Tucked into the hillside of this ancient port city is a sight few Israelis ever imagined they'd see in the Jewish state. It's a ...

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HAIFA, Israel —

Tucked into the hillside of the ancient port city of Haifa is a sight few Israelis imagined they’d see in the Jewish state.

It’s a simple, small housing shelter, converted from an old office building and not unlike ones for the homeless, drug addicts or battered women.

This facility, however, has a different clientele: Holocaust survivors.

The dozen or so residents are among those who more than six decades ago survived concentration camps or spent years as refugees fleeing Nazi persecution.

In Israel, many built prosperous, productive lives. But in old age, they’ve ended up broke, alone, sick or homeless, facing a choice between buying medicine or paying rent. Most have no remaining family; others have relatives unable or unwilling to help.

It’s a pleasant shelter, with sunny rooms, free medical care, hot meals and plenty of smiling volunteers. Paid for by the Helping Hands To Friends charity, it’s the first of its kind in Israel; a new 80-bed wing being built has a waiting list of 1,800.

Despite the gratitude of those living in the shelter, there’s also a sense of bitterness and betrayal. Residents ask how a nation established in part on their suffering could turn its back on their needs.

“We helped found the state of Israel and built it,” said Miryam Kremin, 88, who escaped a Polish ghetto as a teenager, leaving behind parents she never saw again. “They should make our final years better.”

Kremin did not apply for Holocaust reparations until recently because she and her husband, an engineer, didn’t need the money. But after he died, Kremin said she depleted most of her savings on rent and prescriptions.

Her room at the shelter has a homey feel, with a pink-flowered bedspread and purple curtains. But she said this isn’t how she envisioned retirement. “We’ve been through so much,” she said. “We deserve more.”

Retired house painter Joseph Kunstlich, 83, survived the Buchenwald and Auschwitz camps by mining coal, working assembly lines and doing whatever else the Nazis ordered him to do. He volunteered to fight in the 1948 war.

Unlike others at the shelter, Kunstlich never had a problem establishing his claim for Holocaust reparations. “You can’t fake this,” he said, holding out a forearm tattooed with a Nazi-issued ID number.

But medical bills absorb half his compensation of about $900 a month, and an attorney, he said, swindled much of the rest. “The attorney went to jail for 12 years, but I got nothing,” he said.

Soup kitchens

Poverty among Holocaust survivors in Israel is something of a dirty little secret. An estimated 70,000 survivors — one-third of those living in Israel — don’t have enough money to make ends meet, victims’ support groups say. The survivors show up in soup kitchens or government welfare agencies.

Tsipora Yaffe, 74, who escaped the 1941 Odessa massacre that killed her father, collects recyclable bottles from trash bins and off the street. “It’s humiliating,” said Yaffe, who does not live at the shelter. “But I close my eyes and do it.”

In a country where the Holocaust still shapes social and political debate, such stories stir anger. Advocates for survivors say that in the zeal to “never forget” those who died, the needs of survivors are being forgotten.

“As a member of Knesset and a citizen, I am ashamed of how the Jewish state has treated Holocaust survivors,” said lawmaker Moshe Gafni, chairman of the Knesset Finance Committee, after the government recently delayed implementation of expanded medical subsidies for survivors. “The treatment is disgraceful. (It) shames me and should shame all of us.”

Shimon Sabag, a former food vendor who founded the shelter, said he was stunned to discover how many Holocaust victims live in poverty.

“I always thought these people had been taken care of,” said the father of two, who started the Helping Hands charity, “Yadezer” in Hebrew, with a $1 million settlement he received after breaking his back in a work-related car accident.

He began with a soup kitchen in Haifa and noticed how many people in line had tattooed numbers on their arms.

“It gave me shivers,” he said. From there, his group began offering home food delivery and free medical and dental care.

In late 2008, he opened the 12-bed shelter, which quickly filled to capacity. With a donation from the German-chapter of the International Christian Embassy Jerusalem, construction began this year on the expansion next door. Work was suspended for lack of money.

With about half of Holocaust survivors older than 80 and dying at a rate of 35 a day, Sabag called the situation urgent. “We only have a short time to fix what we can.”

Not enough

The problem, according to Sabag and others, is that many survivors fall through the cracks or receive insufficient aid from Holocaust compensation programs, which are largely funded by $60 billion in German reparations and administered by the Israeli government and New York-based Conference on Jewish Material Claims Against Germany.

Many survivors living in Israel receive monthly payments ranging from $300 to $1,000. But as survivors age and experience increased health problems, the payments are no longer enough.

Holocaust survivors in Israel are twice as likely to experience chronic illnesses as other people their age and nearly half report trouble sleeping, according to one recent Israeli study. Sabag said 80 percent of those seeking beds at his facility need medication for Holocaust-related mental-health disorders.

Some Holocaust survivors receive no compensation, usually because they can’t provide proof. In some cases, survivors have been required to provide witnesses or documentation that they lived in a concentration camp for at least six months, or in a ghetto for 18 months.

“They make people go through hell to get the money,” said Orly Vilnai-Federbush, an Israeli filmmaker who has documented the plight of Holocaust survivors, including one woman who returned to Germany, where she found it was easier to obtain compensation.

After Holocaust survivors protested outside Parliament, the government in 2008 began a program to provide about $300 a month to those who could not qualify for other help. But bureaucracy and documentation remain daunting, critics said.

At 67, Shoshana Roza-Levy is the youngest resident at the shelter. Her claims were rejected because her parents fled Poland in 1939 and she was born in current-day Kyrgyzstan, where the Nazis didn’t reach. Still, her mother died of malaria as they lived as refugees and her father was drafted into the Russian army.

“They tell me I am not a Holocaust victim,” she said. “They make a mockery out of me.”

She said the rejection never mattered while her husband was alive. But after his death, she had a stroke and her stepchildren took over the apartment where she lived. Five years ago, she lost a leg to diabetes and lived in public hospitals or synagogue-affiliated shelters.

“So here I am, for the lack of any other option,” she said from her wheelchair. “My whole world is in this one room.”

The hot plate is a far cry from the well-stocked kitchen where she once baked cakes. And there’s no space to indulge her passion for painting, though the walls are covered with her work.

“To live with grace in a place like this, I should have been born 200 years ago,” she said.

$700 million

Israeli government officials say they are working to improve services, noting that they are distributing about $700 million this year to 87,000 survivors in the form of compensation and other benefits, including discounted health care. More than 35,000 people now receive monthly payments under the 2008 program, officials said.

“The state is certainly doing more for Holocaust survivors in recent years, although we would like to be able to do more,” said Ofra Ross, general manager of the Holocaust Survivors Authority at the Ministry of Finance.

Batsheva Sobelman of the Los Angeles Times’ Jerusalem Bureau contributed to this report.