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Along with the budget for 2021, Ukraine received new social standards, inflation targets, and even subsidies for public services. Read about how to correctly understand the decisions of parliamentarians and what they will lead to: read the OBOZREVATEL material.
Subsidy funding cut, you will have to pay more for community services
In 2021, UAH 36.6 billion will be allocated for grants. This is almost 400 million less than in 2020. And this despite the fact that the Cabinet of Ministers has already announced an increase in electricity rates, each month they recalculate gas rates, unlocking the opportunity to increase rates for heating and hot water.
In a word, the costs of public services will increase and less and less money will go into subsidies. In this case, there are three options: either the income of the population will grow, or the beneficiaries will be monitored more closely and violators will be eliminated, or the amount of subsidies will be reduced.
Probably in 2021 Ukrainians face three options at once… Instead of 15% of the total family income, it will be possible to donate 20% to the communal floor. That is, the size of the personal payment will increase (immediately after quarantine). For example, if the total income of your two-member family is 10,000 UAH and you have to pay 2,000 UAH for a communal apartment, now the subsidy will be about 500 UAH, and in 2021 you may completely lose the right to it.
Pay increases canceled: money for pensions will not be enough
The Cabinet of Ministers, as OBOZREVATEL already wrote, postponed the increase of the minimum wage to 6.5 thousand UAH from July to December 2021. And this means that the Ukrainians with the minimum wage (mainly public sector employees) will receive several thousand hryvnia less.
Also, the Cabinet of Ministers for the second reading decided to abandon the increase in teachers’ salaries. As of January 1, 2021, the minimum wage for a teacher should have increased to at least 2.5 living wages. (6,810 UAH), but it was left at the level of 4,455 UAH.
Nor did they increase the salaries of doctors, as requested by the Ministry of Health. Now young doctors have to go to hospitals for a salary of 6-7 thousand UAH. At the same time, they are called to Poland for the same job, but for a salary of about 100,000 UAH. To stop the outflow of personnel during a pandemic, Health Minister Maxim Stepanov proposed increasing the salaries of doctors, up to 23 thousand, of nurses, up to 17 thousand, and of nurses, up to 12 thousand UAH. The Cabinet disagreed with this. We will see the consequences in the near future.
This was done on the recommendation of the IMF, which persistently recommended cutting spending. And the Cabinet agreed.
Note that the income to the Pension Fund (PFU) also depends on the size of the salaries. As former Minister of Social Policy Andrey Reva told OBOZREVATEL, about 40% of all employees pay minimum wage taxes. The main reason is that the rest is paid in envelopes. Therefore, with an increase in the minimum wage, income per PFC also increases.
PFC budget reduction: not enough money to modernize
In addition, the deputies decided to cut the budget of the Pension Fund by 8.5 billion UAH. This, with a decrease in economic activity, special conditions for individual entrepreneurs will lead to a catastrophic shortage of funds in the Fund. Consequently, it will be necessary to cancel those increases that are not clearly detailed in the law.
For example, the modernization of pensions in March, despite active criticism, was never enshrined in law. And Finance Minister Sergei Marchenko has already hinted that instead of March, payments can be increased by 11% later. This step will be reflected in the majority of retirees. Due to the postponement of the promotion, they will receive their money later.
“Chosen” were not touched
And here is the budget on public debt, in the Verkhovna Rada, they didn’t cut the president’s office. In addition, prosecutors were added 2 billion to the second reading, for the expenses of the Verkhovna Rada, compared with previous years, an additional 500 million UAH was allocated.
The maintenance of each deputy in 2021 will cost the Ukrainians 6 million UAH. This amount includes all expenses: from salaries and to the cost of a fleet of cars and printing of documents. Usually expenditures in the Verkhovna Rada will amount to 2.5 billion UAH, although last year they were at the level of 2 billion UAH.
In addition to salary, deputies are also entitled to the costs of performing their functions (expenses in the amount of one more salary), as well as compensation for renting an apartment (about 19 thousand UAH per month), 25 living wages for attendees (as of 2021 this 56.7 thousand UAH).
And although the budget itself can still be revised a year from now, it can already be said from it: the cabinet sacrificed the interests of the Ukrainians to obtain another loan from the IMF. And truly protected items – for the expenses of the deputies themselves and for the service of external debts. And they will take 40% of the total income.
