Prime Minister Vladimir Groisman promised to abolish “the taxation of pensions of working Ukrainians” and increase the size of payments from the first of October. These changes, explained in the Cabinet, will be possible as a result of pension reform. The website “Today” figured out how and when to change the pensions of Ukrainians.
How to change the size of the pension
“Our reform provides that on the first of October we will offer to cancel the taxation of pensions for working pensioners,” – said Vladimir Groisman. If the “tax” really canceltons, 650 thousand Ukrainians receive a pension in October about 17% higher. For example, if at the moment employed Ukrainians receive a pension in 2000 hryvnia, on the first of October it will increase to 2352 UAH.
The fact that under article 47 of the law “On state pension insurance”, working Ukrainians are only entitled to 85% of the earned pension. The rest is state. If after charging 15% of the working Ukrainian remains the pension less than UAH 1870 (150% of the subsistence minimum for the disabled), will be paid a full pension experts point out, the retention of 15% of the pension is not tax, and partial payment.
“The taxation of pensions is not taken into account, a pensioner or not. If a person works and has a pension greater than 150% of the subsistence minimum for the disabled, he pays 85% of the pension. It’s not taxation, it’s an incomplete payment,” – says senior researcher of the Institute of demography and social studies Lydia Tkachenko.
Income tax only pay Ukrainians pensions above 10 740 hryvnias. 18% is deducted from the part of pension that exceeds this amount. As explained by the website “Today” in a press-service of the government, Vladimir Groisman meant the abolition of partial payments.
“It is a populist things, each of which costs taxpayers additional funds. Apparently, because the budget of the Pension Fund as the result of an overfulfillment has extra funds. The abolition of the taxation of pensions – Yes, that’s good. What? When the Prime Minister says: the abolition of taxation, well, why are we introduced? It will be compensated, is consistent with the local budgets? Nothing bad is not here. I think that these populist things Groysman will put pressure on the Supreme Council, so they passed the bill. More importantly, and reform this document is not. Very many of my sexparty perceive these statements as the beginning of election campaign of Vladimir Groisman”, – believes the expert of the Reanimation package of reforms, member of the Board of the Pension Fund Galina Tretyakov.
“These populist things Groysman will put pressure on the Supreme Council, so they passed the bill. More importantly, and reform this document is not. Very many of my sexparty perceive these statements as the beginning of election campaign of Vladimir Groisman”, – believes the expert of the Reanimation package of reforms, member of the Board of the Pension Fund Galina Tretyakov.
In October, the pension will increase
In the framework of the pension reform, the government plans to increase pensions to nine million Ukrainians since the first of October. So, more than 1,000 hryvnia, rich 1.1 million pensioners. Increase from 900 to 1000 hryvnia unable to 487 thousand pensioners, from 700 to 800 UAH 460 thousand. A further 3.5 million Ukrainians pension will rise from 50 to 700 hryvnia.
Note, the request “Today,” the Pension Fund said in the budget for this year is “modernization” of pensions is not provided. “The budget are based on current legislation. Legislative decisions about the modernization level of pensions at the moment”, – said the Agency. Money on recalculation of pensions to plan for the expense of an overfulfillment of the budget of the Pension Fund.
In an interview with the Internet-editions Vice-Prime Minister Pavlo Rozenko said: “raising the minimum wage after the first month gave additional replenishment of the Pension Fund of 18%, that is, we are 18% collected more than was planned for January 2017. If we keep this momentum, if we see that the business understood that it is necessary to legalize and pay taxes… of course, we will take a decision about an additional increase of pensions, or about the “modernization” of pensions”.
What else will change after the introduction of the pension reform
ERUs will have to pay for all. As told “Today” in the Pension Fund, at the moment officials are considering the possibility to oblige to pay a tax to the pension Fund of all working Ukrainians without exceptions. “In the world applies the obligation of payment of insurance contributions for the whole working population. We’re still studying this and other methods. But there are methods, such as voluntary involvement, and compulsory payment”, – says Mykola Shambir.
Pensioners will be banned from working. According to the Minister sotspolitiki Andrey Reva, will affect not all Ukrainian pensioners, but only “the rich.” So, thousands of Ukrainians receive pensions of more than 10 thousand hryvnia, and some pensioners, for example, judges who on retirement receive more than 200 thousand hryvnia. Pensioners with high pensions, assume in the Ministry, can deny to work (then you have to choose: either salary or pension).
Experience will reduce, and it will be available. According to the law, in 2021-m retired can qualify for the Ukrainians with a total experience of no less than 30 years, those in the country only 8%. Insurance experience will be reduced to 15 years from the first of January 2018, announced in the Ministry. This will be an opportunity to buy itself 15 years of insurance experience. For 704 UAH per each month. In 10 years you will have to pay 84 480 hryvnias, and for 15 years, 126 720 hryvnia.