The Essen court said that German welfare authorities are to run a backdated audit of pension claims, based on a 2009 court ruling in favor of three Holocaust survivors who had demanded a pension after being forced to work by the Nazis.
At the time, the federal court had decided that Nazi victims were entitled to pension payments for work they were forced to carry out in ghettos during World War II.
The ruling was also applied to people who had only been paid by receiving food and other gratuities for their work. Until then, such claims had failed in cases where people did not receive wages from their German occupiers.
The Nazis had forced Jewish residents of many German and eastern European cities to live in ghettos, which were cordoned-off and starvation-ravaged zones, before being sent to death camps.
The social welfare court in Essen is responsible for all pension claims from former ghetto residents who now live in Israel.
The court estimated that roughly two thirds of all claims would now be approved. Until now, 90 per cent of all claims were rejected.
In total, the pension authorities are faced with around 70,000 claims, of which 30,000 emanate from Israel.
During World War II, the Nazis extensively exploited forced labor because a large part of the German male workforce was doing military service.