Impact of Pension Indexation in Ukraine in 2024
Inflation, devaluation, an increase in the minimum wage and the subsistence minimum — all of this affects pension provision. The government claims that indexation will protect Ukrainian pensioners from the negative effects of inflation. But how will this recalculation help pensioners and how will the increase affect the overall economic situation in the country? Focus research.
Pension indexation in Ukraine in 2024 is scheduled for March 1. The estimated size of the indexation will be 13%, but exact figures will be determined in February based on relevant statistical data.
Among economists, there is no consensus on the need for indexation. Some believe that an increase in social benefits is necessary to stimulate consumer demand, while others warn of possible negative consequences.
Pension indexation is provided for in Article 42 of the Law «On Compulsory State Pension Insurance». In accordance with the law, for the purpose of pension indexation, a recalculation of previously established pensions is carried out each year from March 1 by increasing the indicator of the average wage (income) in Ukraine, which is taken into account for calculating the pension. The indicator of the average wage in Ukraine is increased by a coefficient that consists of 50% of the growth in consumer prices for the previous year and 50% of the growth in the average wage for the three calendar years preceding the year of increase.
