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A Knesset panel has put off voting on a bill not to deduct old-age pensions from disabled Holocaust victims' stipends, despite an agreement to the contrary between Israel and Germany.

The Knesset's Finance Committee postponed the vote yesterday following the treasury's objection, in violation of Israel's agreement with Germany not to tax Holocaust victims' stipend.

The Disabled Victims of Nazi Persecution Law stipulates that additional income, such as an old-age pension or National Insurance (NII) allowance, is deducted from the stipend allocated to needy disabled Nazi persecution victims.

The bill, co-written by MKs Colette Avital (Labor) and MK Moshe Gafni (Degel Hatora), stipulates that old-age pension and NII allowances would not be defined as income, and therefore not be deducted from the Nazi victims' stipends. Some 7,000 needy disabled people live in Israel today.

Avital said that the bill was to have been brought to the Knesset for second and third reading last summer. The finance minister asked to postpone it, promising to address the issue in the Holocaust survivors' "assistance package," but did not do so.