What you can afford on the minimum pension in Ukraine: why so little

Ukrainian pensioners will be more affected by the sharp inflation over the past few years. After the fall of the economy, in 2015 the indexation of pensions “frozen”, the minimum wage in this year’s aggregate inflation “caught up”, but the minimum pension is still significantly behind. The vast majority of pensioners receive less than 1500 UAH per month, while the consumer basket, according to estimates by the Ministry, costs the Ukrainians of 3,200 USD. The website “Segodnia” find out what you can afford on the minimum pension in Ukraine.

Modestly to eat a month or buy a 1/3 pair of shoes

In Ukraine the minimum pension 1247 hryvnia lives of almost 400 thousand pensioners. This amount can eat modestly for a month. Retirees can afford once a day to buy bread, chicken legs and a few times a week cheap cereals and pasta. But personal hygiene remains very tight budget, expensive shampoos, toothpastes with such a pension is not affordable. Besides, even retirees with a subsidy you have to spend money on utilities and travel. On average, after the required minimum spending on day “existence,” the pensioner remains exactly 30 hryvnia. Also, not included is another item of expenditure: for drugs.

Photo: archive

The minimum pension will also be enough for exactly 12 trips to the cinema (though it will have to starve, and at cinema to walk) or to purchase $ 45.

To buy new clothes or shoes, even if the total savings, with a minimum pension is almost impossible. Cheap modern brands of women’s shoes will cost three minimum pension. The only solution is to look for shoes in second-hand stores.

Retired from Krivorog Horns Raisa Alekseevna last time you bought clothes in 2011 year, the woman gently wears old clothes and asks kids to give her for the holidays, shoes and jackets. “I have a pension of 1300. Children sometimes help, there is a cottage with a vegetable garden. During summer, try less money to spend, and in winter – more necessary. But, of course, very hard. What to udelat? It’s hard on everyone, we survive somehow,” says the pensioner.

By the way, as the “Segodnia” in the Pension Fund, the vast majority of Ukrainians are retired receive pensions below the subsistence minimum. In Ukraine, there are 11.9 million pensioners, of 6.1 million receives less than 1500 UAH per month.

Not all poor pensioners

At the moment in Ukraine is not appointed retired more than 10.7 thousand hryvnia. However, all pensions above this amount that have been assigned to the current restrictions remain in force. For example, as described in the Pension Fund, now retired more than 20 thousand UAH receive 2.2 million people. Mostly retired judges. 19 thousand pensioners receive more than 10 thousand hryvnia.

In the last year of high pensions in Ukraine are taxed, but at the moment this rule is cancelled. In 2014, the taxes needed to pay pensions over 10 thousand UAH, and in 2015 the threshold is decreased to 4134 hryvnia (three minimum wages). Such pensioners in the country was more than 416 thousand. The Ministry of Finance decided, after the abolition of 15% tax on high pensions, the budget is about 800 million hryvnia.

In addition, as senior researcher of the Institute of demography and social studies Lydia Tkachenko, the judges, who will retire this year, the restriction “no greater than 10.7 thousand in retirement” will not feel – for them the constitutional court, this rule was canceled.

“People are irritated by this inequality. When the bulk gets 1500, roughly speaking, the average pension is now somewhere in 1850 hryvnia, and the judge gets 21 thousand. What the judge retired to our poor country for all that… then Let all 21 thousand to pay. Somehow it does not work. Whatever measure of responsibility for their work, they’re retired, they do not work. This responsibility is already there – why should I pay 20 thousand? Moreover, the constitutional court removed him for the maximum size limit”, – says scientist.

Photo: archive

The pension system in Ukraine is another “injustice”. Retirees who previously retired receive less money. In 2008, the ratio of length (a measure that is taken into consideration at calculation of pensions) increased from 1 to 1.35, the old pensions are not counted, and new steel assign to the new indicator.

Why Ukrainians are getting meager pensions

The Pension Fund deficit this year will reach 141 billion. The main reason for the shortage is low salary. Ukrainians from each paycheck to pay social contribution at the rate of 22%, the money is redistributed between existing pensioners. Thus, of the 16 million employed Ukrainians dues are paid only 10 million (the others have the right not to do so).

Thus, ten working Ukrainians must contain 11 pensioners. And the situation will only get worse. According to estimates of the Institute of demography in 2050, in Ukraine the ratio of workers to pensioners will be at 10 to 15.

According to various estimates, up to 60% of employers pay part of the salary in the “envelope”, and social contributions not paid full amount. Problems of pension reform – part of the consequences of the shadow economy, experts say.

For the retirement pension women need to work 30 and men 35 years. As calculated in the Ministry of social policy, the Ukrainians with the minimum wage over a lifetime did not earn even the minimum pension.

So, on average Ukrainians live after 60 years of 18. To obtain the minimum pension of 949 hryvnia (such pension was in 2015), you need to save 204,9 thousand hryvnia. Thus for the rest of my life with this level of salaries of men could save all 194,3 thousand, and women of 166.6 thousand UAH (according to 2015).

“In 2017, the ratio of the amount paid from the minimum wage to the amount of received pensions by employees will be: for women: 94,09%; for men: from 109.77%. The situation compared to 2016 should significantly improve”, – noted in the Ministry.

“In 2017, the ratio of the amount paid from the minimum wage to the amount of received pensions by employees will be: for women: 94,09%; for men: from 109.77%. The situation compared to 2016 should significantly improve”, – noted in the Ministry.

Note, the minimum pension this year will increase several times: in may 1247 to 1312 hryvnia, and in December – up to 1373 UAH. The minimum wage in January will be 1544 hryvnia, in may 1624, the hryvnia, and in December – 1700 UAH. However, after that Ukrainians will receive significantly less than their neighbors.