The lack of efficient steps by the Cabinet of Ministers of Ukraine leads to deeper problem with accumulation of debts on social benefits as provided by the social insurance legislation. This is stated in the inquiry to Prime Minister Volodymyr Hroisman filed by OPPOSITION PLATFORM — FOR LIFE MP Serhiy Lovochkin. The politician demands that the Cabinet takes immediate steps to eliminate the arrears.
“I demand taking immediate and comprehensive measures aimed at eliminating the social benefit arrears,” the inquiry reads.
The MP wrote that the lack of efficient measures by the Cabinet of Ministers of Ukraine aimed at overcoming the economic crisis and minimization of its social consequences has led to significant aggravation of the problem with arrears on social benefits as provided by the relevant law, including illness payments, maternity leave payments, recourse obligations, insurance payments in cases of fatalities and others. Many citizens have been waiting for months to receive the payments from the Social Insurance Fund.
As of mid-April 2019, the Fund’s indebtedness on temporary incapacity allowance alone reached 1.6bln hryvnia, and the payment schedule lags one month behind. Another significant indebtedness of the Fund has accumulated in maternity leave payments and burial allowances.
The amount of indebtedness has been growing together with the delay in payments. While in February people would wait for a month for their social insurance allowances, in April the waiting period increased to 1.5 months. At the same time, the legislation provides for a 10-day period.
“Experts say this problem might further aggravate in the near future, first of all due to higher deficit of the Fund’s budget. The main reason behind this is unprofessional steps by the government on revisal of the unified social tax rate, which revisal had not been supported by appropriate compensatory mechanisms. Another factor is adoption by the Cabinet of economically unsound budget of the Social Insurance Fund, the reserves of which had been lowered by 11 times compared to previous year (from 337.9mln to 30.4mln hryvnia). Yet another reason for the social allowance problem aggravation is the government’s attempt to ‘plug the leaks’ in the Pension Fund by lowering a share of the unified social tax (UST) that had been allocated to the Social Insurance Fund,” Lovochkin explained.
The MP believes that the principal solution for the problem of social allowances arrears lies in consistent and professional reform of the UST system and should include: introduction of economically sound rates for the UST, eradicative improvement of its administration system, comprehensive measures on legitimization of shadow wages and more.
“At the same time, the budget of the Social Insurance Fund for current year must be corrected in a way that covers the existing arrears and prevents indebtedness of social allowance payment in the future. The solution should also cover the problem of wage arrears that has accumulated up to date,” the inquiry reads.Follow @serhiylovochkin