Contribution to PEGASE in Support of Social Protection (Social Allowances) 2017 for 2018

Contract partner: EC - European CommissionCountry: Palästinensische Gebiete Funding amount: € 1.500.000,00Project start: 01.11.2017End: 31.12.2018

Short Description:

Overall goal

The overall objective of this temporary EU support is to maintain the viability of the two-state solution by avoiding the fiscal collapse of the Palestinian Authority (PA) and sustaining basic living conditions of the whole Palestinian population.

Expected results

The overall objective of this special measure is to maintain the viability of the two-state solution by avoiding the fiscal collapse of the Palestinian Authority and sustaining basic living conditions of the whole Palestinian population. The specific objective is to support the Palestinian national development agenda and in particular:

(1) to support the Palestinian Authority to deliver to the Palestinian Population essential basic services by maintaining the functioning of the administration;

(2) to improve the economic opportunities of poor, vulnerable and isolated population; and

(3) to support the Palestinian Authority in reducing its budget deficit and implementing its reform agenda while increasing the Palestinian Authority's

transparency and accountability.

Target group / Beneficiaries

The Austrian transfer contributes to Component 2. The target group comprises poor and vulnerable Palestinian families in the West Bank and the Gaza Strip. The Austrian contribution may benefit approx. 40,000 people (roughly 6,660 families).


The EU will contribute to the quarterly payment of social allowances to poor and vulnerable Palestinian families through the Palestinian Authority's national cash transfer programme (CTP) that functions in the West Bank and the Gaza Strip. The objective of this activity is to ensure the continued assistance to Palestinian families living in extreme poverty, who are dependent on financial aid from the Palestinian Authority. This activity also reinforces the reform of the social protection system and the social cohesion among Palestinians. Without prejudice to the overall level of budgetary allocation for the CTP, determined by the PA, and the individual level of funding for vulnerable families, determined using proxy means testing on equal basis for the beneficiaries in the West Bank and Gaza, EUR 20 million out of the overall amount under

Component 2 will be used to increase the EU's contribution to social allowances specifically in Gaza.


The overarching objective of the EU's support to Palestine is to contribute to maintaining the viability of the two-state solution. The multi-annual programming document for 2017-2020 is currently being prepared and is expected to be adopted in the second half of 2017. In the meantime, this special measure serves the purpose of ensuring continuity of the PEGASE Direct Financial Support (DFS) to the Palestinian Authority, thereby sustaining the delivery of basic services to the entire Palestinian population.

Through PEGASE DFS, the EU has contributed substantially to the recurrent expenditure of the national budget (over EUR 2 billion since 2008), with systematic, predictable and unconditional contributions to the payment of Palestinian Authority civil servants' salaries and pensions (PEGASE DFS "Civil Servants and Pensioners" (CSP) programme), of social allowances to the poorest and most vulnerable Palestinians families (PEGASE DFS "Vulnerable Palestinian Families" (VPF) programme), and, since 2013, of health referral bills through the PEGASE DFS "East Jerusalem hospitals" (EJH) programme. Through this programme, the EU provides crucial funding to avoid the collapse of those hospitals, which are amongst the few remaining Palestinian institutions in East Jerusalem and are providing key medical services to the Palestinian population. PEGASE DFS has contributed substantially to state building, as well as to the social cohesion, economic and security stabilisation of the Palestinian territories.

project number2562-00/2017
source of fundingOEZA
sector Andere soziale Infrastruktur und Leistungen
modalityBasket funds/pooled funding
marker Gender: 1, Poverty: 2
  • Policy marker: are used to identify, assess and facilitate the monitoring of activities in support of policy objectives concerning gender equality, aid to environment, participatory development/good governance, trade development and reproductive, maternal, newborn and child health. Activities targeting the objectives of the Rio Conventions include the identification of biodiversity, climate change mitigation, climate change adaptation, and desertification.
    • 1= policy is a significant objective of the activity
    • 2= policy is the principal objective of the activity
  • Donor/ source of funding: The ADA is not only implementing projects and programmes of the Austrian Development Cooperation , but also projects funded from other sources and donors such as
    • AKF - Foreign Disaster Fund of the Austrian federal government
    • BMLFUW - Federal Ministry for Agriculture, Forestry, Environment and Water
    • EU - Funds of the European Commission
    • Others - various other donors are listed in ADA’s annual business report.
  • Type of Aid – Aid modalities: classifies transfers from the donor to the first recipient of funds such as budget support, core contributions and pooled programmes and funds to CSOs and multilateral organisations, project-type interventions, experts and other technical assistance, scholarships and student costs in donor countries, debt relief, administrative costs and other in-donor expenditures.
  • Purpose/ sector code: classifies the specific area of the recipient’s economic or social structure, funded by a bilateral contribution.
  • Tied/Untied: Untied aid is defined as loans and grants whose proceeds are fully and freely available to finance procurement from all OECD countries and substantially all developing countries. Transactions are considered tied unless the donor has, at the time of the aid offer, clearly specified a range of countries eligible for procurement which meets the tests for “untied” aid.