Limiting coefficients for the largest pensions have been introduced: what it means and who will be affected
Kyiv • UNN
Ukraine is introducing limiting coefficients for pensions exceeding UAH 23,610. The restrictions will not apply to combatants and military personnel who have been defending the country since 2014.
Ukraine has introduced restrictive coefficients for special pensions. This means limiting pensions, which today can be 60, 80 or even 100 thousand hryvnias and above. The restrictions will not apply to people who have been fighting at the front or have participated in the defense of the homeland since 2014. This was reported by UNN with reference to the Ministry of Social Policy.
The Ministry of Social Policy stated that today the pension system has accumulated imbalances that make the system unfair and non-transparent, and reduce both trust in the pension system and motivation to pay the unified social contribution in society.
The Ministry of Social Policy said that, in particular, three important bills have already been developed to help correct the shortcomings of current legislation and establish greater fairness in the pension system. These are draft laws on the modernization of the PAYG pension system, the introduction of funded pensions, and social insurance reform.
In addition, several important steps have been taken in the State Budget Law.
"In particular, given that the pension system must ensure the payment of pensions to all Ukrainians without exception in the context of very limited financial resources due to the war, the Law "On the State Budget for 2025" approved the norm on the application in 2025 of restrictive coefficients to pensions that are 4 or more times higher than the average pension in the country, or 10 subsistence minimums for disabled persons," the statement said.
In particular, we are talking about limiting pensions, which today can be 60, 80 or even 100 thousand hryvnias and above.
"Important: the restrictions will NOT apply to the pensions of people who are currently fighting at the front or participated in the defense of the homeland from Russian aggression since 2014. At the same time, the limiting coefficients will reduce the huge difference between the so-called "special" and general pensions," the Ministry of Social Policy informs.
Pursuant to the law "On the State Budget for 2025," the Cabinet of Ministers adopted a resolution that defines the size of these coefficients.
According to the resolution, pensions exceeding 10 subsistence minimums (including those determined by court decisions) will be subject to reduction factors.
The mechanism will work in such a way that the higher the pension amount, the higher the coefficient will be applied:
⦁ a coefficient of 0.5 will be applied to the part of the pension that exceeds 10 subsistence minimums (UAH 23,610) and does not exceed 11 subsistence minimums (UAH 25,971);
⦁ to the part of the pension that exceeds 11 PM (UAH 25,971) and does not exceed 13 PM (UAH 30,693) - 0.4
⦁ to the part of the pension that exceeds 13 PM (UAH 30,693) and does not exceed 17 PM (UAH 40,137) - 0.3
⦁ to the part of the pension that exceeds 17 PM (UAH 40,137) and does not exceed 21 PM (UAH 49,581) - 0.2
⦁ to the part of the pension exceeding 21 PM (UAH 49,581) - 0.1.
"Thus, the differentiation of pension amounts remains, but, taking into account the realities of wartime, limited funding and, most importantly, the fairness and proportionality of pension calculation, the above restrictions will be applied in 2025," the Ministry informs.
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In addition, the Ministry of Social Policy emphasizes that the restrictions will apply only to the amount of payment that is NOT the insurance part of the pension (i.e., for which no insurance contributions were paid), but is an additional payment from the state for work in certain security or other structures.
"About 17.6 thousand "special" pensioners will be affected by the rule," the statement said.
The Ministry also points out that the decision to introduce the limiting coefficients was made in the law "On the State Budget for 2025", since it is the state budget that finances all expenditures on special pensions.
The restrictions are due to the existing financial constraints caused by martial law. At the same time, the insured (i.e., covered by insurance contributions and guaranteed by the Constitution) part of pensions will be paid without restrictions; the coefficients are applied only to the part of the payment that is not covered by contributions and is an additional "privilege" from the state for certain professions and/or categories of persons. Thus, by its decision, the Government implemented the provision of the Law by defining the mechanism for applying the coefficients.
