The minimum wage and subsistence level will increase: what the Cabinet of Ministers proposes in the budget for 2016

16 September 19:10

ANALYSIS FROM

The Cabinet of Ministers proposes to raise the minimum wage and the subsistence level starting next year. This is included in the 2026 budget. The subsistence minimum is proposed to be set at UAH 3,209, an increase of UAH 289. The minimum wage is to be raised from UAH 8,000 to UAH 8,647.

At the same time, economists estimate that today the subsistence level should be UAH 10-12 thousand, and the minimum wage should be twice as high. How will the life of Ukrainians change after such innovations, found out [Kommersant].

The subsistence minimum in the draft state budget for 2026 is proposed to be raised to UAH 3,209 for the first time in two years. The last time it was raised was in 2024, when it was UAH 2,920.

The subsistence minimum for the main social and demographic groups of the population:

children under 6 years old – UAH 2,817
children from 6 to 18 years old – UAH 3,512;
able-bodied persons – UAH 3,328;
persons who have lost their ability to work – UAH 2,595 (this figure determines the minimum pension amount);
persons who have lost their ability to work and receive a supplement for living in areas of radioactive contamination by court order – UAH 1,600.

The minimum wage will increase by 8% – from UAH 8,000 to UAH 8,647.

The minimum wage should be twice as high

Discussions about raising the minimum wage and the subsistence minimum have been going on for a long time, but to no avail. For example, in July of this year, unionized trade unions appealed to the Cabinet of Ministers to increase payments. The government replied that there were no grounds to revise the budget figures at the moment – “macroeconomic indicators remain unchanged, and a possible increase in the minimum wage requires additional calculations and consideration of the impact on business.”

Last week, representatives of the Ministry of Finance, the JRB of Trade Unions and employers even held an online meeting on the draft State Budget for 2026. Deputy Minister of Finance Dmytro Samonenko emphasized that spending on the security and defense sector remains a priority. Trade unions noted that after financing defense, the state must ensure an adequate level of social protection for citizens. Particular attention was paid to raising basic social standards:

subsistence minimum for able-bodied persons – at least UAH 11,675
minimum wage – UAH 12,195 (i.e. 50% of the projected average wage, not UAH 8,000 as it is now, of which an employee receives only UAH 6,160 after taxes).

Trade unions emphasized that the current social standards do not correspond to the real level of prices and the needs of the population. The minimum wage is almost one-third less than the actual subsistence level (UAH 11,259 at May prices), so Ukrainian salaries lag far behind the real cost of living. And this is not only a social problem, but also a violation of the current General Agreement and failure to comply with the European Directive on adequate minimum wages.

An increase that will not change anything

On the one hand, it seems that the unions’ request has been heard. Well, almost. The minimum wage has been raised. But these three hundred hryvnias are a drop in the bucket, it doesn’t change anything, says sociologist Yuriy Havrylechko. It will not help people survive.

These amounts do not solve anything. It seems that the government has just slightly changed the numbers in the table that everyone has long been accustomed to. The minimum wage and the subsistence minimum should correspond to current realities. The subsistence minimum is currently about 11-12 thousand hryvnias, based on monthly calculations by the Ministry of Social Policy. And the minimum wage cannot be lower than this subsistence level, multiplied at least twice. After all, the subsistence minimum is meant for those who are not working. Therefore, an increase of a few percent is practically nothing. It is impossible to live on UAH 3,209, as well as on a salary of UAH 8,647,” Yuriy Havrylechko emphasized in a commentary to [Kommersant].

“If the subsistence minimum is formally rising, but prices for goods and services (especially housing, energy, and transportation) are growing even faster, the real value of benefits and salaries will fall. But if the subsistence minimum rises, social benefits (pensions, allowances, subsidies) also increase.

Promises without money

Economists point out that raising social standards is good, but these are promises. These are plans. And there is no money.

Of the more than $45 billion needed, only $30 billion is available. And 15 billion is missing. We are talking about dollars, mind you! If there is no $15 billion, the question immediately arises: what will happen to the exchange rate and other indicators. All of this is extremely interconnected,” said Oleh Pendzyn, a member of the Economic Discussion Club, in a commentary for ua.news.

“The state needs to have the funds to raise the subsistence minimum and social payments for it. If state revenues are insufficient, it may increase the budget deficit or force the government to look for other sources – tax increases, cuts in other expenditures, experts say.

Meanwhile, the Cabinet of Ministers has approved a regulation on a new allowance for civil servants. In addition to monthly (up to 30% of salary) and quarterly (up to 90%) bonuses, an annual bonus is now added – “for individual results.” Payments are promised no later than December.

Here’s how the minimum wage grew: