The Cabinet of Ministers proposed a reform of the calculation of the living wage

Photo: money (Vitaliy Nosach, RBK-Ukraine)

Instead of a living wage in some spheres, they will use the “base value”

The Cabinet of Ministers approved a bill on streamlining the system for calculating the size of the subsistence minimum, social benefits, cash payments and duties and fees for the provision of administrative services (administrative fee). It is proposed to change the calculation methodology.

The corresponding draft resolution was adopted during a government meeting on January 27, which was broadcast on Youtube-channel of the Cabinet.

The draft act is proposed from January 1, 2022:

  • improve the methodology for the formation of the subsistence minimum. The cost of non-food goods and services is proposed to be determined by the structural method based on the established ratio of the cost of food sets and the cost of non-food goods and services in the structure of the subsistence minimum (in the structure of the subsistence minimum, the share of the cost of food sets and non-food products is 50/50%, respectively)

offered:

  • change the estimated value of the subsistence minimum for payments that are non-basic incomes of citizens, such as increases, additional payments and allowances, to the base amount for social payments for children and the base amount for social payments to the population, which are supposed to be reviewed twice a year;
  • to define unified approaches to calculating allowances, increases and other payments with the provision of their annual (at least 2 times a year) increase;
  • to calculate penalties and administrative penalties, use the base amount for monetary payments and penalties, and to calculate the amount of fees for the provision of administrative services (administrative fee) – the base amount for administrative fees.

As noted in the explanatory note to the project, the basic state social standard, on the basis of which state social guarantees are determined, is the subsistence minimum. Today, the real cost of living is more than twice the legislatively established one.

More than 150 different types of payments are tied to the size of the subsistence minimum, which has a significant impact when planning the expenditures of budgets of all levels. Some of these payments have nothing to do with the subsistence minimum as a criterion of poverty (for example, fines, monetary penalties for administrative, criminal and other violations).

“Consequently, any increase in the living wage leads to an automatic recalculation of a significant number of payments and the need for additional expenditures of budgets of all levels,” the document says.

As RBC-Ukraine reported earlier, the Cabinet of Ministers approved minimum salary in 2021 in government agencies. The minimum salary will be 4540 hryvnia. According to the law, the minimum salary cannot be less than two times the subsistence minimum for able-bodied persons established by law.

We will remind, from December 1, 2020 in Ukraine increased living wage up to UAH 2189. Social and labor payments depend on its size.

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