rendered in the matter of the constitutionality of the Deferral of Service Law. According to the state, the ruling in the judgment regarding the deferral of military service should not be applied to the case before us. The state argues that while induction into the army imposes an obligation on most of the population – an obligation from which a person for whom Torah study is a profession is exempt – the acquisition of higher education constitutes a choice, both from the standpoint of the individual and from the standpoint of the society. The state claims that this distinction between obligation and choice affects the analysis of the extent of impairment of an individual’s autonomy and, hence, human dignity. According to this argument, where the different treatment does not entail the imposition of an extra obligation on the general population but, rather, the granting of a general benefit to a minority, the severity of impairment to the scope of the autonomy is small, if it exists at all, and therefore calling it a violation of equality that is tantamount to a violation of human dignity is unwarranted. Alternatively, the state claims that even if there is a violation of equality, the provisions of the budget law meet the conditions of the limitations clause set forth in Section 8 of the Basic Law: Human Dignity and Liberty.

  21. Respondent 7, the Movement for Fairness in Government, argued that groups whose activities are designed to promote different values cannot be included in the same peer group. The Movement for Fairness in Government claims that the group of kollel students and the group of all other students are funded by the state in accordance with their special needs; and for the purpose of examining whether the principle of equality was violated, the entirety of the allocation to which each group is entitled must be examined, without focusing on one budget item. In practice, the Movement for Fairness in Government notes that while the kollel students are eligible for income support, other groups of students receive special financial assistance in the framework of the Student Assistance Center, and a calculation of all the state investments for the student shows that the state participates in funding students at a higher cost than that which is invested in funding yeshiva students or kollel students. Alternatively, the Movement for Fairness in Government claims that even if there is a violation of equality, the fact that it involves a relatively small amount of support for a needy public should be taken into account.

  22. The Movement for Fairness in Government further claims that the Budget Item cannot be canceled by virtue of the claim that it conflicts with the Foundations of Budget Law because the option of cancellation is not expressly written in the Foundations of Budget Law, and that it is unnecessary to require deliberation, in the framework of the petition before us, on canceling income support benefits for kollel students as a means of advancing the purposes of the Deferral of Service Law before this option is deliberated by the appropriate authorities and without a comparison having been made between these means and other means.

  23. Respondents 8 and 9, two kollel students who meet the conditions of eligibility for benefits pursuant to the Budget Item, argue that a distinction should be made between students and kollel students who devote all of their energies to the study of Torah and therefore are not able to perform any kind of work. Respondents 8 and 9 also argue that the state has supported kollel students for decades and therefore compelling the legislator to change this policy will impair their reliance interest and will contravene the Basic Law: Human Dignity and Liberty, because it will strike a mortal blow to their spiritual world, their dignity and their property. Respondents 8 and 9 further emphasize the grave financial situation of the kollel students and the fact that this involves the minimal support required for basic subsistence.

    The legal framework

  24. The normative basis for payment of the benefits granted to the kollel students is, as stated, a provision in the annual budget law. Therefore, we will first discuss the normative provisions that govern the budget laws in Israel, at the core of which is the Foundations of Budget Law, 5745-1985 (hereinafter: the Foundations of Budget Law). The Foundations of Budget Law constitutes framework legislation for the annual budget laws. The law defines the types of issues presented in the annual budget laws and outlines the discretion of the government and the Knesset in determining the annual budget. We will, therefore, examine the validity of a provision in the annual budget law where it contradicts an explicit provision in the Foundations of Budget Law. The discussion itself will focus on the question of violation of the principle of equality and the state’s claim whereby there is no prohibited discrimination before us but, rather, a permissible distinction based on relevant differences. We will end the discussion with the question of the proper remedy in the circumstances of the matter, taking into account the legal and public issues that arise in the petition.

    The normative framework that governs the Budget Item

  25. 15 The normative framework for the annual budget laws is found in two main pieces of legislation: the Basic Law: The State Economy and the Foundations of Budget Law. Section 3 of the Basic Law: The State Economy outlines the basic principle whereby the state budget would be in a law, for one year, and would include the anticipated and planned government expenditures (as noted above, the state budget for 2009 and 2010 is a biennial budget, in accordance with that stated in the Basic Law: The State Budget for 2009 and 2010 (Special Provisions) (Temporary Provision), 5769-2009). The Basic Law: The State Economy delineates the main course of the work, whereby the government is entrusted with preparing the budget and laying the proposed budget on the desk of the Knesset at the time designated by the Knesset committee authorized to do so. In any case, the proposed budget will be submitted for the examination of the Knesset no later than 60 days before the fiscal year.

  26. While the Basic Law: The State Economy determines the division of labor between the government and the Knesset, the Foundations of Budget Law lays the foundation for the annual budget laws. As its name implies, the Foundations of Budget Law determines the essential foundations for each annual budget law. The Foundations of Budget Law is very detailed and includes a long list of provisions that regulate various matters pertaining to the structure of the annual budget law, the manner in which the annual budget is determined and the actions permitted in the framework of the budget. As such, the Foundations of Budget Law specifies what items are required in the annual budget law, it delineates the government’s authority to change the budget during the year, and places credit restrictions on local authorities and budgeted entities. The Foundations of Budget Law also determines special provisions regarding the defense budget and budgeted entities, and designates criminal and disciplinary sanctions against any that contravene its provisions. The Foundations of Budget Law does not deal with the decision to allocate or not to allocate funds in general and it deals “neither with shekels nor with agorot” (HCJ 7142/97 Council of Youth Movements in Israel v Minister of Education, Culture and Sports, IsrSC 52 (3) 433, 438 (1998), Justice M. Heshin. Hereinafter: the Council of Youth Movements in Israel Case). The law has one purpose: to determine the normative framework for future budget laws.

  27. The question of the relation between the Foundations of Budget Law and the annual budget law, which derives from the special nature of each one of the laws in itself and in relation to the other, was at the heart of the ruling of this court in HCJ 1438/98 Conservative Movement v Minister of Religious Affairs, IsrSC 53 (5) 337 (1999) (hereinafter: the Conservative Movement Case). The question arose during adjudication of a budget item in the budget law for 1997, which provided for government support for Torah based and ultra-orthodox culture in a manner that was found to infringe the provision in Section 3A of the Foundations of Budget Law (hereinafter: Section 3A or the Section). Section 3A states that government expenditures for the purpose of supporting public institutions must be set forth in the budget law as a comprehensive amount for each type of public institution, and will be distributed among the relevant institutions according to egalitarian criteria. In his judgment in that case, Judge Y. Zamir examined the relationship between the Foundations of Budget Law and the annual budget law, and ruled that even though it involved two pieces of legislation in the same “square” in the pyramid of norms, they are not on the same “tier.” In the opinion of Justice Zamir – an opinion with which I concurred in that judgment – a “unique situation” (ibid., at p. 357) exists between the budget law and the Foundations of Budget Law, in which the annual budget law is substantively subordinate to the Foundations of Budget Law (ibid., at p. 355). Justice Zamir stated as follows (ibid., at p. 357):

    It can be argued that the Foundations of Budget Law and the annual budget law are not on the same tier in the pyramid of norms. Indeed, both of them are located in the pyramid in the same square, which is the square of laws, beneath the square of basic laws and above the square of secondary legislation. However, even norms that are situated in the same square are not necessarily on the same tier. Within each square on the pyramid of norms there are tiers. Thus, for example, in the basic laws there are ordinary provisions and there are ironclad provisions, and in secondary legislation there are regulations (which are sometimes called orders) that are issued by virtue of regulations, and therefore they are subordinate to the regulations. Similarly, we cannot rule out the possibility that in square of laws there will also be a law above a law.

    Justice Zamir based his approach, whereby the annual budget law is substantively subordinate to the Foundations of Budget Law, on the special nature of the budget law. Justice Zamir wrote (ibid., at p. 356):

    An annual budget law, notwithstanding the fact that it is officially a law, is not a law in substantive terms and, in any case, is not an ordinary law from that standpoint. A law, from a substantive standpoint, determines a general norm. An annual budget law does not determine a general norm. It grants, alongside the expenditures, permission to the government, on behalf of the Knesset, to expend a certain amount of money for the purpose of a certain action in a certain year, such as expending a certain amount of money to support institutions of a certain type. From this standpoint, it is more like an administrative act than a piece of legislation.

    Justice Zamir also addressed, inter alia, the fact that the budget law is passed in a special “summary” procedure, in which “the annual draft budget is not distributed to the public as a draft law memorandum by the Ministry of Justice, nor is it published in a blue paper with the other bills, for the information of the public and for public debate, and it does not undergo a full first reading, as is customary with ordinary bills” (ibid., at pp. 356-357). Justice Zamir further stated that by their nature, the provisions of the Foundations of Budget Law are designed to apply in a binding manner to the annual budget laws. For example, Justice Zamir referred in his judgment to the provisions of the Arrangements in the State Economy Law (Legislative Amendments), 5752-1992 which, in Section 1 (A) enacts Section 3A of the Foundations of Budget Law and which states in Section 1 (B) that “Subsection (A) shall apply to the amounts of the expenditure in the budget for the 1992 fiscal year and thereafter” (emphasis added, D.B.). If an annual budget law can ignore the provisions of Section 3A of the Foundations of Budget Law, ruled Justice Zamir, “then the Foundations of Budget Law and the principle of equality in distributing support [funding] are liable to remain an empty vessel. If that is the case, what good did it do?” (ibid., at p. 357).

  28. Justice M. Heshin, who concurred with the decision in the finding in the Conservative Movement Case and the reasoning that established it, added that the purpose of the Foundations of Budget Law directly influences “the interpretation, the inner power arising therefrom and the areas to which it extends” (ibid., at pp. 382-383). As a law that is supposed to be a law “in perpetuity” and whose purpose is to assemble “the genetic code of every annual budget law,” Justice Heshin ruled that the Foundations of Budget Law is likely to prevail over an item in an annual budget law that deviates from its provisions. Justice Heshin added that his position whereby the Foundations of Budget Law prevails over a conflicting provision in the annual budget law applies where the conflict is implied. According to Justice Heshin, “If a provision in an annual budget law implicitly conflicts with any provision of the Foundations of Budget Law, the Knesset must presume that there was no intention to grant it validity and it is invalid" (ibid., at p. 388). However, Justice Heshin added that in his opinion, the Knesset is authorized to pass legislation contrary to the Foundations of Budget Law, but only if it does so explicitly (ibid.).

  29. The court further noted that the significance arising from the supremacy of the Foundations of Budget Law over the annual budget laws is that the court is authorized to nullify an item in an annual budget law if it conflicts with the provisions of the Foundations of Budget Law. The possibility of the nullification did not have to be decided in the judgment and therefore it remained in need of examination (for criticism on the court’s rulings in the Conservative Movement Case, see Suzy Navot, “Comment on the normative status of the budget laws,” Hamishpat 6 123 (2001)).

  30. As we, indeed, determined, in the Conservative Movement Case, the Foundations of Budget Law and the provisions set forth therein apply to every annual budget law. The two laws – the Foundations of Budget Law on the one hand and the annual budget law on the other hand – create a kind of microcosm that deals with the manner of allocating state resources and the use of those allocations. One law delineates the main provisions pertaining to the principles for determining the budget and the other law carries them out each year. This conclusion arises from both the special nature of the Foundations of Budget Law as a law designed to regulate and delineate the legislative procedure and the content of the annual budget laws, and from the nature of the annual budget law which deals mainly with authorizations for budgetary actions.

  31. The Foundations of Budget Law constitutes a type of substantive ironclad provision that applies to the annual budget laws, and it was legislated in an effort to tighten supervision of the budget (see Dafna Barak-Erez, “Enforcement of the state budget and the administrative contracts,” Hamishpat A 253, 254 (1993)). This can be deduced from both the provisions of the law itself and from the circumstances in which it was passed. An examination of the provisions of the Foundations of Budget Law shows that the law has two main objectives. One is to regulate the normative framework for the budget laws and to ensure that the annual budget laws that are passed from the date of legislation of the Foundations of Budget Law and thereafter are legislated in accordance with a series of provisions. The other is to increase the supervision on the allocation and use of the annual budget of corporations, local authorities and other supported entities.

