The state will revoke the means test currently used to determine compensation for bereaved families, Prime Minister Ehud Olmert announced Sunday.

"From now on," he told the weekly cabinet meeting, "the families of those who fell in Israel's wars and in terror attacks will receive egalitarian compensation, reflecting the state's recognition that the unbearable price they have paid cannot be a function of their financial situation. That is how it should be and that is how it will be."

Until now, the Defense Ministry paid compensation to bereaved families according to the parents' income. Many families considered the means test humiliating.

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Former defense minister Shaul Mofaz and current defense minister Amir Peretz both accepted a recommendation to annul the test, but implementation was delayed by a lack of funding.

The ministry recently allocated NIS 50 million to implement the recommendation, asking that Olmert demand a matching amount from the Finance Ministry.

"I am pleased by the prime minister's decision, which will save all the newly bereaved families of the recent war from this demeaning situation," said Eli Ben Shem, chairman of the Yad Labanim memorial organization. Ben Shem called the means test "anti-rehabilitative."

"After the disaster, bereaved parents find it difficult to return to work," he explained. "And if they do, they receive far less compensation than if they hadn't. Legislation will take 60 days and the allocations will be egalitarian from the start of next year."

David Einhorn, a member of the Family Forum, also expressed satisfaction at the decision. Now he will be able to memorialize his son Jonathan, a paratrooper who fell in southern Lebanon in early August.

"There are parents who need the allocation because of their financial situation. We need it for a proper memorial," Einhorn explained.

He is planning a 1.5-dunam memorial garden of native Israeli plant life, to reflect his son's love of Israel.