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Pensions growth in Ukraine: Key trend of recent years

This year the five-year term of office of the current president and the Verkhovna Rada expires. Candidates for the presidency traditionally promise to increase pensions after the elections.
We, in turn, can assess how much pensions have grown over the past 5 years and what significant changes in pension legislation have occurred during this time.
Pensions are rising
As is known, in 2014-2015, the growth of pensions was frozen for objective reasons. They were not recounted at all in December 2013 – September 2015. In 2015, they even introduced a tax on pensions. But over time, the situation stabilized, and since the end of 2015, the size of pensions began to grow gradually.

Traditionally, pensions are increased at least twice a year due to an increase in the cost of living. In 2014, the size of the subsistence minimum and the minimum pension was 73 USD. In 2019, this figure is 53 USD.
At the same time, the average pension decreased from 109 USD in 2014 to UAH 98 USD as of January 2019.
The next mass recalculation of pensions took place on March 1 of the current year. Someone pensioners get additional 71 cents to their pensions, while the other get additional 17,8 USD.
Therefore, the draft of the relevant resolution of the Cabinet of Ministers was finalized so that each retiree received an increase of at least 3 USD.

According to the Pension Fund of Ukraine, 8,97 out of 11,47 million pensioners have felt a real increase in pensions.
The supplementary pension in March amounted to:
up to 3 USD – for 1,991,457 people;
from 3 to 14 USD – for 2,536,385 people;
from 14 to 17 USD – for 798,016 people;
from 17 to 25 USD – for 761,140 people;
from 25 to 35 USD – for 425 537 people;
more than 35 USD – for 2,459,824 people.
In addition, more than two million citizens, together with the March pension, received a one-time surcharge of 43 USD (before the elections). These people will additionally receive  43 USD in April (after the elections).
We are talking about pensioners with full length of service (20 years for women and 25 years for men who retired before October 1, 2011, and 30 years for women and 35 years for men who retired after October 1, 2011) but at the same time, the size of their pensions as of March 1 did not exceed 59 USD (this is 40% of the minimum wage in Ukraine, set as of January 1, 2019).
The government claims that this is not a pre-election move. They say that this is the debt on indexation of pensions for previous years, which we managed to pay off due to additional budget revenues.
But the question arises why this debt was paid only to two million pensioners out of eleven?
 
For one reason or another, 2.5 million pensioners were left without any increase at all. This is due to the peculiarities of the calculation of certain pensions and the previous stages of indexation.
The retirement age is growing, preferential pensions are canceled. Against the background of more or less positive statistics regarding the pensions, it is necessary to remember that the retirement age for women continues to grow (up to 60 years). Previously, in order to retire at 60, it was enough to have 15 years of actual service. Since last year, the bar has increased to 25 years. This year it takes 26 years. This increase would take place until 2028 when retirement would require at least 35 years of the actual service.
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This column does not necessarily reflect the opinion of the editorial board or 112.International and its owners.  
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