Pension Indexation 2025: Why the Promised 13% Could Turn into 8%.

In a recent interview, Ukraine's Minister of Social Policy Oksana Zholnovych discussed her plans regarding the pension system and social payments for 2025. Pension expert Serhiy Korobkin analyzed her statements and shared his conclusions.

According to the minister, there is money for pension payments since the Pension Fund's budget is formed separately from the state budget. However, Korobkin notes: 'If the Pension Fund's budget is already around 700 billion UAH per year, then the unified social contribution – is only two-thirds. Another nearly 300 billion UAH goes to the Pension Fund's budget from the state budget as subsidies.'

The minister talks about the need for pension reform, including the introduction of an accumulative system and a point system. But the expert expresses doubts about the realism of these plans: 'Without a normal economy during wartime, there are no guarantees that this will work. Zholnovych argues that after our victory, the economy will start to grow. But it's obvious to me that a fool enriches himself with thoughts.'

Regarding the indexation of pensions in 2025, the minister warns that the increase will not be significant. Korobkin comments: 'According to the forecasts laid down in the explanatory note to the budget project and my personal calculations, the indexation will be 13% at best. But last year we were also promised 13%, and only 8% came out.'

Regarding subsidies, Zholnovych claims that there will be no problems with their payment. But Korobkin points out that spending on subsidies is planned to be reduced by almost 20% from 50 to 42 billion UAH, according to the 2025 budget project.

The expert also draws attention to the fact that utility payment benefits for war veterans, military personnel, Chernobyl victims, and other categories of citizens in 2025 may be in question: 'In the draft Budget Law, like the indexation, it states that this will now be determined not as prescribed in the specific laws, but as the Cabinet of Ministers decides.'

Korobkin also criticizes the approach of the Ministry of Social Policy: 'And here is the large-scale resilience project that the government is actively promoting, increasingly leading me to think that the Ministry of Social Policy is gradually turning into the Ministry of Psychology.'