Significant changes are being prepared in Ukraine regarding social standards — the minimum living wage is set to be modernized, focusing on the actual expenses of citizens. This involves raising the amount to 10–12 thousand hryvnias, which significantly exceeds the current level.
This is reported by Finway
New Approach to Calculating the Minimum Living Wage
According to the initiative, the minimum living wage in Ukraine will no longer be a formal indicator, but will become a real financial basis for determining the minimum wage, pensions, and other social payments. It is expected that the new measures will link the minimum wage and pensions to the updated minimum living wage, and the increase in these standards will occur gradually, taking into account the financial capabilities of the budget and progress in the de-shadowing of the economy.
The head of the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, Danilo Hetmantsev, stated in a media comment that a draft law has already been submitted to unlink the minimum living wage from the salaries of judges, prosecutors, and other categories of civil servants. According to him, a package of four laws aimed at changing the approach to social standards is currently under consideration by the parliament.
“I am convinced that this should be done right now. A law has already been submitted to unlink the minimum living wage from the salaries of judges, prosecutors, etc. In total, there are four laws in the package. They are already in the hall and are being voted on,” Hetmantsev noted.
Main Changes and Their Impact on the Economy
According to Hetmantsev, unlinking the minimum living wage from the salaries of civil servants will reduce the burden on the state budget and increase the transparency of the system. The approach to calculating the minimum amount for living will also change: “We must tell people — here is the amount on which one can actually live. And it is not two thousand hryvnias and not even eight thousand. In fact, the consumer basket needs to be modernized. In Ukraine, one can live on 10-12 thousand hryvnias,” emphasized the member of parliament.
According to the new rules:
- the minimum wage and non-taxable minimum must meet real living needs;
- minimum pensions, including those for disability, will be gradually increased, depending on the financial capabilities of the budget;
- the growth of social standards is directly related to the processes of de-shadowing the economy, particularly revenues from the tobacco industry.
Hetmantsev emphasized that increasing the minimum living wage will contribute to economic development, as the growth of the population’s purchasing power stimulates domestic demand, supports businesses, and creates new jobs. This, according to him, is more effective than state cashback programs. If the minimum pension is raised immediately to 4.5 thousand hryvnias, the necessary resources will appear due to more effective tax administration and the de-shadowing of the economy.
The main changes anticipated include:
- unlinking the minimum living wage from the salaries of judges, prosecutors, and civil servants;
- updating the consumer basket and establishing a real minimum at the level of 10–12 thousand hryvnias;
- linking the minimum pension and non-taxable minimum to the new minimum living wage;
- gradual increases in social payments within the budget’s resources and due to the de-shadowing of the economy.