Draft Law No. 14364 on Minimum Pension Increase
A bill proposing a significant increase in Ukraine's minimum pension has been registered in the Verkhovna Rada. Draft Law No. 14364 outlines a plan to raise the payment in stages throughout 2026, ultimately reaching 7,374 hryvnias. This proposal comes as the current minimum pension is set at just 2,595 hryvnias, an amount which, according to the head of the tax committee, Danylo Hetmantsev, covers only 35% of what is needed for basic survival. Funding this initiative would require an additional 108.3 billion hryvnias in 2026 alone.
Proposed Schedule and Funding Concerns
The proposed schedule for raising the minimum pension is as follows:
- 1 January 2026: 2,595 hryvnias,
- 1 April: 3,282 hryvnias,
- 1 July: 4,791 hryvnias,
- 1 October: 7,374 hryvnias.
However, experts have expressed serious doubts about the feasibility of this plan. Dmytro Korsun, a lawyer with the 'Legal Network' company, stated that
"this money is insufficient to buy medicine and pay utility bills"and highlighted the "extremely low" likelihood of a substantial pension hike happening soon. This skepticism reflects broader concerns about Ukraine's fiscal capacity amidst ongoing economic challenges.
To finance the increase, the bill's authors have suggested several potential sources, including:
- formalizing the shadow economy,
- recovering funds from tax evaders,
- cutting non-essential expenditures,
- securing grants from international partners.
The viability of these measures remains uncertain given the country's current economic pressures.
While raising the minimum pension is a critical goal for social protection, the draft law's implementation raises concerns over financial risks. The proposed funding mechanisms require thorough analysis and realism checks, considering Ukraine's complex economic situation. The outcome of this debate will significantly impact the welfare of millions of pensioners in the country.