Ukraine

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Situation and Priorities

Social protection situation

Disclaimer

The Russian invasion of Ukraine that started in February 2022 has caused massive disruption of economic activity in Ukraine and catastrophic damage to infrastructure, environment and livelihoods of the Ukrainian people. 
As of end 2022, there is no sign of ending the war. The situation is still highly unpredictable and is likely to remain uncertain in the near future. The following summarize the issues in the pre-war time. Depending on the future course of war and post-war recovery, the key issues in the Ukrainian social protection system as well as the priorities of the ILO technical assistance may shift considerably.

Ukraine has seen declining social security expenditure over recent years, although non-contributory social benefits are projected to increase.

The Ukrainian pension system has undergone significant transformations in recent years, including increasing the female retirement age from 55 to 60 years in 2011, and increasing the contribution period required for the minimum pension by 5 years for both sexes. The reform measures implemented in 2014 and 2015 continue to tighten benefit eligibility conditions and restrict benefit payments. Further reforms include the introduction of a mandatory funded pension tier, and reducing the minimum pension level to 40% of the minimum wage.

The single social contribution rate has been reduced significantly, placing additional fiscal pressure on the State budget to cover the widening financial deficit, that will likely lead to additional cuts in benefit entitlements.  There is also a tendency to transform universal or categorical social benefits to means-tested benefits targeted to low-income families. Universal child benefits have been abolished, with the Government planning to further expand targeted social assistance for low-income families.

Ukraine initiated a transformative healthcare reform in 2016, resulting from a recognition that public spending on health was insufficient, public resource allocation inefficient and unequal, and the practice of informal payments for healthcare widespread. A centrepiece of the reform is the introduction of a benefit package that clearly defines the healthcare benefits guaranteed to all by the Government. The package gives priority to primary care, but also includes emergency, outpatient, inpatient and palliative care.

COVID-19 and other crises

In response to the COVID-19 pandemic, Ukraine introduced a series of measures to alleviate the negative impacts of the crisis. Additional spending on health sector amounted 0.9% of GDP; additional spending on non-health sector amounted 2.5% of GDP. Social protection measures were a crucial part of integrated responses.

  • Unemployment benefits were paid without a personal visit to the employment centre from the first day after registration. The minimum amount of unemployment benefit for the quarantine period was increased from UAH 650 ($24) to UAH 1,000 ($37) per month. The partial unemployment benefits have been provided to employers among small and medium-sized enterprises that have stopped or reduced their activities due to quarantine. 
  • All employees have the right to compensation (temporary disability benefit) for lost earnings for the period of stay in health care facilities, as well as in self-isolation under medical supervision. The amount of temporary disability benefit is at 50% of the average wage regardless of the length of service (estimated number of recipients 5.8 million).
  • The Government introduced a payment to support children of individual entrepreneurs for the period of quarantine plus one month. About 300,000 families received this social assistance in the amount of the subsistence minimum (for children under 6 years - UAH 1,779 ($66); for children aged 6 to 10 years UAH 2,218 ($82).
  • The Government expanded social support for low-income people who have lost their jobs during quarantine. About 100,000 citizens received social assistance ranging from UAH 2,800 ($104) to UAH 3,020 ($112).
  • The government introduced one-off cash assistance of UAH 1,000 ($37) for 10 million pensioners who have a pension up to UAH 5,000 ($185) and about 600,000 beneficiaries of state social assistance to: persons with disabilities from childhood and children with disabilities; persons who are not entitled to a pension and persons with disabilities; persons who have reached retirement age, but are not entitled to a pension.  

Social benefits are the main source of income for many Ukrainians, especially pensioners, persons in need of social care, and families with children. The Ukrainian government has been making commendable efforts to continue the payment of pensions and other social benefits to the Ukrainian people who had to leave home, including the introduction of some new benefits for the internally displaced persons (IDPs) and a 40%-increase on all social benefits. 

At the same time, international organizations are providing emergency cash assistance programmes. In the short-term these temporary humanitarian interventions are critical for the Ukrainian IDPs and refugees meet their immediate needs. In the longer perspectives, the country will face a huge task in rebuilding a sustainable and shock-resilient social protection system.

Government and social partner priorities
  • Implementing the ILO Social Security Minimum Standards Convention No. 102, that was ratified with respect to all nine branches in 2016.
  • Extending the coverage of the contributory social insurance by increasing employment particularly for youth and women, and improving compliance by combatting informality and undeclared work. This will strengthen the revenue structure of contributory social insurance systems.
  • Implementation or adjustment of the second-pillar pension system.
  • Building a consensus based on a national dialogue by all stakeholders.

The Ministry of Social Policy is considering a reform of the pension system, introducing a mandatory funded pension pillar, and has reached out to the ILO to ensure that the introduction of the new pillar(s) to the system is aligned with the principles and benchmarks established by ILO social security standards.

ILO Projects and Programmes

Funding gaps / Support the ILO

US$ 500,000

Rebuilding a sustainable and shock-resilient social protection system, especially designing a pension system which complies with the international standards and contributes to the reconstruction of Ukraine in the long run

Support the ILO

ILO Experts

IMG
Nina Krgovic
National Project Coordinator
Blerim Murtezi
National Project Coordinator
Sergiy Savchuk
National Coordinator