Illegal salary in an envelope: how it will reduce your pension and insurance rights

Illegal salary in an envelope: how it will reduce your pension and insurance rights

Receiving a salary in an envelope can significantly affect the insurance record and pension rights of Ukrainians. Since July 1, 2000, Ukraine has been operating a system of personalized accounting that allows tracking work experience and the accrual of pension contributions. However, when employees receive their salary unofficially, it affects their future pension provision.

Requirements for insurance record

The right to a pension at the age of 60 in 2025 will depend on the insurance record. To qualify for a pension at 60 years old, one must have at least 32 years of experience, at 63 years old - 22 years, and at 65 years old - 15 years. It is important to note that by 2028, the minimum record needed to retire at 60 will be 35 years. Therefore, those who work without official registration risk not achieving the required record to receive a pension.

Additionally, starting January 1, 2028, with 40 or more calendar years of record, a pension will be granted regardless of age. This means that employees who receive their salary in an envelope not only lose the opportunity to accrue a pension but also cannot avail of social insurance rights.

• No pension accrual;
• Risk of dismissal without compensation;
• No right to vacation;
• No sick leave;
• No unemployment benefits;
• No payment for work on weekends and holidays;
• No guarantees of occupational safety.

Thus, choosing illegal work may lead to serious financial consequences in the future, including a decrease in the standard of living upon retirement. It is important to be aware of the risks associated with receiving a salary in an envelope and to choose legal forms of employment to ensure one's rights.

Therefore, the issue of receiving a salary in an envelope is critically important for Ukrainians, as it directly affects their social security and financial stability in the future. Given the planned changes in pension legislation, employees should be aware of the consequences of illegal work to avoid serious financial losses. Legal employment is not only a right but also a necessity to ensure a decent standard of living in old age.