  32. The Foundations of Budget Law is an example of what is called “framework legislation” in the comparative literature. Framework legislation is a general name for laws that structure the manner of legislating laws in the field of the subject matter that they regulate. For the most part, the framework legislation contains provisions pertaining to the manner of voting and deliberation in the legislature during the voting on the relevant legislation for the framework legislation and, sometimes, as in the Foundations of Budget Law, it also contains a provision pertaining to the content of the legislation (for a discussion on framework legislation, see Elizabeth Garrett, “The Purposes of Framework Legislation”, 14 J. Contemp. Legal Issues 717, 718 (2005); hereinafter: Framework Legislation). Laws such as the Foundations of Budget Law, which regulate the legislation of annual budget laws, are considered prototypes of Framework Legislation (see, e.g., the words of Garrett, ibid., p. 723: “The congressional budget process is the prototypical framework law.”). Framework Legislation, as presented by Garrett in her aforementioned article, has several goals. They enable recurring problems to be addressed in principle; they determine neutral procedures that will establish the legislative procedures of future laws; they provide a solution to various problems arising from the need to coordinate between various entities responsible for making decisions (for example, among several Knesset committees or among entities in various government ministries); and they define broad general goals in a manner that ensures that future legislation will be consistent with those goals (see Framework Legislation, p. 733).

  33. The Foundations of Budget Law, as Framework Legislation for the annual budget laws, contains various provisions designed to regulate future budgetary legislation, both at the level relating to the legislative procedure of the annual budget laws and at the level relating to the content of the annual budget laws. Some of the provisions in the Foundations of Budget Law are of a procedural nature, which deal with the scope of details that must be included in an annual budget law. Thus, for example, section 2 delineates the structure of the annual budget law and specifies the types of budgets that must appear therein; section 4 regulates the manner of utilizing receipts that were received in excess of the projected receipts and loans for the fiscal year; Chapters D-E include various provisions in connection with corporations, local authorities and religious councils; and section 33 states that a budgeted entity and a supported entity are required to provide the director general of the Ministry of Finance with any information that is necessary for the purpose of monitoring implementation of the Foundations of Budget Law or the annual budget law. Alongside these provisions, the Foundations of Budget Law sets forth provisions of a substantive nature. Section 3A of the Foundations of Budget Law, which is the section relevant to the petition before us and which we will discuss in detail below, is an example of such a provision and its applicable subject matter of the principle of equality in distributing state funding to public institutions. Section 3A also demonstrates the manner in which Framework Legislation provides a response to a recurring problem that preceded it – in this case, the problem of the "earmarked funds" that the legislator wished to eliminate upon the addition of Section 3A to the Foundations of Budget Law.

  34. Alongside the position of the Foundations of Budget Law as a law that was designed to form the basis of the annual budget laws, is the unique nature of the annual budget law. The budget law, as its name indicates, is a law passed by the Knesset, although the hearing thereof, like its content, differs from the ordinary with regard to other primary legislation. Section 131 of the Knesset regulations, which is entitled “Special Hearing Procedures,” states that “In a hearing on the state budget, and in other exceptional cases, the Knesset committee may determine special hearing procedures.” The annual budget proposal, which the government is required to submit to the Knesset no later than 60 days before the fiscal year, is not distributed as a draft law memorandum by the Ministry of Justice, it is not published like any other bill, and it does not go through a full first reading (see: Amnon Rubinstein and Barak Medina, The Constitutional Law of the State of Israel: Government Authorities and Citizenship, Vol. B 898 (2005)).

  35. However, not only the hearing procedures differentiate the annual budget law from other primary legislation. From a substantive standpoint, it also cannot be said that the budget law is like any other law that is passed by the Knesset. Basically, the budget law is a law that gives the government authorization for an action. The law is essentially composed of many sections that specify the amount of the allocation for various actions in government ministries in accordance with the economic policy determined by the government. For the most part, the budget law does not contain a substantive normative dimension or norms that determine enforceable permitted and prohibited behavior. The budget law is, in effect, a framework of the government’s actions which require, in our governmental structure, the approval of the Knesset for the expenditures it needs to perform its ongoing activities and to implement its policy. The budget law is also limited in scope – as a rule, it is valid for one year only (or for two years, such as this year, in the case of a biennial budget law), and the budgetary provisions set forth therein grant the government permission to expend monies for certain purposes or to engage in monetary undertakings, but they do not impose an obligation on the government to expend these monies; under Section 3 of the Foundations of Budget Law, the government is entitled, in a particular fiscal year, to expend the amount specified as an expense in the budget law, but it is not obligated to do so.

  36. The Israeli courts have recognized the special nature of the budget law. Thus, for example, Justice Y. Zussman characterized the annual budget law in Criminal Appeal 213/56 Attorney General v Alexandrovich, IsrSC 11 695, 698 (1957):

    .... Such a law, which is, indeed, a law in form, but not in substance, is the state budget: it does not contain any norm aimed at the citizens of the state. Nevertheless, due to the importance of the matter, the budget is determined by the Knesset in the form of a law, provided that its determination is not in the hands of the executive authority. But this does not change the nature of things: it involves an administrative matter implemented by the legislating authority and made in the form of a law.

    Similarly, Justice M. Heshin ruled that “an annual budget law contains many thousands of details and, in essence, it is no more than a collection of items of authorization for expenditure (the Conservative Movement Case, at p. 387). It was further stated that the annual budget laws are “singular and special laws, different from all other laws, and their unique characteristics automatically require a special manner of handling them (HCJ 240/98 Adalah – The Legal Center for Arab Minority Rights in Israel v Minister of Religious Affairs, IsrSC 52 (5) 167, 189 (1998); hereinafter the Adalah Case).

  37. The budget laws are of a special nature, not only in the parliamentary system of Israel, but also in other countries which have similar democratic systems. In those countries as well, the budget constitutes parliamentary approval for the actions of the executive authority. See, for the sake of comparison, William Eskridge Jr. and John Ferejohn, Super-Statutes, 50 Duke L. JU. 1215 (2001) on the status of the budget laws in American Law:

    Appropriations laws perform important public functions, but they are usually short-sighted and have little effect on the law beyond the years for which they apportion public monies.

  38. Similarly, see, with regard to the budget laws in Germany, Thomas Knorzer, The Budget System of the Federal Republic of Germany (Bundesministerium der Finanzen, 2008, p. 8) (hereinafter: Budget System of the Federal Republic of Germany):

    The budget is a systematically classified presentation of the expenditure estimated for the fiscal year and the revenue intended to cover it. The budget provides the basis for the government’s budget and economic management. It authorizes the administration to effect expenditure and to incur liabilities. The budget in itself neither establishes nor terminates any claims or liabilities. This can be done only by force of law. As the budget confers only an authorization, government is not legally required to actually effect any expenditure that has been included in the budget.

    In Germany, while the budget laws are laws to all intents and purposes, the constitution restricts their content. Under Article 110 (4) of the Basic Law, the budget laws can include:

    .... only such provisions as apply to the revenue and expenditure of the Federation and to the period for which the Budget Statute is being enacted.

    Moreover, the German law subordinates the annual budget law to other budgetary legislation in the same manner that the annual budget law is subordinate to the Foundations of Budget Law. In Germany, the budgetary legislative system creates an extremely clear hierarchy. At the top of the pyramid stand the provisions of Chapter X of the Basic Law, which deal with state budget (which include the aforementioned Article 110 (4)). Below the Basic Law is the Budgetary Principles Act of 1969, that was legislated as part of a reform of the German budgetary system, which was passed that year. The Budgetary Principles Act of 1969 specifies the principles for budget legislation that apply to both the federation and to the states. Beneath the Budgetary Principles Act are the Federal and State Budgetary Acts of 1969-1971 and beneath them are municipal laws and federal and municipal regulations (see Klaus Luder, Government Budgeting and Accounting Reform in Germany in Models of Public Budgeting and Accounting Reform, OECD Journal on Budgeting, Volume 2, Supplement 1, p. 228). In Germany, the budget laws cannot change the provisions set forth in the Budgetary Principles Act, which, similar to the Israeli Foundations of Budget Law, delineate provisions and principles whereby the Federation and the states are obligated to legislate the annual budget laws (for a review of the provisions that delineate the main principles in German budget legislation, see Budget System of the Federal Republic of Germany, pp. 8-9).

  39. It appears, therefore, that the budget law – in Israel as in other countries around the world – is passed by the primary legislator, but that is not to say that its status is that of every other law, particularly on the backdrop of other legislation that regulates the matters which appear in annual budget laws, such as the Foundations of Budget Law. The budget law is a unique law, and its unique characteristics, both from the standpoint of the procedures in the process of its legislation and from the standpoint of the scope and type of matters that it regulates, have several ramifications. First, as we ruled in the Conservative Movement Case, the annual budget law is subordinate to the Foundations of Budget Law. Certainly, in the normal course of events, no similar relationship exists between any two pieces of legislation since, in general, laws – except for the subordination of ordinary legislation to Basic Laws – are situated on the same tier in the pyramid of norms, and no one law can lead to the nullification of articles in another law. From this arises the basic rule in our legal system whereby a provision in a later law prevails over a provision in an earlier law, provided that the two provisions are of equivalent status. Underlying this rule is the principle of the legislator’s sovereignty and his goal of preventing the fettering of the future legislator and giving the Knesset the option of deviating from the provisions and from the legislation of a prior Knesset. However, alongside this important rule there are exceptions, such as the rules of the choice of law, which deals with regulating conflicts between various pieces of legislation. The exceptions are also joined by the special relationship that exists between the Foundations of Budget Law and the annual budget law, stemming from the material dealt with by the two laws and the unique nature of each one of them.

  40. The hierarchy between the Foundations of Budget Law and the annual budget law lead to the conclusion that the Knesset and the government, in preparing the annual budget, are obligated to ascertain that its provisions are compatible with the provisions set forth in the Foundations of Budget Law. The ineluctable result of this is that, in general, a provision in the annual budget law that conflicts with a provision in the Foundations of Budget Law cannot stand. However, due to the nature of the annual budget law, judicial review, which is designed to examine the budget law at the constitutional level against the Basic Laws and in the framework of its subordination to the Foundations of Budget Law, will be, by its nature, restrained and limited. The budget law reflects the policy of the government and the ideological and substantive choices made by the Knesset which are implemented by way of the allocation of resources. Determining the economic policy of the state is one of the basic and fundamental powers of the government and the Knesset, and the court will refrain from interfering therein in the framework of its review, unless the violation of basic rights – as reflected in the budget – is significant and severe. Indeed, in a series of decisions, this court has determined a rule of caution and restraint in intervention in the economic policy determined by the legislator. Thus, for example, in HCJ 4769/95 Menachem v Minister of Transport, IsrSC 57(1) 235, 263-264 (2002) (hereinafter the Menachem Case), it was ruled that in judicial review of the economy, which entails far-reaching social and economic aspects, the court would act with judicial restraint. The judgment stated that with regard to the economy, “There may often be several possible goals and modes of operation; deciding between them is based more than once on an assessment that harbors uncertainty and it involves professional forecasts and considerations that are not always within the sphere of the court’s expertise.” Therefore, the judgment stated, “the authority in charge of the economic policy – the executive authority and the legislative authority – must be given a broad field of choice as the ones who determine the overall policy and bear the public and national responsibility for the state economy.” See also the words of President A. Barak in HCJ 1715/97 Israel Investment Managers Association, IsrSC 51 (4) 367, 389 (1997) (hereinafter: Israel Investment Managers Association Case):

    Especially in the realm of the economy there may often be several modes of action; there are several options open to the government authorities; the decision is based on an assessment in which a great deal of uncertainty is inherent. The tools and devices for ‘understanding the subtleties and differences in the proportionality between the various possibilities’ are often lacking ....

    Generally, the legislative means are characterized by the existence of a variety of actions and a mix of means, whose comprehensive effect must be examined and tested. All these lead to the conclusion that the court will not turn itself into an economic super-authority, which examines the justification for the economic options that were chosen. The court will fulfill its classic role of judicial review of government activities.

