Along with the amendments to the Tax Code, at the New Years Eve the MPs adopted over a dozen new additional laws. They have all been enforced. Among those was a document #3628 with an inconspicuous name “On amending a number of legislative acts of Ukraine”. But “Sevodnya” learned that this very document has deprived many Ukrainians of their benefits and social payments by amending 38 legislative acts.
First and foremost, this concerns the pensioners (the taxation of higher pensions with a 15% tax has been extended for 2016, while the working pensioners – public officials, judges, prosecutors, security forces – will not be receiving pensions at all); many children of the single-parent households were deprived of their benefits, the disabled children were deprived of free meals at state expense (they will be afforded by local budgets, if the funds are sufficient) and so on. The list of main social losses are provided in the Infographics.
A HIT ON PENSIONS. Additionally, the law deprived a number of employees of the right to early retirement, irrespective of age, provided they have a preferential work experience in their field (25 years). The novelty concerns two categories: the first one includes flight crew (pilots, flight engineer, navigators, stewards), test pilots – they are now entitled to a pension only after 50 years of age; the second one includes teachers, doctors, social workers, artists – they are entitled to a pension after 55 years of age.
And their preferential work experience shall be gradually increased by 5 years, or up to 30 years (for female aviators and flight attendants – up to 25 years) within the period from 2016 till 2024, which means a 6 month increase each year. According to Minister of Social Policy Pavel Rosenko, the state can no longer afford to provide for the 42-45 year old pensioners.
THE EXPERTS. The economists have not taken the novations positively. “The government has been cutting down living standards of the population for two years now”, Ivan Nikitchenko, the analyst of “Prostobank Consulting” says. ”At first, it seems that the 2016 budget should include the increase of minimum wage and living wage. Yet how will the growth in state treasury expenses be covered? They will be compensated for at the expense of the people’s living standards. I am appalled that the expenses are partially delegated to the local budgets. It means that the local authorities will be faced with a difficult choice: either to make social payments or to fund the road repairs, the school renovation”.
Nikitchenko believes that instead of cutdowns, an audit of the whole system of social payments and benefits is needed. “We need to conduct a complex reform – both of the pension system and the social payment system. It would allow us to employ the resources efficiently, instead of trying to patch the budget holes. For instance, we have to take the benefits away from the people with sufficiently high salaries and to check for fake beneficiaries”, he says.
Pavel Melnik, the analyst of the MPP Consulting Agency, believes that wage growth, as opposed to cutting down the benefits of the poor, would be the key to dealing with the crisis. “The higher the income, the higher the consumption. That means that the demand for goods is growing, which results in more shops, companies, business actively working. Thus, it would be more reasonable to raise the living wage up to 1900 Hryvna this year, considering that today the actual minimum monthly spending of a three-person family, including the goods and the utilities and accounting for inflation, constitutes 5900 Hryvna. Therefore, if the minimum wage in the country were 2500 Hryvna, the budget would receive more taxes, which would allow to avoid the social cutdowns”.