The Verkhovna Rada and the Ministry of Social Policy are preparing a comprehensive overhaul of the social protection system. This involves reforming the subsistence minimum, the funded pension scheme, the rules for indexation and the calculation of benefits, as well as a review of special and military pensions. At present, these are legislative initiatives at various stages, rather than an approved package of changes.
Briefly about the main points
- Bill No. 13466 is intended to lay the groundwork for reform of the minimum subsistence level.
- The Rada is discussing the launch of the funded tier of the pension system.
- There are plans to update the procedure for calculating and indexing pensions.
- The review will focus on special pensions and benefits for military personnel.
- Basic assistance can combine several types of support for low-income families.
There are plans to decouple the minimum cost of living from various payments
The areas of reform were discussed at a working meeting between the Verkhovna Rada Committee on Social Policy and the Protection of Veterans’ Rights and the Minister for Social Policy, Denys Ulyutin.
Chair of the Committee Galina Tretyakova She pointed out that a large number of laws are linked to the subsistence minimum. As a result, a revision of this single indicator automatically affects various payments, fines, charges and other budgetary calculations.
Parliament is currently considering Bill No. 13466, which is intended to pave the way for an increase in the minimum subsistence level. The exact amount of the minimum subsistence level and the date on which the new measures will come into force are yet to be determined.
Accumulation, indexation and insurance record
The launch of the accumulation tier has been identified as one of the priorities pension system. Under this model, part of a citizen’s contributions will be accumulated in a personal account for their future pension.
At the same time, MPs and the Ministry of Social Policy are discussing the reform of the pay-as-you-go system, a new method for calculating pensions, improvements to the indexation system, occupational pension schemes and the enforcement of court rulings in pension cases. Discussions are also taking place regarding the rules for determining the retirement age, taking into account the length of insurance contributions.
The parameters of the funded pension scheme — in particular, the level of contributions, the terms and conditions governing the management of funds, and the launch date — must be laid down in legislation. Therefore, the preparation of the reform does not in itself entail any automatic changes to existing pensions.
Review of special payments and basic benefits
The committee also raised the issue of special pensions: the differences between categories of recipients, legal disputes concerning the maximum amount of payments, and compensation for previous periods. In the Verkhovna Rada, in particular, draft law No. 12278 on pension provision for staff of the Public Prosecutor’s Office is currently being considered.
Lawmakers are also to propose a new model for the pension provision of military personnel. Its aim is to retain the personnel potential of the Armed Forces of Ukraine and to narrow the gap between the benefits received by career military personnel and those received by mobilised combatants.
Another set of changes concerns basic social assistance for low-income families. It is intended to bring together support for low-income families, single mothers, large families, people not entitled to a pension, certain categories of people with disabilities, and children whose parents do not pay child maintenance.
The payment is to be calculated as the difference between the basic level set for the family and its average monthly income. The draft bill No. 15094 It has already passed its first reading; next, it must go through a second reading, a final vote and be signed into law.
The changes will depend on legislation and budgetary decisions
The reform comprises several initiatives that are at various stages of parliamentary consideration. In order to implement them in practice, it is necessary to finalise and adopt the draft laws, provide for funding in the state budget and approve the mechanisms for allocating funds.
It is only once these decisions have been taken that it will become clear what the payment amounts will be, who will be eligible to receive them, and when the new rules will come into force.