  41. To these considerations we must add that the budget law is structured so that the various budget items are connected to one another and it may be that the cancellation of one budgetary provision will affect other provisions in such manner that the court does not have the tools to examine the scope of its ramifications (see, in this context, the words of Justice M. Heshin in the Adalah Case, p. 190). We must also consider the character and the nature of the impact. In this matter, it should be noted that the Foundations of Budget Law contains a long series of provisions, some substantive, which were designed to ensure the protection of basic rights, and some of a more technical nature. Therefore, it may be that not every deviation from the provisions of the Foundations of Budget Law would justify canceling an item in the annual budget law, but rather only a deviation from those provisions that reflect basic rights and principles. I see no need to determine in advance, in this petition, which provisions will lead to the nullification of budget items in the budget law, and which will not. The decision in each case is affected by the reasoning underlying the relevant provision in the Foundations of Budget Law, by the nature of the deviation between the provision in the Foundations of Budget Law and the annual budget law, and by the importance of the right that was violated, the severity of the violation and its duration. At this time, the questions can remain in need of examination and can be deliberated in the future if the need to do so should arise.

  42. Above and beyond the necessary, it should be noted that the petition before us raises another question pertaining to the conflict between the annual budget law and prior substantive legislation. In this case, the question arises in view of the existing conflict between the provisions of the Income Support Law – whereby groups of students, among them kollel students, are not eligible for income support payments – and the Budget Item, whereby income support benefits are paid to kollel students. The question in this context pertains to the possibility of deviating from and, unfortunately, of changing prior substantive legislation by means of a budget allocation in the annual budget law. Similar questions were deliberated extensively in the United States. In a series of judgments, the American courts, headed by the federal Supreme Court, ruled that where a budget law conflicts with other substantive legislation, it can be deemed an implicit change of the substantive law. The Supreme Court ruled that the change of substantive legislation in an annual budget law is possible only where Congress expressed its desire explicitly and unequivocally and, even then, the court will be prepared to recognize the legality of the explicit change for one year only. In the leading judgment on this issue, Tennessee Valley Auth. v Hill, 437 U.S. 153 (1978), the court ruled:

    The doctrine disfavoring repeals by implication applies with full vigor when .... the subsequent legislation is an appropriations measure.' Committee for Nuclear Responsibility v Seaborg, 463 F.2d 783, 785 (1971) (emphasis added); Environmental Defense Fund v Froehlke, 473 F.2d 346, 355 (CA8 1972). This is perhaps an understatement since it would be more accurate to say that the policy applies with even greater force when the claimed repeal rests solely on an Appropriations Act. We recognize that both substantive enactments and appropriations measures are 'Acts of Congress,' but the latter have the limited and specific purpose of providing funds for authorized programs. When voting on appropriations measures, legislators are entitled to assume that the funds will be devoted to purposes which are lawful and not for any purpose forbidden. Without such an assurance, every appropriations measure would be pregnant with prospects of altering substantive legislation, repealing by implication any prior statute which might prohibit the expenditure. Not only would this lead to the absurd result of requiring Members to review exhaustively the background of every authorization before voting on an appropriation, but it would flout the very rules the Congress carefully adopted to avoid this need” Tennessee Valley Autho. 437 U.S. at 190-191 (emphasis in the original, D.B.; see also Robertson v Seattle Audubon Society, 503 U.S. 429 (1992)).

  43. The congressional rules to which the court related also contain House Rule XXI (2) which places a restriction on changes to prior substantive legislation in the framework of a budget law and states that:

    No appropriation shall be reported in any general appropriation bill, or be in order as an amendment thereto, for any expenditure not previously authorized by law, unless in continuation of appropriations for such public works as are already in progress. Nor shall any provision in any such bill or amendment thereto changing existing law be in order.

    [emphasis added, D.B.]

  44. Underlying the United States Supreme Court ruling is the premise that the extensive scope of the matters regulated by an annual budget law and the manner of the technical presentation of the budgetary authorizations provided in the budget, make it very difficult to understand the matters that are regulated within the realm of the budget and do not enable the legislators, in practice, to know fully and comprehensively what matters are included in the budget. In those circumstances, it is hard to say that members of the legislative body, when they vote on the annual budget, are aware of each and every item, and give their consent to an implicit change of prior substantive legislation (in this context, see the words of the Ohio federal court in the matter of Planned Parenthood Affiliates of Ohio et al. v Rhodes et al., 477 F. Supp. 529 (S.D. Ohio, 1979)).

  45. The approach of the United States Supreme Court raises interesting questions with regard to the scope of the matters that can be regulated in the annual budget law, including the possibility of changing – explicitly or implicitly – prior legislation by means of a provision in the annual budget law. The decision on these questions is not required in the petition before us, and, therefore, they will remain at this time in need of examination.

    From the general to the specific

  46. Our discussion to this point has focused on the normative framework that governs the annual budget laws. We have found that the budget laws have unique characteristics. We have also determined that the budget law is subject to the Foundations of Budget Law in a manner that requires budget allocations in the annual budget law to conform to the provisions of the Foundations of Budget Law. The continued discussion below will focus on the question of whether the Budget Item contained in the budget laws since 1982 violates the principle of equality, which is a basic principle in the Israeli legal system, which found expression in provision 3A of the Foundations of Budget Law. In the petition before us the question arises of the interpretation of Section 3A, and the significance arising from the need to subordinate an annual budget law to the equality provision that is set forth, inter alia, in Section 3A. We will now address these questions.

    Section 3A of the Foundations of Budget Law

  47. Section 3A was added to the Foundations of Budget Law in 1992 in the Regulations in the State Economy (Legislative Amendments) Law (No. 3), 5752-1991. The relevant parts of the Section state as follows:

    3A.

    (Amend

    ment 12) 5732-1992

    Support of Public Institutions

    (a)

    In this section –

    “Public Institution” – An entity that is not one of the government institutions, which operates for the purpose of education, culture, religion, science, art, welfare, health, sports or a similar purpose;

    “Budget Item” – An item in an annual budget law that determines the expenditures of a government ministry.

    (b)

    An annual budget law shall determine the government’s expenditures for the purpose of supporting Public Institutions.

    (c)

    The government’s expenditures for the purpose of supporting Public Institutions shall be determined in every budget item in a comprehensive amount for each type of Public Institution.

    (d)

    The amount set forth in a Budget Item for a type of Public Institution shall be divided among Public Institutions of the same type pursuant to equality tests.

    (e)

    The supervisor of the Budget Item shall formulate, in consultation with the attorney general, equality tests for dividing the amount determined in that Budget Item for the purpose of supporting Public Institutions (hereinafter – the Tests).

    (f)

    The Minister of Finance shall formulate, in consultation with the attorney general, a procedure whereby applications by Public Institutions to receive support from the state budget shall be submitted and considered (hereinafter – the Procedure).

    (g)

    The tests and the procedure shall be published in the Official Gazette of the Government of Israel.

    (h)

    No amount set forth in the annual budget law shall be expended for the purpose of supporting a Public Institution unless it is incorporated and fulfills the provisions of the procedure, and to the extent consistent with the Tests.

  48. Section 3A delineates the state support of public institutions, and specifies that government expenditures for the purpose of supporting public institutions will be determined as a comprehensive amount for each type of public institution, and will be distributed among the relevant institutions pursuant to the equality tests. The purpose of the section was to eradicate the problem of earmarked funds which was widespread prior to enactment of Section 3A. According to the method of earmarked funds, the Knesset would distribute state funding to various institutions without known and predetermined equality criteria. Pursuant to that practice, in accordance with coalition agreements that were signed among various Knesset factions, a support item was specified in the budget law, which detailed the names of the supported entities and the amount of the annual support. Both the supported entities and the amount of the annual support were determined arbitrarily and without open and egalitarian criteria (see: Amnon de Hartouch, “State Support for Public Institutions – “The Blossoming of Earmarked Funds,” Mishpatim 29 75, 82 (1992)). In the wake of widespread public condemnation and the criticism voiced by this court regarding the issue of the earmarked funds (see, e.g., HCJ 780/83 Yeshivat Tomchei Temimim Merkazit v State of Israel (unpublished 19.4.1984); Misc. Motions 166/84 Yeshivat Tomchei Temimim v State of Israel, IsrSC 38 (2) 273 (1984); see also: HCJ 59/88 MK Yair Tzaban v Minister of Finance, IsrSC 35 (1) 421 (1989) (hereinafter: the Tzaban Case), the legislator amended the Foundations of Budget Law by adding Section 3A, which contained a norm of equality in state funding, by establishing that the amount of the support in each annual budget law would be determined comprehensively for each type of public institution and would be distributed among the appropriate institutions according to equality tests. As with the Foundations of Budget Law in its entirety, Section 3A is designed to apply to every annual budget law and, in that framework, to every state grant: “The essence of the provision in Section 3A is to establish the equality norm as the basic norm – the supreme norm, if you will – to all the support grants that the state is supposed to grant in these and other areas of life” (Council of Youth Movements in Israel, p. 438, Justice M. Heshin).

  49. Section 3A was added to the Foundations of Budget Law after a stormy debate in the Knesset and after various government ministries and this court dealt with the issue. See, e.g., the words of Justice M. Heshin in HCJ 8569/96 Federation of Working and Studying Youth v Minister of Education, Culture and Sports, IsrSC 52 (1) 597, 600 (1998): “And once again we are required to decide the question of financial support that the state is supposed to provide – or not provide – to this or that public entity. I say ‘and again’ because the petitions on the issue of the support funds follow one another, and we must bear the burden of deliberating, considering and deciding”; see also the words of Justice Y. Zamir in HCJ 3792/95 National Youth Theater v Minister of Science and Arts IsrSC 51 (4) 259, 262 (1997) (hereinafter: National Youth Theater): “This petition raises, yet again, the problems entailed in distributing support to public institutions from state funds.” The innovation in Section 3A is that it prohibits the provision of support funds in the framework of the state budget to certain organizations and institutions chosen surreptitiously by Knesset members, in accordance with coalition agreements and waivers, and not in accordance with open and egalitarian criteria. Section 3A expressly states that instead of specifying the names of the supported entities in the annual budget law, an annual amount of support will be determined for each type of public institution, which will be distributed among the public institutions of that type, according to equality tests. The goal underlying Section 3A was to prevent a situation in which, in the words of Justice Y. Zamir, “The annual state budget became, knowingly and openly, a device for distributing state monies, as though they were the election booty in a way that discriminated against good institutions worthy of support, only because they were not close to the throne” (the Conservative Movement Case, p. 344).

  50. As worded, Section 3A is designed to apply to support for public institutions. “A public institution” is defined in Section 3A(a) as “An entity that is not one of the government institutions, which operates for the purpose of education, culture, religion, science, art, welfare, health, sports or a similar purpose.” The question before us is whether Section 3A also applies to income support payments to kollel students by virtue of the Budget Item, since these payments are not given to what is clearly a “public institution,” but rather to kollel students who meet the conditions of eligibility.

  51. The question of the possibility of applying the provisions of Section 3A to support for individuals has arisen in the past. In the judgment in HCJ 1/98 Kabel v Prime Minister of Israel, IsrSC 53 (2) 241 (1999), the legality of guidelines for determining eligibility for public housing assistance was examined. While the guidelines were formulated in a comprehensive manner, the court found that, in practice, they were guidelines that were made solely for the sake of appearance, since they are intended for a specific population group and therefore constituted a unique grant. Those who met the conditions of eligibility according to the guidelines were not public institutions, but rather private individuals who, because of their financial situation (and their meeting additional conditions), were found to be eligible for the assistance. According to Justice M. Heshin, the court addressed the question of the applicability of Section 3A to support for individuals, and stated (ibid., p. 263):

    In this matter, we will now comment that the provision in Section 3A of the Foundations of Budget Law does, indeed, deal with support funds which the state grants to public institutions (as the concept “public institution” is defined in Section 3A (a)) and, in any case, it does not apply to this case, however, the analogy between them is self-evident, not only for the reason that, in both cases, we are talking about benefits that are granted from the state budget, benefits that are granted without a substantive law that establishes guidelines for granting them. Indeed, it would be advisable for the authorities – and for the attorney general – to also apply the spirit and the wording of the provisions of Section 3A, mutatis mutandis, to financial benefits that are not given only to public institutions.

