JERUSALEM — Israel's Health Ministry announced last week that it will transfer about 300 Holocaust survivors from psychiatric hospitals where they've lived for decades into hostels or old-age homes.

Two organizations, one that helps Holocaust survivors and the other that assists mental patients, welcomed the decision.

Health Minister Yehoshua Matza made the decision after hearing recommendations from a public committee established by the Justice and Health ministries several months ago to investigate claims of poor treatment of Holocaust survivors living in mental hospitals.

The committee, which must still present a final report, was appointed after an investigative report by the Ma'ariv newspaper. The article claimed almost 1,000 Holocaust survivors, confined to psychiatric institutions in stark conditions since the early days of the state, have been deprived of German reparations that are instead being held by Israel's General Custodian.

The Health Ministry has asked Amcha, the national center for psycho-social support for Holocaust survivors and their children, to help prepare rehabilitation plans for those patients who will be moved into the community.

Amcha director Jon Lemberger said most of the 300 survivors are currently living in private, rather than state-owned, institutions.

Shmuel Cohen, chairman of Enosh/Israel Mental Health Association, said that while moving elderly patients from hospitals where they have lived for decades to another place could be traumatic, it was "1,000 times better" to be granted better living conditions and to lose the stigma of being confined to a psychiatric institution.

Dr. Ze'ev Kaplan, head of the ministry's psychiatric services, denied allegations that some survivors who live in psychiatric hospitals are not mentally ill, but were put there because there was no other place for them.

"In some who have gotten older, the manifestations of active mental illness have waned, to be taken over by dementia and other problems of old age. They can be treated in nursing institutions, but this doesn't mean they didn't and don't suffer from mental illness," he said.

Under the plan, no survivor will be moved to an old-age home without permission from patients or their families.