The government plans to abolish the subsistence minimum: a revolution in the social sphere or a foolishness?
19 August 2024 16:35
EXCLUSIVE
The Ministry of Labour and Social Policy of Ukraine plans to abolish the subsistence minimum and replace it with a new system of social benefits. This was announced by the Minister of Labour and Social Policy Oksana Zholnovych, reports "Komersant Ukrainian"
According to the minister, the new approach provides for an individual calculation of social benefits, taking into account the composition of the family. The main reasons for receiving assistance will be disability and poverty.
“We want to move away from the subsistence minimum. Fines, salaries, etc. are tied to it. It is very important for us to separate this,”
– zholnovych explained.
The subsistence minimum is a socio-economic indicator that defines the minimum level of income required to meet the basic living needs of an individual or family. It includes expenses for food, housing, medical care, clothing, transport and other needs. The subsistence minimum is set by the state and regularly reviewed in line with changes in inflation and the cost of living, which allows for social protection and support for the most vulnerable groups of the population.
The Minister stressed that the current subsistence minimum does not meet the real needs of citizens due to its low level. She believes that the introduction of the new system will have a positive impact on the social sphere and the economy as a whole.
However, experts have expressed doubts about the feasibility and expediency of such a reform.
Oleksandr Sytnikov, retired HACCU judge and director of the Centre for Accessible Justice, in an exclusive commentary 
criticised the initiative.
“This is just the minister’s illiteracy. The subsistence minimum is tied to wages and salaries, so it is almost impossible to do this. These are some populist or even PR statements.”
He emphasises that to implement such a reform, hundreds of laws and regulations need to be amended, which is an extremely difficult task:
“It is unrealistic. Firstly, no one will amend the Constitution. And there are about a hundred laws in the legislation that are linked to the subsistence minimum. How many laws are there on wages, pensions, and other issues? How does she imagine this process? This is a job that no government can do on its own. It’s just talk.”
Economic expert Andriy Novak is more reserved in his assessment. He emphasises that the subsistence minimum is now almost a key indicator on which the entire social policy of the state is based.
“The subsistence minimum in Ukraine is an indicator on the basis of which various social benefits are allocated, such as the minimum wage, social assistance to various categories of people, fines, etc.”
– the economist emphasises.
According to him, the hypothetical changes announced by the minister should still be based on a clear indicator, which is close to the subsistence minimum in its philosophy.
“If we replace the subsistence minimum, we need a substitute that will serve as a basis for calculating social benefits and fines. This could be, for example, a minimum wage or a minimum pension.”
He emphasised that the success of the reform will depend on how the new system will be built and what principles will be used to calculate social benefits.
Subsistence minimum in Ukraine
In Ukraine, the subsistence minimum is determined by a regulatory method based on the minimum consumer basket. This method takes into account physiological needs, the cost of housing and communal services and non-food items that make up part of the total expenditure. The subsistence minimum is determined per month per person and is differentiated by age and socio-demographic groups.
The subsistence minimum in Ukraine is approved by the Verkhovna Rada of Ukraine annually before the start of consideration of the State Budget. Since 2006, it has been set on the basis of a scientific and public expert review covering food, non-food products and services, and is revised in line with the growth of the consumer price index.
Currently, the general subsistence minimum in Ukraine is UAH 2,920, for children under 6 years of age – UAH 2,563, for children aged 6 to 18 years – UAH 3,196, for able-bodied persons – UAH 3,028, and for persons who have lost their ability to work – UAH 2,361.
