Cabinet approves Pension Fund budget for 2021

The Cabinet of Ministers, Ukraine's government, has approved the budget of the country's Pension Fund for 2021.

This was reported by the Social Policy Ministry's press service.

Read alsoUkraine's Pension Fund reports on income since year's start

The total revenue of the Pension Fund's budget for 2021 is UAH 495.5 billion, or US$17.8 billion.

Its own income (taking into account the balance at the beginning of the year) is projected at UAH 327.96 billion (US$11.75 billion), including UAH 293.9 billion (US$10.5 billion) collected as single social security tax and allocated for compulsory pension insurance.

The total expenditures of the Pension Fund's budget in 2021 are expected at UAH 495.502 billion (US$17.76 billion).

State budget funds for pension programs will total UAH 195.3 billion (US$7 billion), including UAH 27.98 billion (US$1 billion) to be provided for the payment of a single contribution for certain categories of citizens.

Some UAH 167.3 billion (US$6 billion) will be spent on paying pensions, allowances and increased fees assigned under pension programs and on covering the deficit of the Pension Fund. Of these funds, UAH 145.3 billion (US$5.21 billion) is provided for the pension provision of military personnel, the payment of pensions, allowances and fees assigned under various pension programs; UAH 21.7 billion (US$777.8 million) is allocated for covering the deficit of the Pension Fund of Ukraine (which is UAH 16.7 billion, or US$598.6 million, less than in 2020); and UAH 360 million (US$12.9 million) is earmarked for the settlement of debts on pension payments from the budget under court rulings.

According to the report, the decision takes into account an increase in payments to 65-year-old retirees as of January and December due to a rise in the minimum wage, compensation payments to persons who turn 80 and those who are 75 years old, as well as an increase in pension payments due to the growth of the cost of living as of July and December of the current year. It also allocates funds for the indexing of pensions under the Law of Ukraine on Compulsory State Pension Insurance.

National budget for 2021 and pensions

• On December 15, 2020, the Verkhovna Rada, Ukraine's parliament, passed the country's budget for 2021. In the 2021 budget, the deficit of the Pension Fund's own revenues was capped at UAH 26 billion (US$936.3 million).
• On the same day, December 15, 2020, Finance Minister Serhiy Marchenko, while commenting on a question from a lawmaker about cutting the Pension Fund's expenses by UAH 8 billion (US$288 million) in preparation for the second reading of the draft budget for 2021, said there were enough funds in the 2021 budget for payment of pensions.
• Pensions are to be increased by 11% as of March 1, 2021. In April, pensions for working pensioners are to be automatically recalculated, taking into account the amount of salaries or wages, as well as the length of service.
• Starting from January 1, 2021, Ukraine has increased pensions for certain categories of pensioners. In particular, pensions have risen by UAH 300 (US$10.75), to UAH 2,400 (US$86), for those who are over 65 years old and whose employment term is 30 years for women and 35 years for men. This rise is pegged to the minimum wage in Ukraine, which will be increased for the second time as of December 1, 2021, and accordingly, pensions for that category of pensioners will grow again, from UAH 2,400 (US$86), to UAH 2,600 (US$93).
• In addition, in 2021, Ukraine will see the minimum pension grow twice (by 9.3% in total) along with the growth of the living wage for persons who have lost their ability to work.
• On January 27, the Cabinet of Ministers approved a bill on the indexing of pensions for all pensioners as of 2022, which will be submitted to parliament for consideration.