This practice probably began under Obama.
Via Washington Post:
The Aida refugee camp is a warren of alleys, a scene of frequent clashes between Palestinian youth and Israeli soldiers — and a welfare ministate.
A plaque at the entrance lists the names of 36 residents killed by Israelis whom the Palestinians call “martyrs” and the Israelis call “terrorists.”
Activists at Aida say that among the 5,500 residents at the camp are 500 Palestinians who are currently serving time in Israeli prisons or have been released.
Many of these prisoners, in jail and out, receive monthly payments from Palestinian authorities, while the families of those killed or severely injured by Israel get a stipend.
The Palestinians call these payments “salaries” or “social welfare benefits.” The Israelis call them “blood money,” designed not to help widows and orphans, but to incite Palestinians into attacking Jews.
Palestinian authorities have been paying prisoners for years, but the issue is now front and center as Israel presses President Trump to demand that Palestinians end the practice.
As the president prepares for his first foreign trip aboard, which will include two days in Israel and the West Bank next week, Israel’s right-wing government and its supporters in Congress are pressing the Trump administration to cut off aid to the Palestinian Authority unless the payments stop.