In 2024, Ukraine plans to make changes to the indexation of pensions, which will affect the majority of Ukrainians. Although the increase will be significant, it will not solve the accumulated problems of the pension system. What can Ukrainians expect next year?
What will pensions be like in 2024?
It is currently unknown what pension indexation will be in 2024. The planned annual increase, due in March 2024, will be carried out under the new rules. It is currently unknown what these rules will be. “We plan to make this indexation, like the entire solidarity system, more fair, understandable and transparent,” Prime Minister Denis Shmyhal said back in September 2023 during a government meeting.
Exact plans for what this increase will be are not yet known. In a conversation with OBOZ.UA, experts noted that the explanation of the accrual of points for length of service is difficult to understand: now in the formula for calculating pensions there is a coefficient of experience, therefore, by indexing the pension by a certain percentage, length of service is also taken into account. The Ministry of Social Affairs has not yet presented the formula. It is likely that the Cabinet of Ministers will have to submit a corresponding bill to the relevant committee of the Rada.
OBOZ.UA contacted the Ministry of Social Affairs for comment, asking for clarification of plans for indexation next year, but at the time of publication we had not received a response. However, the corresponding project was not registered (there is no information about it on the resources of the Verkhovna Rada).
If the system of increases that is currently in place is maintained, then the size of pensions on average could increase by 15.2% in March. The exact figure is currently unknown, because for this the Pension Fund must calculate the average salary from which contributions were paid for the last three years. Inflation rate statistics must also be calculated.
For example, if the size of your estimated pension is 5 thousand UAH, then after indexation in March next year its size will increase to 5760 UAH. But this will only happen if the indexing formula is not changed. For now, judging by the statements made earlier by the Ministry of Social Affairs, they will introduce a monthly assessment of length of service. The salary for each month will be compared with the average salary in the country. As a result, each pensioner's assessments will be converted into points. The longer you worked and the more you earned, the larger your pension will be. At the same time, a more worthy increase can be expected next year.
For example, if your estimated pension is 10 thousand UAH, and not 5 thousand, then, probably, instead of an increase of 760 UAH you can count on 1520 UAH. That is, you will receive 11,520 UAH, not 10 thousand. The problem is that some Ukrainians have a lot of experience, but they received small salaries. As a result, even with, for example, 40 years of experience and a minimum salary, the calculated pension amount will be at the minimum level (2093 UAH).
In this regard, the law provides for certain increases depending on age. For example, if you are 65 years old and have met the service requirement, your minimum pension cannot be less than 40% of the minimum salary. Now it is 2680 UAH, from January next year - 2840 UAH, and from April - 3200 UAH. The increase will occur due to a revision of the minimum wage in Ukraine.
Pensioners are suing over low pensions: against the Pension Fund and even their own children
In Ukraine, low pensions are a problem that cannot be solved by simple indexation. It is necessary to bring the labor market out of the shadows, raise wages, launch a funded pension system, and for this, build a strong and sustainable economy. However, pensioners who have already received payments, unfortunately, will not see fundamental changes.
OBOZ.UA studied the register of court decisions. Sometimes pensioners who do not have children to help them are forced to demand payment of alimony through the court. According to the Family Code, parents must support their minor children, and adult children, if necessary, are obliged to financially help parents of retirement age.
For example, the Tarashchansky district court in the Kyiv region ordered a woman to give her father a quarter of all her income for the rest of her life. A lawsuit with such a demand was filed by the father himself, who claims that he needs help, but his daughter does not help at all. We are talking about court case No. 2/379/268/23.
In September 2023, a Ukrainian filed a lawsuit against his daughter demanding alimony. He explained his claim by saying that he spends his pension on medicine and barely has enough for food. A man lives alone. And in August he underwent surgery, for which he spent 25 thousand UAH. “He spends most of his pension on medicine, so he barely has enough money for food. In connection with this, he asks the court to collect from his daughter alimony in his favor in the amount of a quarter of her monthly income to maintain her financial situation, health and life,” the case file says.
In almost all cases, parents of retirement age won and received alimony from their children. To do this, it is enough to prove that the children do not help their parents, and the pension is not enough for basic needs.
Another way to “increase” your pension is to file a claim with the Pension Fund. Kiev lawyer specializing in pension legislation, Tamila Shatarskaya, says: with the recalculation of military pensions, there is already an established practice of the Supreme Court, which is guided by the courts of first and appellate instances. The courts, for the most part, take the position of the plaintiffs and return additional payments, which for some reason are canceled in the Pension Fund. The easiest way to increase your pension is for a military man: he has the right to recalculate taking into account the salaries that the military currently receives. And this is many times more than before a full-scale war.
And although the government promises to make the recalculation of pensions in 2024 more fair, in fact, the large-scale problems of the pension system will not be solved by recalculating payments.