  52. These words are appropriate to this case. Indeed, Section 3A was not enacted in a vacuum. State support for individuals and public institutions preceded the enactment of Section 3A, and this court, in examining the legality of this support, reiterated the principle that has existed in our law from time immemorial, whereby state funding must be given equally and with the establishment of clear, egalitarian and overt criteria. See, e.g., the words of (then) Justice A. Barak in the Tzaban Case (pp. 706-707), which preceded the enactment of Section 3A:

    Budget funds are state funds. The government authorities that are authorized to utilize them are not entitled to do with them as they please. The government authorities are the public trustees and the expenditure and distribution of these funds must be implemented in a way that is consistent with that trusteeship. In terms of substance, this requires persuasion, that the goal for which the funds are intended is a goal that the state is interested in supporting. The support must be implemented according to principles of reasonableness and equality .... and with practical considerations .... the financial support must be implemented “according to clear, practical and egalitarian criteria.” In terms of form, clear and overt criteria must be determined, whereby a decision will be made with regard to the financial support while establishing control mechanisms to ensure that the funds are serving their purpose. Only in this manner will the support be given in a way that is consistent with the trusteeship obligation of the government. Only in this manner will the public trust be assured that the state funding is given according to considerations of the issue and not the considerations of interested parties.

  53. The obligation to distribute state funding in an egalitarian manner exists, as stated, independent of Section 3A, and the courts imposed this obligation before the section was enacted and after it was enacted. In that spirit, Justice Y. Zamir noted in HCJ 1113/99 Adalah – The Legal Center for Arab Minority Rights in Israel v Minister of Religious Affairs, IsrSC 54 (2) 164, 172 (2000); hereinafter the Adalah – The Legal Center for Arab Minority Rights in Israel Case), that:

    The principle of equality in allocating state budget funds is not limited to the provision of support to public institutions, as set forth in Section 3A of the Foundations of Budget Law, but rather, it also applies, even without a law that expressly establishes this, to the allocation of funds from the state budget in another manner and for other needs.

  54. The clear advantage of Section 3A does not necessarily lie in declaring the obligation to act with equality – an obligation that also existed, as stated, before the section was enacted – but, rather, by the fact that it established an orderly mechanism for providing state funding in the state budget, and for distributing that support among the appropriate institutions. Indeed, notwithstanding the fact that the wording of Section 3A is directed at state funding that is provided to public institutions, the principle established therein is far broader – the obligation to act with equality in distributing state resources in the state budget. Section 3A was designed to ensure that distribution of the support funds in the state budget “shall be implemented overtly, and the principle of equality is what shall guide us. The principle of equality is the backbone, and without it, there can be no support” (HCJ 5290/97 Ezra – National Haredi Youth Movement in the Land of Israel v Minister of Religious Affairs IsrSC 51 (5) 410, 414 (1997), Justice M. Heshin). Underlying Section 3A, as noted above, was the desire to eradicate the exclusive financial phenomenon and to ensure that state funding would be given according to egalitarian criteria, and not as a result of one coalition agreement or another. In this context, the words of Justice Y. Zamir, in the Adalah – The Legal Center for Arab Minority Rights in Israel Case, are relevant:

    The principle of equality obligates every public entity in the state. First of all, it obligates the state itself. The principle of equality applies to all the areas in which the state operates. It applies, first and foremost, to the allocation of state resources. The resources of the state, whether land or money, and other resources, belong to all the citizens, and all the citizens are entitled to benefit from them pursuant to the principle of equality, without discrimination based on religion, race, sex or any other prohibited consideration.

    The principle of equality must also guide the legislative authority, which, like any other authority in the state, must act as a trustee of the public, in view of the basic values of the State of Israel as a Jewish and democratic state, one of which is equality. That is the case with each and every law, and that is also the case with the budget law.

  55. While the Budget Item, by virtue of which income support benefits are paid to kollel students, is not aimed at public institutions, it is an example of the support model to which Section 3A relates and to which the principle of equality, underlying Section 3A, is intended to apply. While the Budget Item does not bear the title “Earmarked Funds,” a precise examination of the procedures for passing it and for distributing the support thereunder leave no doubt that it involves the same old thing in a different guise. The Budgetary Item was added to the budget law in 1982 following a coalition agreement which endeavored to ensure payment of the income support benefits to kollel students, notwithstanding that stated in the Income Support Law, which went into effect that same year. As stated, the Income Support Law explicitly established – by means of the regulations promulgated thereunder – that kollel students (like students in institutions of higher education) are not eligible for income support payments. By inserting the Budget Item into the annual budget law, the provisions of the Income Support Law were circumvented in a way that benefited only certain population groups. In actuality, the individual arrangement, which ensures payments of income support benefits to a particular defined group of people, in accordance with a coalition agreement, and not pursuant to – and even in contravention of – an explicit law that prohibits the provision of funds of this type to various populations, including kollel students, is basically an arrangement of earmarked funds, even if they are camouflaged. Indeed, in the state’s response to the petition, it was explicitly argued that “The arrangement for support of yeshiva students began even before the Income Support Law went into effect – as a welfare payment – and the parties involved in the matter agreed that this arrangement would not be impaired as a result of the Income Support Law” (supplementary argument on behalf of respondents 1-6, April 21, 2005, p. 16; emphasis added, D.B.). What does this involve? An agreement between “the parties involved in the matter” to utilize the name of a particular group in the budget law, and to give it state funding and grants for the purpose of distribution to individuals without the authorization of the primary law and notwithstanding the provisions of a law that rules out payment of a benefit to that group. That, in essence, is the definition of earmarked funds, the distribution of which the legislator wished to prevent by means of Section 3A, even if the funds are transferred to private individuals and not to institutions (see the Conservative Movement Case, p. 343).

  56. Additional support for the position whereby the Budget Item constitutes a type of earmarked funds is found in the fact that the criteria for distributing an income support benefit by virtue of the Budget Item are not published. This court, in HCJ 6741/99 Yekutieli v Minister of the Interior, IsrSC 55 (3) 673 (2001) (hereinafter: Yekutieli), addressed the problem arising from the absence of criteria for determining eligibility, and noted (ibid., p. 692, Justice M. Heshin):

    Who are those who are eligible for the payment of minimum income support from the Ministry of Religious Affairs? What are the criteria utilized by the Ministry of Religious Affairs when it determines that someone is eligible for minimum income support? Do the criteria change from time to time? Who determines those criteria? In vain an answer to these questions was sought in the regulations – these and questions deriving from them. The solution to these questions was a mystery to us.

  57. Only after the petition was filed did the state begin to formulate criteria for determining eligibility for income support benefits by virtue of the Budget Item. During adjudication of the petition, the petitioners attempted several times to receive an update on the procedures for determining the criteria, and they applied to the state to receive a copy of the recommendations of the various committees, but their request was denied. Even after the criteria were established, the state refused to submit a copy of the criteria for the perusal of the petitioners and the court, and only in 2005, some two decades after commencement of payment of the benefit, did the state provide the parties with the criteria.

    The principle of equality

  58. Once we determined that the principle established in Section 3A applies to the support for kollel students, if not simply and directly, then in spirit and in accordance with the rationale underlying it, the question arises as to whether the Budget Item fulfills the obligation of equality.

  59. Much has already been written about the principle of equality and its pivotal position in our law (see, e.g., Yitzchak Zamir and Moshe Sobel “Equality Before the Law,” Mishpat Umimshal 5 165 (1999); HCJ 869/92 Zvili v Chairman of the Central Elections Committee for the Thirteenth Knesset, IsrSC 46 (2) 692, 707 (1992); HCJ 1703/92 C.A.L. Cargo Airlines Ltd. v Prime Minister, IsrSC 52 (4) 193, 229 (1998); hereinafter: C.A.L. Cargo Airlines Ltd.). In the past, it was said that the principle of equality was analogous to “the life’s breath of our entire constitutional government” (HCJ 98/69 Bergman v Minister of Finance et al., IsrSC 23 (1) 693, 699 (1969), Justice M. Landau), and, recently, the principle was established constitutionally in the judgment in the Tal Law Case. The court ruled that, in accordance with the model established there, the right to equality is part of human dignity and, as such, it enjoys constitutional protection that supersedes the law.

  60. The obligation to act with equality means giving equal treatment to equals, and different treatment to those who are different (see HCJ4541/94 Alice Miller v Minister of Defense, IsrSC 49 (4) 94, 110-111 (1995); HCJ 678/88 Kfar Vradim v Minister of Finance, IsrSC 43 (2) 501, 508 (1989)). This is one of the basic rules in our legal system. Indeed, not every distinction constitutes discrimination. There are situations in which the principle of equality recognizes a relevant difference that justifies separate treatment for individuals or groups. In such situations, the distinction is not tantamount to prohibited discrimination (see, e.g., C.A.L. Cargo Airlines Ltd., the judgments of Justices M. Heshin and T. Orr). A claim of discrimination arose only where different and unfair treatment was given to equals (see, e.g., HCJ 11163/03 Supreme Monitoring Committee for Arab Affairs in Israel v Prime Minister (unpublished, February 27, 2006); hereinafter: the Supreme Monitoring Committee).

  61. The other side of the principle of equality is the prohibition on practicing discrimination. A sense of discrimination damages the fabric of society and the willingness of its citizens to contribute to the state and integrate into society. Discrimination vitiates the public’s trust in the government system and increases the feeling that the government is run arbitrarily; it is “an evil that penetrates the underpinnings of democratic government, permeates and destroys the foundations until, ultimately, it leads to its collapse and destruction” and (HCJ 2618/00 Parot Co. Ltd. v Minister of Health, IsrSC 55 (5) 49, 58, Justice E. E. Levy). This is particularly true in the distribution of budget funds which contravenes the provisions of the primary legislation and is implemented on the basis of criteria that are not made public and are not subject to public scrutiny.

  62. The decision on the question of whether a particular norm violates the principle of equality is not at all simple. By its very nature, the question calls for discussion of the characteristics and purposes of the norm, and determination of the “peer group” relevant to the matter at hand. The peer group is a group of individuals or entities to which the obligation to act with equality applies (see National Youth Theater, p.281), and it derives, inter alia, from the purpose of the norm and the scope of its employment. Sometimes the legislator determines the peer group in the norm itself, and sometimes the court must define, by means of different variables, what the peer group is in each specific case.

  63. The petitioners in the petition before us claim that the peer group was determined by the legislator in the regulations that were promulgated pursuant to Section 3 of the Income Support Law. As stated, the regulations establish that eligibility for income support payments was denied to students studying in institutions of higher education or post secondary institutions, students in religious institutions and students in yeshivot and Torah study institutions. The petitioners argue that by including the various groups in one framework – which denies them the right to the benefit (subject to exceptions set forth in the law) – the legislator expressed the will that all the groups studying in the various institutions listed in the regulations be deemed one peer group.

  64. In contrast to this argument, the respondents believe that the fact that the Budget Item was added to the budget law in the same year in which the Income Support Law went into effect, indicates that the legislator wanted to designate, in that framework, one group of students, and enable it to receive income support payments. According to the respondents, there are disparities that justify the difference in treatment between students in institutions of higher education and kollel students. The state argues that while the group of [non-kollel] students study for a limited period of time and for a specific purpose (i.e., to acquire a profession), kollel students study solely for the sake of the Torah. Torah study is their profession, and their studies do not constitute a means to any other end. According to the state, this difference is what justifies a distinction between the groups.

  65. In view of the dispute between the parties, the main question that must be decided is not whether there is a difference between the groups – that certainly exists. Rather, the main question is whether there is a distinction – or a difference – that is relevant to the matter in question. There is no dispute that between the group of petitioning students and the group of kollel students there are many differences. Thus, for example, their lifestyles are different, the purposes for which they are studying are different, and the subject matter of their studies is different, as is the nature of their studies. However, the very fact that a distinction can be made between the groups on the basis of the existence of differences between them does not mean that such a distinction is legal. A distinction between those who are different does not amount to prohibited discrimination where the difference is relevant to the purpose of the norm that distinguishes between them. In the Elad Case (HCJ 4906/98 Free People Society for Freedom of Religion, Conscience, Education and Culture v Ministry of Construction and Housing, IsrSC 54 (2) 503 (2000); hereinafter: the Elad Case), which adjudicated the question of equality in housing benefits that were given solely to the residents of Elad, I noted the following (ibid., p. 513):

    A discriminatory norm, which is prohibited by law, is a norm that determines different treatment for people who should be treated equally. A group that must be treated equally is a group whose unique characteristics are relevant to the purpose of the norm, to the substance of the matter and to its special circumstances, a group that must be deemed distinct from others for the purpose of that matter.

