What the Muslims did by striving in jihad against the hated French colonialism is a great deed, and we ask Allaah to have mercy on those of them who were killed, and to accept them as martyrs.
Everyone who took part in this jihad of the Muslims deserves to be praised, and what the state has done of honouring them and their children is one of its responsibilities towards these heroes. They are the ones who deserve to be honoured, not the players, actors and singers whom most nations – unfortunately – hasten to honour and bestow gifts upon.
Based on that, this does not come under the heading of consuming people’s wealth unlawfully, rather it is one of the duties of the state. But the state should also take care of the poor and needy. It should give to them, honour them and ensure work and provision for them. If they fall short in that, it does not mean that what the mujaahideen and their children take from the state is haraam.
The Prophet (peace and blessings of Allaah be upon him) commanded the one who was given wealth by the ruler or the state, without him asking for it or hoping for it, to accept it.
If he is in need, he may spend it on himself and his family, and benefit from it. If he does not need it, then he should benefit his poor and needy brethren with it by giving it in charity. Thus he will benefit his brothers and benefit himself with the reward for charity.
Al-Bukhaari (7164) and Muslim (1045) narrated that the Messenger of Allaah (peace and blessings of Allaah be upon him) used to give wealth to ‘Umar ibn al-Khattaab (may Allaah be pleased with him),and ‘Umar would say to him: O Messenger of Allaah, give it to one who is more in need of it than me. The Messenger of Allaah (S) said to him: “Take it and keep it or give it in charity. Whatever comes to you of this wealth when you are not hoping for it or asking for it, take it, otherwise do not hanker after it.”
Based on this, those about whom you ask may take this money. If they are in need of it, they may benefit from it, and spend it on themselves and their families. If they are well off and do not need it, then they should give it in charity, and that will be provision for them in the Hereafter, as well as benefiting their needy brothers.
And Allaah knows best.