For the First Time in Ukraine, the Pension Fund Budget Allocates Separate Funds for Payments Based on Court Decisions

For the first time in history, the budget of the Pension Fund of Ukraine (PFU) will allocate separate funds specifically for payments based on court decisions regarding pensions. This innovation aims to address significant arrears, which have now reached 85 billion hryvnias. In the vast majority of cases, these debts arose because citizens sought to have their pensions increased retroactively through the courts.

This is reported by AgroReview

Payments Based on Court Decisions: A New Approach

According to the new procedure, funds for executing court decisions in the area of pension provision will be distributed based on funding sources. In particular:

• Payments financed from the state budget relate to “special” pensions, which are specifically supported by state funds.
• Payments financed from insurance contributions pertain to regular pension allocations.

Over the past five years, due to legislative conflicts, ambiguous judicial practices, and courts interpreting changes in social legislation as “narrowing the rights and freedoms of citizens,” the number of court decisions regarding pensions has increased more than 26 times: from several tens of thousands to 758 thousand cases. The state has already paid out the majority of the awarded amounts; however, the remaining debt currently stands at nearly 85 billion UAH.

“As a result of legislative conflicts, heterogeneous judicial practices, and courts interpreting any changes in social legislation as ‘narrowing the rights and freedoms of citizens,’ over the past five years, the number of court decisions regarding pensions has increased more than 26 times – from several tens of thousands to 758 thousand. The state has already paid more than half of the amounts awarded by court decisions. Nevertheless, the amount of debt that has yet to be paid currently stands at nearly 85 billion UAH,” wrote Marchak.

Unified Payment Procedure and Transparency of the Process

Payments based on court decisions will henceforth be made according to unified rules: for both current payments after pension recalculations and for retrospective payments for previous years. All recipients will receive payments simultaneously, proportionate to the funds available in the PFU budget for that specific month. This significantly differs from the previous practice, where payments could be postponed indefinitely.

Information about all decisions made by the Pension Fund to execute court decisions will be available on the PFU portal and will be reflected in the personal account of each pensioner. The relevant resolution has already come into effect, and technical preparations for its implementation are currently underway.

It is worth noting that the state has only been able to settle debts for those court decisions that came into effect before November 20, 2020. Other cases remain “in line” for payment. To address this issue, the government has approved a unified procedure for making pension and supplement payments awarded by court decisions.