  66. In order to determine whether the characteristics that distinguish the group of kollel students are relevant to the purpose of the norm, we must first investigate the purpose underlying the income support payments. Income support payments, as their name suggests, were designed to ensure a minimum level of income to anyone who cannot provide himself with the income required to subsist and to meet basic vital needs (see the explanation to the Income Support Bill, 5740-1979, Bill 1417 p. 2). The purpose of income support payments is to provide financial assistance to needy population groups, and it is based on the perception of the state as a welfare state, which provides a safety net for anyone in need of it. The purpose, therefore, is basically socioeconomic. To that end, various tests were established in the Income Support Law and the criteria for distributing the income support benefits by virtue of the Budget Item, which were designed to investigate the financial need of the benefit applicant among which are his monthly income and the assets registered in his name.

  67. In view of the purpose underlying the income support payment arrangements to provide financial assistance to kollel students, the question arises as to whether the distinction between kollel students and other students, in view of the differences in the scholastic objectives of each one of the groups, is a relevant distinction. This is not the first time that this court has been required to examine whether, for the purpose of state funding and various financial benefits, different rules should be established for kollel students and for other students. The Elad Case examined the legality of various financial benefits that were given by the state to purchasers of housing units in Elad, a new ultra-orthodox city that was established in the center of the country. The petition claimed that the benefits were not given to purchasers of apartments in other places in the center of the country. In the judgment, we found that the policy of housing assistance was determined according to individual eligibility conditions that are established by the Ministry of Construction and Housing, taking into account the economic, social and familial status of the eligible person, and in accordance with the policy and preferences of the government vis-à-vis the supported housing areas. Insofar as determination of the level of eligibility is based on financial need and socioeconomic status, we ruled that this must be done according to uniform criteria for the entire population. The following was noted in the judgment (the Elad Case, p. 513-514):

    When the purpose is assistance due to financial need, the extent of the assistance is affected by the size of the family, its income, the housing conditions available to it and other personal particulars that indicate neediness. Housing hardship is the same hardship for every needy family. All those in need of assistance constitute one peer group, whatever their national, religious, communal and social affiliation may be .... for that reason, no distinction should be made between the people in that group according to a fact that is not relevant to the hardship and to the need for housing assistance – their belonging to the ultra-orthodox community.

  68. Similarly, in the judgment in the Kabel Case, both the court and the state – in different opinions and in press releases – noted that for the purpose of housing assistance, kollel students and other students are in the same peer group. The judgment dealt with the plans for construction of state-subsidized rental apartments for kollel students whose profession is studying Torah. The general procedures for determining eligibility for housing assistance provide that every candidate must meet the prerequisite of “optimization of earning capacity.” The deputy minister of Housing and Construction at that time, who wanted to promote the construction plans for kollel students, proposed new criteria for determining eligibility in which he wanted to exempt the kollel students from the need to meet the optimization of earning capacity condition. In response, the deputy attorney general at that time stated in an opinion that “Amending the criteria as requested, in such manner that the condition of ‘optimization of earning capacity’ would not apply to yeshiva students, raises a dual problem: first – discrimination vis-à-vis other population groups who are required to meet this condition, such as other students and the unemployed” (ibid. p.248). Notwithstanding the opinion of the deputy attorney general, the Ministry of Construction and Housing began to build the apartments and, prior to the hearings on the state budget for 1998 and following an undertaking that was given to the United Torah Judaism faction in the Knesset, the Ministry of Construction and Housing wanted to change the criteria. A press release published by the Ministry of Justice stated that according to the new criteria, apartments could be allocated to kollel students whose profession is studying Torah, however, any relief that would be given to kollel students “will apply equally to other similar populations ([non-kollel] students) and that such eligibility must be qualified and limited in time (ibid., p. 250). New criteria were established as stated, whereby the category of “learner” was added, which included married non-kollel students and also those whose profession is studying Torah. However, as indicated by Justice M. Heshin in the judgment, the criteria were for the sake of appearance only and, in actuality, they applied only to yeshiva students. Justice Heshin stated (ibid., p. 261):

    [The criteria] are not telling us the truth, about the fact that they have always been designated – and that is even the actuality – to benefit those whose profession is the study of Torah, while discriminating against other students. Yeshiva students and other students are listed (for the purposes of this case) in the same peer group and rights that are granted to some by law must also be given to others. Once we understand that – according to the guidelines – yeshiva students are supposed to receive rights that are not given to other students, we also understand that the state’s actions are prohibited. This discrimination in distributing public resources – the heart of the matter: discrimination whose only justification is fulfilling an agreement between coalition partners – is intolerable and the court will not allow it to become established and to remain in place.

  69. The court reached a similar conclusion in the Yekutieli Case, which dealt, inter alia, with the legality of a regulation enacted by the Minister of the Interior, which enabled a local authority to grant kollel students, who receive income support benefits (the same benefit whose legality is under discussion in this petition), a discount on municipal taxes. The court ruled that the regulation distinguishes between kollel students and other students in institutions of higher education, and noted (ibid., p. 700):

    Here they are before us: one is a yeshiva student, the other is the student in an institution of higher education. Both are married, neither is working (neither they nor their wives), they have no income, and each one of them has three children. Neither of the two is eligible for benefits under the Income Support Law; one, because he is a student in a “yeshiva” (or in a “Torah study institution”), the other because he is a student in an institution of higher education .... the financial situation of the two may be identical, but even so – as set forth in Regulation 2(7)(a) of the discount regulations – the kollel student will receive a discount on municipal taxes – only because he is a kollel student, i.e.: only because he is eligible for payments to ensure minimum income from the Ministry of Religious Affairs – while the other student, as a student [in a different type of institution] will not be eligible for the discount. What is the justification for this? What is the reason for this discrimination – to the detriment of the other student?”

  70. This court’s ruling in a series of judgments, whereby the distinction between kollel students and [other] students is not based on a relevant difference where the benefit given to one of the groups is based on the goal of assisting members of the group financially, is also pertinent to this case. The difference in the objective of the study (i.e., study for the purpose of acquiring a profession or for purely spiritual purposes) is not a relevant fact were the purpose of support is basically economic assistance whose goal is to provide the recipient and his family with minimum income. The need that arises for income support is identical, whether it involves a student in an institution of higher education or in a Conservative institution of religious study, or a student studying in a kollel. Because of their studies, none of them can work to support themselves. All of them invest all their time and energy in their studies in a manner that prevents them from supporting their families. However, under the existing legal situation, only one of them is eligible for income support benefits.

  71. In its responses to the petition, the state argued that the purpose underlying the Budget Item is not economic, but rather ideological, based on encouraging Torah study. As stated, we cannot discern from the wording of the Budget Item that that is, indeed, the purpose, and perhaps it is even the opposite. The heading of the item, “Minimum Income Support for Kollel Students,” attests to the fact that the main purpose is to provide financial assistance and not to encourage study, even though encouraging study can be a side effect of financial assistance. The criteria for determining eligibility for the benefit support this conclusion. According to the criteria, not all kollel students are eligible for the benefit. For example, a kollel student who has two children (and not three, as required by the criteria) is not eligible for the benefit. Was it stated that the state does not desire to encourage the Torah study of this kollel student? The obvious answer is that the criteria were designed to determine a minimum threshold based upon economic status, and this threshold assumes, for example, that the economic status of a family with three children is graver than a family with two children; just as an ultra-orthodox family that owns another asset, aside from their residential apartment, is not eligible for an income support benefit. Even though no one disputes that there is also an ideological basis underlying any budgetary support, the essence of which is to promote and encourage the supported activity, the economic need is the foundation for the conditions of eligibility for income support benefits, because if the purpose had been solely to encourage learning, all of the kollel students would be eligible for the benefit.

  72. Moreover, even if the state’s argument regarding the ideological purpose underlying the Budget Item was accurate at the time, the developments that have occurred in this matter among the ultra-orthodox community and in the various legal mechanisms regarding the arrangements for exemptions given to yeshiva students and encouraging the ultra-orthodox to seek employment, create more than a few problems regarding this reasoning for the support. For example, in the Tal Law Case judgment, the court determined that the Deferral of Service Law has four main purposes: to lawfully establish the arrangement for deferring the service of yeshiva students whose profession is studying Torah; to establish more equality in distributing the burden of military service; to increase the participation of the ultra-orthodox population in the job market and encourage ultra-orthodox men to go to work, particularly in view of the situation that preceded the Deferral of Service Law, in which deferment of service was contingent upon absolute refrainment from any occupation except learning in a yeshiva, and gradual resolution of the problems that existed in the arrangement for those exempt from service (Tal Law Case, p. 44 of the judgment). In the state’s arguments in response to the petition that was filed about application of the law (HCJ Ressler), the state also reiterated and specified the various arrangements that were established in the Deferral of Service Law, whereby kollel students were allowed to work with certain restrictions, with the aim of “enabling the older students to earn a living after study hours, in order to allow them to increase their income by means other than support from the state budget” (the state’s response dated May 18, 2008, p. 12); the explanations of the Deferral of Service Law also noted that “the purpose of the year of decision is to enable those who are uncertain about whether to continue with their studies or enter other frameworks that will enable them to integrate into the economy, the job market and society in general, to consider their course of action .... in addition to that stated, the year of decision is designed to enable yeshiva students to learn a profession and seek employment, without losing the status of a person whose ‘profession is studying Torah,’ and to ease the transition from a lifestyle of Torah learning to a different lifestyle” (explanations to the Defense Service (Deferral of Service for Yeshiva Students Whose Profession is Studying Torah) (Temporary Order) Bill 5760-2000, Bill 2889, p. 457 (5760)). All the above indicates that the validity of the ideological purpose – even if it was the basis for the 1982 Budget Item – has eroded and the legislator himself is adapting the various legal arrangements to the changing reality of life in Israeli society in general and in the ultra-orthodox community in particular.

  73. It should be added in this context that over the years the scope of the support provided under the Income Support Law has also diminished. As we noted in section 2 above, changes in the economic policy have led to a narrowing of the conditions of eligibility for income support benefits under the law and to cutbacks in the rate of the income support benefits (see, e.g., the Arrangements in the State Economy Law (Legislative Amendments for Attaining the Budget Goals and the Economic Policy for the 2003 Fiscal Year), 5763-2002; see also the court's discussion in the Commitment to Peace and Social Justice Association Case). A cutback in the scope of the benefits granted under the Income Support Law derived from changes in the economic trends that were applied to recipients of the benefits under the Income Support Law. These changes were not discussed and, in any case, were not applied, in the context of income support benefits under the Budget Item.

  74. The conclusion that emerges from analysis of the normative framework that applies to the budget laws in Israel, and from the comparison between the Income Support Law and the Budget Item, is that the income support benefit for kollel students under the Budget Item violates the obligation of equality with regard to the distribution of state funds. The income support benefit for kollel students constitutes a type of earmarked funds, which were prohibited with the enactment of Section 3A. The benefit is paid to kollel students in contravention of the provisions of the Income Support Law, under which students in various institutions are not eligible for the benefit, among them kollel students. As we noted above, in view of the economic purpose underlying the income support payments, the distinction between different groups of students based on differences in the nature of the studies is not based on a relevant difference and, therefore, constitutes a prohibited distinction.

  75. The obligation to distribute the state funding equally and without discrimination is derived from the right to equality, which has been recognized in our legal system as a constitutional right superseding the law. Its uniqueness lies in the fact that in the case law of this court and in Section 3A of the Foundations of Budget Law, conditions essential for its implementation were established in the context of distributing the state funding. Thus, for example, case law established the principle whereby state grants would be distributed according to clear and overt egalitarian criteria (see, e.g., the Tzaban Case). Similarly, Section 3A established a detailed process for determining the entities to which state funding would be given. These and other arrangements are designed to adapt the principle of equality to the distribution of state funds from the state budget and, therefore, they constitute a private instance of the right to equality. The obligation to distribute state funds equally is also based on the constitutional aspect of the right, it is an integral part of it and the long tradition of case law and legislation in this connection expresses the unique aspects of equality in this area.

