Court Overturns Pension Indexation Reduction Factors: Implications for Retirees

Court Rules Cabinet of Ministers Decree Provision Unlawful

According to ХВИЛЯ: A court has invalidated a provision within Cabinet of Ministers Decree No. 209, which had implemented reduction factors for indexing pensions granted after 2019. This decree had mandated the application of lower indexation coefficients for pensions calculated using new average salary indicators. This ruling addresses a long-standing grievance within Ukraine's pension system regarding the fairness of annual adjustments.

Lawyer Andrii Dzis challenged the provision of Decree No. 209 in 2025. The court has obligated the Cabinet of Ministers to publish the operative part of the decision once it enters into legal force. His firm has been successfully litigating cases in favor of pensioners since 2024. Consequently, for the March 2026 indexation, the Cabinet set a base coefficient of 1.121 for most retirees. However, for pensions granted between 2021 and 2025, lower coefficients ranging from 1.61 to 1.24 were applied, with the maximum increase capped at 2,595 hryvnias.

Impact of the Decree on Pensioners

Commenting on the situation, Dmytro Korsun noted:

“One pensioner’s indexation is calculated more fairly, while another’s is effectively cut due to the reduction mechanism.”

He also emphasized that

“this is no longer just public outrage; it is a position that is finding support in the courts.”

Due to Decree No. 209, certain additional payments were not itemized in protocols but were instead included in the overall calculation. The difference between a pensioner's current payment and the amount after a court-ordered recalculation can exceed 4,000 hryvnias per month, highlighting the decree's significant impact on retirees' financial well-being.

This legal precedent set by the court could substantially alter the situation for many pensioners affected by inequitable indexation mechanisms. Restoring fairness to pension payments may reduce social tension and improve the financial stability of many Ukrainians who depend on their pensions. The importance of this decision underscores the need to review and reform Ukraine's pension system to prevent similar issues in the future.