What Are Holocaust Restitution Payments?

Holocaust Restitution Payments is money paid by the governments of primarily Germany and Austria to partly compensate victims persecuted by Nazi Germany or its allies. In addition to claims for persecution, restitution payments are also made to compensate for lost housing, destroyed businesses, and liquidated bank accounts.

Key Takeaways

  • Holocaust restitution payments are money paid to the victims of that were persecuted under Nazi Germany.
  • Various countries--including Germany, Austria, Hungaria, and Switzerland--have all had or have existing programs compensating Holocaust survivors.
  • The tax-free income also applies to those who lost housing, businesses, or suffered liquidated bank accounts.

How Holocaust Restitution Payments Work

Holocaust restitution payments are not taxable as income at the federal level if the payment is received by someone who was persecuted by the Nazis on the basis of race, religion, physical or mental disability, or sexual orientation, or if payment is received by the heirs or estate of such a person. In contrast, Holocaust restitution payments that are received as compensation for stolen assets are considered taxable income.

The International Commission on Holocaust Era Insurance Claims handles these claims. Depending on the country, there are varying deadlines and eligibility requirements. Some programs, such as a German fund for those who were subject to slavery and forced labor, are now closed and no longer reviewing claims.

Compensation Programs

A variety of programs have been made available to the survivors and heirs of the Holocaust, referred to as the period during the 1930s and 1940s when Germany and Allied nations undertook a highly organized program to use the apparatus of government to systematically murder and enslave millions of Jews and others considered undesirable by the Nazi regime.

According to the Conference on Jewish Material Claims Against Germany, these programs include a Hardship Fund, Central and Eastern European Fund, Article 2 Fund, Child Survivor Fund, Orphan Fund, and funds for heirs. For survivors in the U.S., there are Holocaust Payments and Federal Benefits, Payments to Aid Austrian Survivors, Compensation for Jewish Victims of Nazi Persecution from Algeria, Romanian Survivor Relief Program, and Czech Benefits for Survivors. Not all of these programs are still open to new claims.

The council states that in the U.S., Holocaust compensation and restitution payments are excluded from calculations relating to eligibility for federally funded benefits, under 1994 federal legislation. Payments made to individuals because of their status as victims of Nazi persecution are to be excluded from income and resources in determining both eligibilities for and the number of benefits or services to be provided under any federal or federally assisted program which provides benefits or services based on need including Medicaid, Supplemental Security Income, food stamps (SNAP), and federally-subsidized housing programs.

In the U.S., national banks and state-chartered regional institutions have implemented fee waivers for Holocaust survivor payments. These include Citibank, JPMorgan Chase, Dime Savings Bank, HSBC, Apple Bank, Independence Community Bank, Greenpoint Bank, Amalgamated, Brooklyn Federal, and Astoria Federal Savings.

The compensation picture continues to evolve. In 2017, the German government agreed to set up a separate fund for material compensation for Holocaust survivors and heirs in Romania. In 2019, Germany also decided to extend payments to the spouses of Holocaust survivors, even after the survivor passes away.