  76. We therefore find that the income support benefits, which are paid under the Budget Item, violate equality. However, the examination does not end here, since everyone will agree that, notwithstanding the importance of the right to equality, it is not an absolute right. Like other rights in a modern society, the right to equality also recedes, in the appropriate cases, before opposing rights or interests and there are cases in which the discrimination or the violation of equality is not unconstitutional. Therefore, we must examine whether the violation of the right to equality created by support of the kollel students according to what has been established in the budget law, satisfies the conditions of the limitations clause in the Basic Law: Human Dignity and Liberty (see: HCJ 7052/03 Adalah – The Legal Center for Arab Minority Rights in Israel v Minister of Interior (unpublished, May 14, 2006) (hereinafter: the Citizenship Law Case)). See, in this context, the words of President A. Barak in the Supreme Monitoring Committee Case (paragraph 22):

    Even when a violation of equality has been proven, we must examine whether the violation meets the requirements of the limitations clause in Section 8 [of the Basic Law: Human Dignity and Liberty], i.e., whether the decision is appropriate to the values of the State of Israel, whether it was intended for a proper purpose, and whether the violation of equality is implemented to an extent that is not excessive. There may, therefore, be permitted discrimination (see HCJ 3434/96 Hoffnung v Speaker of the Knesset, IsrSC 50 (3) 57, 76). Indeed, the right to equality, like every other human right, is not an “absolute” right. It is “relative” in nature. This relative nature is reflected in the possibility of lawfully violating it, if the conditions of the limitations clause are satisfied.

    The limitations clause contains four conditions: the violation must be established in a law or under a law or by virtue of an express authorization therein; which befits the values of the State of Israel; is intended for a proper purpose, and to an extent that is not excessive.

  77. There is no dispute that in the petition before us, the requirement of legality is fulfilled, as the Budget Item has been included in the annual budget laws since 1982. For the sake of discussion, I am prepared to assume that the conditions requiring the existence of a proper purpose that befits the values of the State of Israel are realized in this case. In our above discussion we examined the purpose underlying the Budget Item and we found that the purpose of the Item is to provide financial assistance to kollel students who meet a series of eligibility conditions. We also noted that, according to the state, the Item also encompasses an ideological goal of encouraging Torah study. We determined that we cannot ignore the objective indices, which attest to the fact that the dominant purpose of the Item is the provision of financial assistance to kollel students – even if such assistance serves to express the goal of encouraging Torah study. Indeed, the questions regarding the manner of encouraging Torah study and the scope of the encouragement that the state provides for this purpose, are complex questions that are pending before the various authorities, and even before this court, and they pertain to the manner of determining priorities according to society’s ideological goals. Among others, the question of encouraging Torah study is pending in petitions about determining priorities in inducting kollel students into the army and assisting their entry into the job market. I do not wish to elaborate on this matter. I would like to note that even if we accepted the state’s position, that the Budget Item allows for recognized and conscious support of Torah study, and we have not stated that, it is doubtful whether the vehicle of financial assistance for this group alone befits the proper purpose. In any case, for the sake of discussion, I am prepared to assume that, from the constitutional aspect, this involves a proper purpose.

  78. Even if we assume that the purpose in itself is proper, the question arises as to whether the means that were chosen to realize the purpose are proper; and whether the extent of the violation, caused by the use of these means, is not excessive. That is the test of proportionality.

  79. A statute or an act by an administrative authority fulfills the requirements of proportionality when there is a proper ratio between the purpose that the law or the action are designed to realize, and the means employed to realize the purpose (see, e.g., the Tal Law Case, paragraph 57 of the judgment of President A. Barak). Various considerations assist in considering whether a statute satisfies the proportionality requirement, among which are the nature of the violated right, the extent of that violation and the importance of the values and the interests that the law or the administrative action were intended to realize (see, e.g., the Menachem Case, p. 280). As a rule, the more significant the violation of a right, the more meticulous the examination of proportionality (see, e.g., HCJ 3648/97 Stamka v Minister of Interior, PB 53 (2) 728, 777 (1999)).

  80. Three subtests help in examining whether a statute or an administrative action fulfills the proportionality requirement: the rational connection test; the least harmful measure test; and the test of proportionality in the narrow sense (see: the Tal Law Case, paragraph 57 of the judgment of President A. Barak and the references therein). These tests are designed to ensure that the violation of the constitutional right, assuming that it is required to promote the proper purpose, is proportional. To that end, we must examine whether, from a factual standpoint, there is a rational connection between the means and the end, in the sense that there is a real probability that the means will accomplish the end; we must examine further whether the means that were chosen violate the constitutional right to a lesser degree; and, finally, we must examine whether there is a correlation between the extent of the benefit that arises from the law or the administrative action and the extent of the violation of the constitutional right.

  81. Most of the deliberation on the petition before us will focus on the second and third subtests, because in terms of the rationally connected means, it is reasonable to assume that monthly support by means of the income support benefits given to kollel students who have no income from work improves their financial situation. The second subtest, the least harmful measure test, is designed to examine whether, of all possible measures for realizing the proper purpose, the means with the lesser violation of the constitutional right was selected (see: the Menachem Case, p. 279). In this case, the question is whether it would not have been possible to achieve the financial purpose – which is, in any case, the dominant purpose underlying the Budget Item – with a lesser violation of the right to equality. It is important to note in this context that the least harmful measure test (or “the test of need”) does not require the selection of the least harmful of the means. It is sufficient to show that among the relevant means, it can be said that the chosen means – considering the violated right and the severity of the violation – allowed for a lesser violation of the basic right (the Citizenship Law Case, paragraph 68 of the judgment of President A. Barak).

  82. In the judgment that was rendered in the Israel Investment Managers Association Case, President A. Barak compared that test to climbing a ladder, and stated that “The legislative measure can be compared to a ladder, which the legislator climbs in order to achieve the legislative purpose. The legislator must stop on the rung at which the legislative purpose is achieved, and on which the violation of the human right is the least.” In examining the severity of the violation and whether there is a less severe means by which to attain the purpose of the legislation, the court does not place itself in the shoes of the legislator. The underlying assumption is that there is a margin of proportionality in which there may be a number of ways to attain the purpose of the legislation, from which the legislator can choose one. As long as the chosen way is within that margin, the court will not intervene in the legislator’s decision. The court will be willing to intervene in the legislator’s choice only where it can be shown that the violation is not a lesser one and that the legislative purpose can be attained by utilizing less severe means (see, e.g., Civil Appeal 6821/93 United Mizrachi Bank Ltd. v Migdal Kfar Shitufi, IsrSC 49 (4) 221, 444 (1995); Israel Investment Managers Association Case, p. 387; HCJ 1030/99 MK Oron v Speaker of the Knesset, IsrSC is 56 (3) 640 (2002), pp. 666-667).

  83. When we examine the Budget Item and the criteria that were formulated in the course of the petition for the purpose of distributing the funds among the kollel students, it is hard to say that the means that were chosen are means that ensure a lesser degree of violation of equality, considering the purpose that the Budget Item is meant to achieve. It is worth reiterating that the Budget Item enables kollel students to receive income support benefits in contravention of the Income Support Law and the regulations promulgated thereunder, pursuant to which groups of students are not eligible for payment of income support benefits. The Budget Item circumvented the provisions of the Income Support Law and established that income support benefits would be given to only one group among the four groups of students to which the benefits are denied. The violation of equality resulting from provision of the benefits to only one group among those belonging to that peer group is significant and severe. The Budget Item devotes itself solely to kollel students, and anyone who is not a kollel student cannot come within the bounds of the Item. The result is that university students or students in a religious institution or in a Torah study institution – even if they are in the same financial situation as kollel students who are eligible for income support benefits, and even if they meet the conditions established in the Income Support Law – are not eligible for benefits. In contrast, their colleagues, the kollel students, are eligible for income support benefits by virtue of the Budget Item.

  84. Would it not have been possible to ameliorate the financial state of the kollel students in a way that would reduce the violation of the principle of equality? As I noted above, in the long series of judgments issued by this court about the distinction between kollel students and other students, the court ruled that where the purpose of the assistance is financial support, tests of equality must be employed that are based on the extent of neediness or financial need, and not on other considerations. For example, in the Elad Case, which dealt, as stated, with preferential treatment in housing for residents of Elad, the court stated (p. 514):

    Even if there is a basis for assuming that the ultra-orthodox population has many needs, and that there are many families suffering from financial distress among this community, the level of “eligibility” of apartment purchasers, in terms of financial need and socioeconomic status, must be examined according to uniform criteria for the entire population. The needs of a needy family which, according to its data, should be granted assistance for its housing needs, are determined according to the purpose for which the assistance is given – the socio-economic need.

  85. In its arguments, the state did not specify the reason for applying a different eligibility test to kollel students and to students in institutions of higher education or yeshiva students. The reasoning whereby the desire to promote Torah study is the basis for the benefit – even if we accept the position that that is actually the purpose of the Budget Item – does not explain the distinction between kollel students and students in religious institutions or other yeshiva students, for example, who are also denied benefits under the Income Support Law. This is particularly true in view of the fact that the criteria for distributing the benefits under the Budget Item are based on economic tests. Since that is the test, what is the point of distinguishing between the different groups of students in a manner that significantly violates the right to equality?

  86. Moreover, a perusal of the provisions of the Income Support Law shows that the financial welfare of specific population groups can be promoted in the conditions set forth in the law, without the need to employ a whole system of separate eligibility conditions. In this context, it is sufficient to mention Section 3 (4) (b) of the Income Support Law, which we discussed above, that enables single parents, who received income support benefits for 16 of the 20 months that preceded their studies, to continue receiving income support benefits during the course of their studies towards an undergraduate degree, subject to the conditions specified in the law. The importance of these arrangements and others like them lies in the fact that they allow for support of a discrete group while preserving the overall framework of the Income Support Law. Within that framework, these arrangements continue to impose on the discrete group the eligibility conditions specified in the Income Support Law, particularly those pertaining to examination of the financial status of the benefit applicant. These arrangements also promote the goal underlying the Income Support Law, to concentrate all the welfare payments that preceded it in one framework, that of the National Insurance Institute. The arrangements listed in the Income Support Law naturally constitute only an example of the type of arrangements that promote the economic welfare of special groups, while they may reduce the violation of the right to equality. There are, of course, other courses of action that the legislator can choose, among them those that are not limited to direct financial assistance, and which could promote the purpose with a lesser violation of the right to equality.

  87. In its responses to the petition, the state endeavored to distinguish between the support given to kollel students under the Budget Item and the income support benefit provided under the Income Support Law. Thus, for example, the state noted the fact that the benefits given to kollel students are significantly lower than those given to others with similar qualifications under the Income Support Law. This distinction attests to the fact that, according to the state, the assistance is proportional, since it is a relatively smaller amount and is not given to all the kollel students, but only to those who meet the eligibility criteria. Indeed, as argued by the state, there are differences between the assistance provided under the Income Support Law and the assistance provided under the Budget Item, but this does not mean that the differences make the means proportional. Indeed, the amount of the monthly benefit given to kollel students may be lower than the amount of the benefit provided under the Income Support Law (which is determined according to the level of eligibility), but even the criteria for calculating eligibility for benefits under the Budget Item, including the conditions under which the monthly income of the kollel student is calculated, which will not impair his right to the benefit, are very different, and allow for receipt of benefits under the Budget Item, even in situations that would have denied the benefits to those eligible for them under the Income Support Law. We should add to this that for many years the benefits were distributed without any orderly, overt and egalitarian criteria, and once the criteria were established after submission of the petition, they were adapted to the unique needs of the kollel students. The differences between the benefits provided under the Budget Item and the income support benefits provided under the Income Support Law do not make the chosen means proportional, but rather the opposite. They exacerbate the inherent problem that exists in the Budget Item – the fact that it was tailored especially to the kollel students in the form of earmarked funds, and in a manner in which conditions were adapted to the nature of the income and family status of the kollel students, in contrast to the Income Support Law, the conditions of which are designed to apply to all benefit applicants in Israel, including kollel students

  88. The conclusion is therefore that the Budget Item, under which the income support benefits are paid to kollel students, does not fulfill the second condition of proportionality, which is the least harmful measure test. Naturally, this finding also impacts the conclusion about the third test of proportionality, which examines the correlation between the extent of benefit arising from the law or the action and the extent of violation of the basic right (see HCJ 2056/04 Beit Sourik Village Council v Government of Israel, IsrSC 58 (5) 807,850 (2004)). The third test examines the results of the legislation or the violative administrative action. It is essentially a normative test, balancing between the benefit in realizing the proper purpose and the violation to the constitutional right.

