Pensions at real prices: the Rada proposes to tie payments to the “actual” subsistence minimum

Pensions at real prices: the Rada proposes to tie payments to the “actual” subsistence minimum

In Ukraine, they plan to change the method of determining minimum pensions and social benefits. For this purpose, bill No. 15166 has been submitted to the Verkhovna Rada, which provides for amendments to the Law of Ukraine «On the Subsistence Minimum». The document proposes to introduce the «actual subsistence minimum» for calculating the amounts of minimum pensions, social benefits, and state assistance.

Funding is proposed to be ensured by reducing appropriations from state and local budgets in terms of setting the maximum wage level for all civil servants maintained from state or local budgets, as well as increasing tax revenues to the state budget due to reduced labor costs.

In the explanatory note, the authors state that the current subsistence minimum provided for by the state budget does not reflect the real expenses of citizens. In particular, the indicator for 2026 in the amount of 2,595 UAH for persons unable to work does not cover basic needs taking into account current prices for food and medicines.

«The definition in the Law of Ukraine «On the State Budget of Ukraine for 2026» of the subsistence minimum per person for persons unable to work in the amount of 2,595 hryvnias has nothing to do with the state’s attempt to realize for persons unable to work their constitutional right to a sufficient standard of living», - indicate the initiators of the document.

According to the Ministry of Social Policy, the actual subsistence minimum calculated by the ministry monthly is approximately three times higher than the official indicator. However, this indicator is not currently used.

The bill proposes to enshrine the use of the actual subsistence minimum per person to ensure the state’s constitutional guarantee of a sufficient standard of living for persons unable to work when calculating the minimum pension.

The authors of the bill emphasize that the purpose of the changes is to implement the provisions of Article 46 of the Constitution of Ukraine regarding the guarantee of a sufficient standard of living for persons unable to work when determining the minimum pension and other social benefits for vulnerable groups of the population.

At the same time, the document states that the implementation of such changes will require additional expenditures from the state budget. Among the sources of coverage, it is proposed to review salary expenses in the public sector, in particular, to introduce restrictions on the salaries of heads of state enterprises and to optimize budget expenditures.

In particular, according to the authors, additional funds can be attracted at the expense of

- limiting appropriations from state and local budgets in terms of determining the maximum wage level for all civil servants who receive funds from state or local budgets;

- increasing tax revenues to the state budget by reducing expenditures on wages, namely:

- setting maximum wage levels for the management of state enterprises, state joint-stock companies in which the state’s share is at least 50 percent;

- reducing the wages of members of supervisory boards of state enterprises, state joint-stock companies in which the state’s share is at least 50 percent, establishing the possibility of accruing bonuses to the management of state enterprises and joint-stock companies exclusively depending on the presence of profits of the enterprises (joint-stock companies), as well as conducting restructuring (write-off) of the debt of the state budget of Ukraine to the National Bank of Ukraine (175 billion UAH).