Ukraine

DRC Legal Alert: Issue 74, November – December 2021 [EN/UK]

Attachments

1. Cabinet Adopts Framework for Accrued IDP Pension Debt Provision

Background: There have been two main scenarios under which the government accrued debt for nonpayment of IDP pensions:

i) The missing period from the start of the conflict until it is restored when a person registers as an IDP;

ii) IDP pension is suspended again after the initial restoration. Since 2014, there have been several waves of massive suspensions of hundreds of thousands of pension payments in addition to individual suspensions. The suspension practices were subsequently declared unlawful by the Supreme Court on the grounds of arbitrariness and indirect discrimination of IDPs.

In both cases, even after the payments are restored, IDP pensioners can only access payments accrued after the restoration decision. As for the payments for the ‘missing periods’, they are to be computed by the Pension Fund and ‘paid under a special procedure to be established by the Cabinet’, as provided under Cabinet Resolution No. 365. Such restriction was declared1 unlawful by the District Administrative Court of Kyiv for the arbitrary restriction of IDP access to a pension. The Cabinet, however, de-facto ignored the Decision of the Administrative Court and continued to hold the ‘to be paid through a special procedure’ stand with regards to the accrued IDP pensions. In recent times, the development of such a procedure has been included in the Draft Law On the Principles of State Policy of the Transition Period2 and overseen under the National IDP Integration Strategy 2024. The total government debt on account of this is estimated to be 90 billion UAH.

Recent Developments: In November 2021, the Cabinet issued Resolution No. 1165 adopting a procedure (framework) for the payment of accrued IDP pension (instalment payments). Below are the crucial accrued pension payment terms:

• Payment Basis: To be paid on a monthly basis [in addition to regular pension payments] only to those applicants who have been included on a special list of accrued IDP pension payment recipients. To receive the payment in the particular year, the person has to be added to the list by 1 January of the year;

• Payment Size: Equals the living wage for persons who have lost their ability to work as of 1 January of the respective year – 1,934 UAH in 2022. This amount is final and includes all the premiums. However, the size of the payment may increase or decrease depending on funding – see below;

• Special Budget Link: Payments will be made from a separate national budget line item, even if granted under a court decision. Size of the arrear payment depends on the budget funding:

  • if the line is insufficient, the payment is to be proportionately decreased for all the IDPs receiving the arrear pension payment;

  • If the budget exceeds the spending plan, the payments can be proportionately increased;

An increase/decrease in the instalment payments does not affect the total size of the pension debt and the entitlement. The payments are to be conducted until the entire debt is covered.