  89. No one disputes that promoting the welfare of a population with a low socio-economic status is an important purpose that should be promoted. For the sake of discussion, I am also prepared to assume that the financial support for kollel students can encourage Torah study. That is also an important goal, which expresses recognition of the uniqueness of the ultra-orthodox population and the importance of the value of Torah study. However, in view of the severe violation of the right to equality, it cannot be said that there is a reasonable ratio between the severity of the violation and the social benefit deriving from the violation (see: the Menachem Case, p. 279).

  90. Even where the purpose of the legislation is proper and can promote important social goals, there must be assurance that the means chosen to promote it are proper as well. Indeed, the ends do not justify the means. The requirement that the violation of the right be “to an extent that is not excessive,” reflects the accepted constitutional balance in our law, whereby rights are not absolute, but rather relative. Rights, even if they are constitutional rights, are examined in light of the specific violation and against the goal that the violation was designed to achieve. The balance act is not an exact one. It requires a case-by-case examination of the purpose, the means chosen to accomplish it and the extent of the violation of the right. The more significant the right and the greater the violation of that right, the more necessary it is to indicate a real public interest that would justify the violation.

  91. In the circumstances of the case before us, I did not find a proper proportion between the violation of the right to equality and the social advantage deriving from the income support benefit paid pursuant to the Budget Item. Even though there is no dispute that the legislator can promote special populations – whether by means of financial assistance or by recognizing their unique lifestyle – such support must be provided while preserving the rights of other groups in similar situations and while taking into account the gamut of legal arrangements in our legal system. In view of the significant violation of the right to equality – which is a basic constitutional right – the legislator should have examined the use of less harmful means that would reduce the violation of the right. Such an examination was not implemented, inter alia, because of the fact that the assistance was given in the annual budget law.

  92. In this context, I wish to address another claim made by the state. In its responses to the petition, the state argued that the violation of equality among the various groups of students should not be examined solely on the basis of the Budget Item, but that the entire gamut of support arrangements relevant to each group should be examined. In principle, I find this acceptable. There are situations in which examination of the support arrangements in general can shed light on the scope of assistance given to a certain group, particularly against the scope of assistance given to other groups (see also HCJ Adalah, pp. 175-176, Justice Y. Zamir). However, in general, the state cannot suffice with this statement without presenting data for our perusal, from which we can examine whether the gamut of support arrangements show that there is no violation of the principle of equality or at least that the violation is proportional. I discussed this in the Commitment to Peace and Social Justice Association Case), which dealt with cutbacks in the rate of income support benefits. The state’s argument there was similar to the argument it has made before us, whereby in order to examine whether the cutback in income support benefits violated the petitioners’ constitutional right to dignity in the sense that their minimum material subsistence conditions were not sufficient, the entire gamut of national and local means must be examined in both primary and secondary legislation, which would support the petitioners and ensure them the minimum required for human subsistence. In my judgment, I noted that “the full information for conducting a comprehensive examination” was in the state’s possession and, therefore, where the petitioners had borne the initial burden of proving the violation, the burden of proof for the existence of the gamut of means and allocations that could prove the absence of violation passes to the state at the first stage of the constitutional examination (ibid., pp. 491-492). In the petition at hand, the state did, indeed, mention the subsidized tuition in institutions of higher education and the mechanisms of the aid and scholarship funds available to students as examples of the direct and indirect support given to students. But this information was extremely general and did not indicate the extent of the assistance provided to the students. The state also did not provide any information on the extent of the overall assistance given to kollel students in a way that would enable us to make a comparison between all the assistance provided to each one of the groups.

  93. These circumstances lead to the conclusion that the Budget Item violates equality and does not meet the conditions of the limitations clause. It is important to note that our conclusion does not mean that the legislator cannot support a specific population group in a manner that enables it to preserve its uniqueness. Such support expresses an ideological societal choice to enable individuals to belong to a community and to preserve their lifestyles and values in the community – including values such as encouraging the study of Torah. I discussed that in the Elad Case and I held that for the purpose of allocating land, the option of allocating separate housing to groups with special characteristics “is consistent with the outlook that recognizes the right of minority communities to preserve their uniqueness if they wish to do so; this is an outlook that represents an approach that is now widespread among jurists, and societal and educational experts, whereby the individual is also entitled – among his other rights – to realize his affiliation to the community and its special culture as part of his right to personal autonomy” (ibid., pp. 508-509; see also in this context the words of Justice SA. Procaccia in the Tal Law Case). However, even if the allocation of resources to a distinct population group is not invalid in itself, it must be done legally and in accordance with the principles of Israeli constitutional law. Among other things, the allocation must be implemented according to egalitarian criteria, without discrimination, and taking the gamut of existing arrangements in the legal system into account.

    Summary

  94. The discussion on the legality of the Budget Item in the petition at hand focused, as stated, on the normative framework that dominates the annual budget laws and, primarily, the provisions of the Foundations of Budget Law. We have found that the Budget Item violates the obligation to distribute the state funds equally, an obligation that was established in a long series of rulings by this court and is also anchored in Section 3A of the Foundations of Budget Law. We also ruled that a provision in the annual budget law that conflicts with a substantive provision in the Foundations of Budget Law and violates a basic right, cannot stand. We noted, however, that judicial review on the budget legislation, in view of the unique characteristics of the annual budget law, should be restrained and implemented with attention, inter alia, to the right that is violated and to the extent of that violation.

  95. In the petition before us, we have found that the Budget Item is a disproportionate violation of the right to equality. Therefore, the Budget Item, which is the subject of the petition before us, cannot stand. In the circumstances of the matter, I will propose to my colleagues that we order that the Budget Item will remain in place as it appears in the annual budget laws for 2009 and 2010, which were established as part of a biennial budget, however, it cannot continue to be included – at least not in its present format – in future budget laws. If the legislator should wish to continue to support all or some of the kollel students, he will have to reexamine the arrangement, subject to the judgment. If we have seen fit not to cancel the Budget Item on the spot, we have done so in an effort to reduce the impairment to the interests of the benefit recipients who rely upon it. We cannot ignore the fact that the benefits have been paid to kollel students for over two decades, and the immediate cessation of payments would cause harm to an impoverished population. Presumably, the families of the kollel students receiving benefits rely on those benefits in calculating their monthly income for the purpose of basic subsistence. Therefore, we have seen fit to enable them to prepare to find alternative sources of income.

  96. However, not only the reliance interest leads to the conclusion that the Budget Item in the present budget law should not be canceled. One of the problems arising from the fact that the income support payment arrangement for kollel students has been included in the annual budget laws is that no comprehensive examination of it; of the purpose underlying the arrangement; the precise definition of the target population; the conditions for denying eligibility or the ramifications entailed in providing the benefits to a particular group in contrast to other groups that are not eligible for similar benefits has been made. Therefore, the decision to refrain from declaring the immediate cancellation of the Budget Item is also motivated by the desire to enable the legislator to examine the gamut of existing arrangements, thereby giving the Knesset time to conduct practical discussions on the issue.

  97. In conclusion, for the reasons set forth above, we have found that the Budget Item disproportionately violates the right to equality. Taking into account all the circumstances in the matter, we do not see fit to order the immediate cancellation of the Budget Item. The Budget Item in its present form cannot be included in the next budget law. If the legislator should choose to support kollel students, he will have to do so while heeding all the existing legal arrangements and taking into account all the reasons specified in this judgment.

  98. Therefore, the petition is accepted. Budget Item no. 20-38-21 will continue to remain in effect as set forth in the biennial budget law for 2009 and 2010. The order nisi will become absolute in the sense that as of the 2011 budget year, the support will not be given to kollel students under the Budget Item in the annual budget law.

    Justice M. Naor

  99. I concur with the judgment of my colleague, the president.

    Justice S. Joubran

  100. I concur with the comprehensive judgment of my colleague, the president.

    Justice A. Procaccia

  101. I concur with the judgment of my colleague, President Beinisch, and with her conclusion that the arrangement under which income support benefits are paid to kollel students under a Budget Item is illegal and unconstitutional, as it is inconsistent with the principle of equality, and does not pass the test of the limitations clause in the Basic Law: Human Dignity and Liberty.

  102. The distinction between kollel students and other students in educational institutions in Israel with regard to income support monies, under the current legal arrangement, is an exemplar of a broader, more general question. The broader question deals with the profound dilemma between the obligation of a multicultural society to recognize and respect the unique character of various population segments living in its midst, notwithstanding their differences, and the basic principle, which is among the foundations of the state’s existence, that obligates all citizens of the state, whoever they may be, to assume the basic values of the government and to bear the burden of the responsibility and the basic obligations that must be borne by every citizen, as a vital and fundamental condition for the existence of a democratic society. The necessity of maintaining a full partnership in bearing the burden of civic responsibilities and obligations is the main link connecting the various population segments, despite their points of uniqueness and the differences between them, and it ensures the existence of a basic common denominator that unifies all parts of the population, which enables the existence of social harmony while safeguarding sectoral singularity. The need to bridge the gap between sectoral uniqueness and egalitarian partnership in bearing the burden of civic responsibilities and obligations is at the heart of this petition. It is about drawing the boundaries between providing protection and public support and funding toward sectoral uniqueness, and maintaining the principle of equality that applies to members of all sectors in bearing the basic burdens of existence, and fulfilling other civic obligations imposed on every person in society, including serving in the army, paying taxes, and incorporating into education the basic values of the state, including basic concepts of universal thought.

  103. The protection of sectoral uniqueness is the right and, perhaps, the duty of a democratic society, which must recognize the existence and needs of communities with cultures, traditions and lifestyles of their own which live in its midst. The diverse human fabric of a free society is consistent with the existence of multicultural groups, with their own characters and styles, which wish to preserve their unique ways of life. However, within the variegated and multifaceted sectoral structure, there is a connecting link that unifies all of the communities, which endeavors to make them into one reference group. This link reflects the basic values shared by all sectors, which are part of the physical and ideological foundation of the state. Among these values are the foundations of the constitutional system and the character of the state as Jewish and democratic. Another aspect of this link is a joint responsibility to bear the burden of individual and collective existence, without which a society cannot exist. Within this shared responsibility lies the obligation of every sufficiently capable person to see to his own existential needs and to the needs of those who are dependent upon him, and to fulfill other civic obligations, including the obligation to serve in the army, the obligation to impart through education certain core values which are common to all those who are raised and educated in Israel, and other basic obligations vis-à-vis the state, which are shared by all sectors of society.

  104. The principle of equality is a basic value in the law; it prohibits discrimination among equals and unequal and unfair treatment among those who deserve the same treatment. It is based on the concept of relevance that prohibits differentiating between people or matters for irrelevant reasons, but permits distinctions for relevant reasons. Equality does not require identical arrangements, and sometimes, in order to attain it, differential treatment is, in fact, called for.

  105. The allocation of state funds for various objectives is subject to the requirement of equality and must be rooted in pertinent considerations and in clear and explicit criteria. It must be carried out according to “the considerations of the subject matter and not the considerations of the interested party” (HCJ 59/88 Tzaban v Minister of Finance, IsrSC 42 (4) 705, 706-7 (1989)).

  106. A social policy that grants support to needy communities that are worthy of reinforcement in various areas of life may stand the constitutional test of the principle of equality when it is designed, in essence, to promote their status, to strengthen them, and to open before them possibilities for genuinely attaining equal opportunities in relation to other sectors of society. The provision of such reinforcement is designed to promote inter-sectoral equality, while respecting and preserving the community’s unique attributes. In this sense, the achievement of equality sometimes justifies differential treatment on the part of the state.

  107. It is another matter when state support is granted to a certain sector in the society, not in order to help it to advance toward full equality between itself and other sectors, but rather to free its members from certain components of the joint responsibility that applies to all citizens of the state. Such support is not designed to strengthen a weak community on its path toward achieving the hoped for social equality. It impairs the common denominator that unifies all sectors of the population, despite their dissimilarities; it undermines the basis that is common to all members of society, which supports the assumption that every sufficiently capable person, whoever he may be, must see to his basic subsistence and not burden the public to provide his needs, and must also fulfill his other civic duties to his state, such as serving in the army, paying taxes, and imparting educational values that belong to the basic core common to all sectors. This common denominator is the factor that unifies all sectors of the population, and its existence is contingent upon its egalitarian application to every person. This rule can only be infringed in rare and exceptional cases of an individual’s inability to carry his share of the joint responsibility, or when a considerable state interest justifies an exception to the rule, according to the established tests of the limitations clause.

