A severe financial crisis at UNRWA (United Nations Relief and Works Agency for Palestine Refugees) has triggered sweeping austerity measures, forcing Palestinian refugee families and employees across the Near East into impossible financial decisions. The agency’s $200 million funding shortfall has resulted in a 20% reduction in salaries and working hours for thousands of staff, creating a ripple effect of hardship that extends far beyond its employees.
The human impact is starkly illustrated by Manal*, an English teacher at a UNRWA school in Jordan. Facing a $280 reduction from her monthly $1,400 salary, she made the agonizing decision to cancel her children’s health insurance, saving $84 but leaving the family vulnerable to medical emergencies. ‘We are not talking about luxuries. We are talking about securing milk and bread,’ she told Middle East Eye, highlighting that the deduction forced her to ‘sacrifice our children’s health security just to feed them today.’
This personal crisis reflects a systemic collapse in the making. UNRWA Commissioner-General Philippe Lazzarini described the cuts as a ‘last resort’ to avoid total agency collapse. The financial strain stems from two major donors suspending funding in 2024, representing nearly one-third of the budget for national staff salaries. Consequently, the agency entered 2026 with a cash-flow shortfall exceeding $220 million despite previous austerity measures.
Beyond individual hardship, the cuts threaten to paralyze essential services. The Jordanian UNRWA workers’ union warns of impending educational collapse with reduced lesson hours, 200 eliminated jobs, and severe classroom overcrowding. Health services face similar degradation, with clinics closing on Saturdays and reduced hours jeopardizing thousands of patients. Approximately 60,000 refugees risk losing periodic cash assistance, a critical lifeline for survival.
Many Palestinian refugees perceive these measures as part of a broader political effort to dismantle UNRWA and undermine the right of return. Azzam Abu Khalid, a 67-year-old resident of Husn camp, stated the agency represents ‘international recognition of our displacement and of our right of return.’ Kazem Ayesh, head of the Jordanian Society for Return and Refugees, echoed this sentiment, viewing the cuts as the ‘beginning of the actual dismantling’ designed to push refugees toward Jordanian government services and effectively erase their refugee status.
UNRWA spokesperson Jonathan Fowler acknowledged the ‘significant impact on staff and their families’ but maintained the decision was an ’emergency attempt’ to prevent total collapse and mass layoffs. While describing global funding prospects as ‘bleak,’ he emphasized that restoring donor support remains the key to reinstating previous service and salary levels. The Jordanian government, which has historically supported the agency, views UNRWA as a crucial institution backing the Palestinian right of return and has repeatedly confronted attempts to liquidate it.
With staff now fearing further cuts to savings and end-of-service benefits, and the union hinting at potential ‘open-ended strikes,’ the survival of an agency serving nearly six million registered refugees hangs in the balance.
*Name changed to protect identity