  108. Sectoral uniqueness does not constitute a cause for infringing the common responsibility that applies to all sectors of the multicultural society.

  109. The ultra-orthodox community is markedly different from other population sectors in its spiritual outlook and in the lifestyle of its people. It is characterized, inter alia, by its commitment to learning Torah, as part of an internal belief that this is a necessity for the spiritual and physical existence of the Jewish people. This viewpoint is not limited to the sphere of faith and religion. It affects the lifestyles of the members of the ultra-orthodox community, many of whom view Torah study as an absolute value that is vital to safeguarding the existence and uniqueness of the Jewish people. This outlook has led to great divergence between the ultra-orthodox community and the other sectors, and to its segregation from the national life of Israeli society.

  110. Notwithstanding the singularity of the ultra-orthodox community in its ideological and religious outlook and lifestyle, members of the community are obligated to share equally in national responsibilities and in all of the civic duties borne by all members of the Israeli public. Without full partnership in this responsibility, the equality among the various sectors is impaired at the central link that ties them together, the social structure fractures, and the soundness of the regime weakens at its core.

  111. The Income Support Law, 5741-1980, and the regulations promulgated thereunder, establish that students in institutions of post-secondary education and students in yeshivot and Torah study institutions are not eligible for income support benefit payments. Underlying this rule is the assumption that the public resources intended to finance income support payments for the needy are limited by their very nature. Within the priorities that the state saw fit to determine in this area, students in institutions of post-secondary education were not made eligible for state income support funds, on the assumption that as young people who, for the most part, are not yet responsible for families of their own, they will be able, perhaps with the assistance of their immediate families, to provide for their basic subsistence for the duration of their studies. According to the policy that underlies the law, there is no justification for the state’s providing students’ needs during their studies at the cost of reducing the assistance granted to other needy persons whose welfare situation justifies greater government support. The Budget Item that arranges for income support payments to kollel students assumes, as a starting point, that while a student in a general educational institute is expected to provide for his own basic subsistence during his studies, that is not the case with regard to a kollel student, who is entitled, under the Budget Item, to government financed income support, thereby circumventing the general policy implemented with regard to all students, and thwarting the universal egalitarian arrangement which is prescribed by the law.

  112. The fact that the kollel students belong to a unique community, which sanctifies Torah study as a fundamental part of its existence, cannot justify a violation of the basic equality among all citizens of the state at the site of the common link that connects them all. In this case, this link ties together the students of all post-secondary educational institutions spread throughout all sectors of society. This link is based, inter alia, on the assumption that it is the duty of every person and, in this case, every student, to provide for his own basic subsistence, and that this duty is common to all, and the general public is not expected to shoulder the burden of these individual needs, except in exceptional cases of inability or inherent neediness. If the state chooses to assist citizens in bearing the burden of their personal subsistence at a certain stage in their lives, such assistance must be granted on an equal basis. The creation of a profound gap in this area between members of the ultra-orthodox community and all the other citizens of the state is not based on a relevant difference that justifies a permissible distinction, which would allow for the creation of different rules for the ultra-orthodox community and for other sectors. This gap reflects unequal treatment by the state, which amounts to prohibited discrimination among students of different sectors, all of whom are subject to the same duty to bear the burden of their personal subsistence throughout their studies. The uniqueness of the members of the ultra-orthodox community, and their commitment to the study of Torah, do not justify a discriminatory arrangement that favors them. The discriminatory rule that is the subject of this petition does not stand the test of the democratic process, which is built on maintaining a mandatory common denominator among various population groups, while respecting their ideological independence.

  113. The borderline between the recognition of sectoral uniqueness and the duty to sustain equality among all sectors is therefore drawn around the point that holds all population groups together: it runs through the common link shared by all citizens of the state as to certain basic responsibilities and obligations that they owe to society. As a rule, a non-egalitarian and discriminatory arrangement cannot legitimately be created in these areas, for it would undermine the common foundation for the harmonious existence of a multicultural society.

  114. Unlike other areas, in which the attainment of equality in bearing the burden of civic obligations sometimes requires a prolonged, gradual process, in this case, the achievement of equality calls for the cancellation of the discriminatory preference that was implemented in contravention of the law and the constitutional principle of equality, while allowing for a transition period that is intended to mitigate the harm to the reliance interest of those who have thus far benefited from preferential treatment.

  115. I concur with the fundamental position of the president, and with her proposal on the operative level, to allow for a transition period before the discriminatory preference is cancelled.

    Justice E. Hayut

  116. I concur with the judgment of my colleague, President D. Beinisch and the comments of my colleague, Justice A. Procaccia.

    Justice A. Grunis

  117. I concur with the comprehensive judgment of my colleague, the president.

    Justice Edmond E. Levy

    (dissenting)

  118. The budget law reflects a policy and objectives that it wishes to achieve and, as we know, the establishment of this policy was given to the government and the Knesset, not to the court. In this matter, case law shows that “The legitimate considerations, which, when mixed together, lead, at the end of the year, to the establishment of a budget for the subsequent year, are so numerous and so disparate that it seems that only in special cases is the court likely to order the cancellation of a provision in the budget law. The weighting of all those considerations that make up a budget law – including determining the priorities – were given essentially to the Knesset and to the government within the scope of general policy and, in any case, the intervention of the court will be limited. If the court comes to cancel budget law items – as in the petitioners’ petition – it must be convinced that those provisions mortally wound the rights of the individual, that there is no other remedy for the individual than the revocation of the law; in such a case, the law will cry out that it has failed to establish its right to exist” (HCJ 240/98 Adalah v Minister of Religious Affairs, IsrSC 52 (5) 167, 190 (1998).

  119. The state, by virtue of that policy, may grant or not grant support funds. The state is empowered to provide or not to provide support grants for certain activities and, in providing a particular activity with a grant, – the amount of money that it will provide (HCJ 1438/98 Conservative Movement v Minister of Religious Affairs, IsrSC 53 (5) 337, 38 (1999)). Naturally, the state must exercise the discretion granted to it in the area of support funds, as in any other area, with fairness and reasonableness, and preserve the norms of administrative law (HCJ 5264/05 Yeshivat B’nei Shomron v Minister of education, Culture and Sports, unpublished, 2005). Therefore, it is understood that a norm which is established within that same authority must be egalitarian, because, if not, it is a discriminatory norm, the use of which will lead in practice to a non-egalitarian result.

  120. The principle of equality is one of the basic principles of a constitutional government. It is an inherent value of a constitutional government and of the judicial review of administrative actions (HCJ 6671/03 Munjid Abu Ghanem v Ministry of Education, IsrSC 59 (5) 577, 588; HCJ 98/69 Bergman v Minister of Finance, IsrSC 53 (1) 693; HCJ 637/89 Constitution for the State of Israel v Minister of Finance, IsrSC 46 (1) 191 (1991)). Prohibited discrimination that contradicts the value of equality means different treatment for equals, and unequal and unfair treatment for those who deserve equal treatment. Inequality is expressed by the creation of a distinction between one person and another or between one matter and another for irrelevant reasons. In contrast, a practical difference between them may justify a distinction between them, provided that the distinction is based on a relevant foundation (HCJ 678/88 Kfar Vradim v Minister of Finance, IsrSC 43 (2) 501, 507 (1989); HCJ 6051/95 Recanat v National Labor Court, IsrSC 51 (3) 289, 312 (1997); HCJ Further Hearing 4191/97 Recanat v National Labor Court, IsrSC 54 (5) 330 (2000); HCJ 6778/97 Association for Civil Rights in Israel v Minister of Public Security, IsrSC 58 (2) 358, 365 (2004)).

  121. As we know, a certain norm is discriminatory even if it is not based on a discriminatory intention of the creator of the norm (HCJ 721/94 El Al Israel Airlines Ltd. v Danielowitz, IsrSC 48 (5) 749, 764 (1994); HCJ 11163/03 Supreme Monitoring Committee for Arab Affairs in Israel et al. v Prime Minister, unpublished, 2006; HCJ 2671/98 Israel Women's Network v Minister of Labor and Social Affairs, IsrSC 52 (3) 630, 654). Moreover, in certain circumstances, an infringement of equality also constitutes the violation of a constitutional right (HCJ 6427/02 Movement for Quality Government in Israel v Knesset, paragraphs 36-40 in the opinion of President Barak, unpublished, 2006; HCJ 9722/04 Polgat Jeans Inc. v Government of Israel, unpublished, 2006), and, therefore, it is necessary to examine whether the violation meets the test of the limitations clause in Section 8 of the Basic Law: Human Dignity and Liberty (HCJ 3434/96 Hoffnung v Speaker of the Knesset, IsrSC 50(3) 57 (1996); the aforementioned HCJ 11163/98, paragraph 22 in the opinion of President Barak).

  122. The study of Torah is a commandment in the Bible:

    And now, O Israel, give heed to the laws and rules that I am instructing you to observe, so that you may live to enter and occupy the land that the Lord, the God of your fathers, is giving you.” (Deuteronomy 4:1); “Take to heart these instructions with which I charge you this day. Impress them upon your children. Recite them when you stay at home and when you are away, when you lie down and when you get up.” (Deuteronomy 6: 6-7); At the end of the “He’ezinu” psalm, Moses instructs the people to teach their children “....  that they may observe faithfully all the terms of this Torah. For this is not a trifling thing for you: it is your very life; through it you shall long endure on the land that you are to possess upon the crossing of the Jordan.” (Deuteronomy 32: 46-47); And the book of Joshua states: “Let not this Book of the Torah cease from your lips, but recite it day and night, so that you may observe faithfully all that is written in it. Only then will you prosper in your undertakings and only then will you be successful.” (Joshua 1: 8). And the Talmud lists the things whose fruits a person enjoys in this world, but whose principal remains intact for him in the World to Come, among which are honoring one’s father and mother, acts of kindness, early attendance at the house of study, hospitality to guests, visiting the sick, study and prayer. “And the study of Torah is equivalent to them all.” Shabbat 127a [Babylonian Talmud].

  123. The commands that I have cited from the Biblical sources have brought many people to view Torah study as the essence and purpose of life, and they devote to it all their time with a dedication that knows no bounds, and with the profound belief that, in this manner, they are preserving the world. And even if there are those who disagree with this outlook, it appears that we cannot deny the fact that Torah study, which did not cease, even when the Jewish people were exiled from their land, made a decisive contribution to preserving it as a nation and preventing its assimilation among the nations. Therefore, this is a unique group, which has chosen a lifestyle that is almost ascetic and which views Torah study as a mission and not part of a time-limited process for acquiring a profession which also may bring financial gain in the future. This means that the component of maximizing earning capacity on which the Income Support Law is based is not applicable to the case of those studying Torah, for whom Torah study is their profession.

  124. The debate about the question of whether the livelihood of those who study Torah should be borne by the public is not new. However, in this case, it is important that the people of Israel, through their elected representative – the Knesset and the government – believe that this question should be answered in the affirmative. This is an ideological decision based on recognition of the fact that the study of Torah is vital to the people of Israel, and I do not believe that the court is entitled to change that, particularly since extremely modest amounts have been allocated to that end, which are intended to enable only basic subsistence and no more than that. The other question is, of course, whether that decision is discriminatory and that can be answered in the negative since, as stated, there is a substantive relevant difference between those who study Torah and the related group on which+ the petition relies. Above and beyond the requirement, I will add that even if I believed that the allocation of funds is not egalitarian, I would propose denying the petition because the provision in the Law meets the test of the limitations clause, and the emphasis is on the extent of the proportionality. As stated, the amounts that were allocated for supporting the kollel students are extremely modest, and even those were contingent upon meeting the conditions of eligibility. In contrast, other groups that are in the process of training to acquire a profession receive various benefits, both direct and indirect, to which those who study Torah are not entitled, such as scholarships, grants, loans and subsidized housing.

  125. In view of that stated, and if my opinion were to be heard, I would deny the petition.


Representations

Gilad Barnea, attorney at law, on behalf of the petitioners.

Osnat Mandel, attorney at law, on behalf of respondents 1-6.

Chaim Indig, attorney at law, on behalf of respondent 7.

Etty Yanai-Naveh, attorney at law; Mirit Saviyon, attorney at law, on behalf of respondents 8-9.


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