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Kharkiv Human Rights Group Social Networking



14. Social and economic rights

[1]

1. General overview

A social state is a type of state and organization of public life public aimed at promoting social values, ensuring due conditions for dignified life and free development of personality. A social state is, first of all, oriented at common welfare, both for the entire society and for its individual members. It must secure adherence to the principle of social justice. Practical implementation of the social state principles is possible due to well-grounded and efficient social policy.

Lamentably, Ukraine remains a far cry from the aforementioned standards. Despite the fact that our country is defined as a social state by the Constitution, its actual characteristics testify to the contrary. Poverty of the working population, low living standards, huge discrepancies between the life of the rich and the poor are indicators pointing at serious problems in the area of social and economic rights.

The majority of the problems calls for substantial long-term reforms, but so far political will and readiness for their implementation is evidently lacking.  

For example, the changes in the structure and content of the “consumers’ basket” have been under discussion for over 10 years. This indicator serves as a bottom line in defining main characteristics of the social security, i.e. minimum cost of living, basic salary and pension. But the issue is still addressed only verbally. Moreover, the indicators deriving from the financial capacity of the state are still in use.   

The quality of life of the Ukrainian citizens is also affected by the safety level of the food products and drinking water. Despite certain steps undertaken by the state in the respective legal field, so far the situation has not improved significantly. 

Despite rhetorical declarations and allocation of certain budget funds, the affordability of housing in Ukraine remains very low. Inefficiency of the state policy in this area is obvious. Huge discrepancy between living standards and housing prices is still in place.

Besides, the social security system depends directly on availability of the budget financial resources. Considering the fact that over entire period of the Ukrainian independence only one budget happened to be non-deficit, one hardly can expect significant improvement in the social area in the foreseeable future.  Moreover, even if certain steps are made in this direction, they lack systemic approach and more often than not are aimed at saving budget funds.

Absence of viable pension reform has been registered by everyone concerned – the government, the deputies, and, first and foremost, the public, i.e. the target group of the reform. The pension fund deficit is increasing; the second tier of accumulation has never been introduced within the pension system, incomparable sizes of pensions remain in place.   All this means that the protection of the senior citizens in Ukraine is rather weak and does not meet its goals.  

2. Right to sufficient living standards

2.1. Guarantees of the right to sufficient living

As of today, under official data the share of poor people in Ukraine constitutes between 15 % and 25 % of population.[2] The research carried out by an international company GFK, which analyzed potential expenditures in 2013 in 42 European countries, placed Ukraine among 9 less affluent European countries on the basis of the purchasing capacity of its citizens. Alongside with that, over three last years the size of the so-called middle class in Ukraine suffered reduction – while in 2008 respective factor amounted to 10%, currently it is twice less.

Ukraine is also characterized by a phenomenon of indigence among the working population. The 2013 budget failed to address the issues of budget salaries, unemployment benefits or shadow economy adequately.  

As of August 2013, mean salary in Ukraine amounted to 3 304 UAH, being twice higher than an average pension. Half of the income earned by Ukrainian families is spent on food.

These figures, alongside with the reduction in life span and restricted access to high quality medical care and education unambiguously point to the fact that poor people abound in Ukraine. On the other hand, accurate evaluation with respect to the exact numbers of people affected and specific poverty characteristics does not seem an easy task.

Besides, the universal indicator – bare survival minimum – used to rank Ukraine in the world comprising both very poor and very rich countries, is different depending on the region.    

For African countries it constitutes 1.25 USD per day; per European countries – 17 USD. For Central and Eastern Europe, where Ukraine belongs, it amounts to 5 USD per day. Using this indicator one would deduce that only 2% of the Ukrainians live below poverty line.

However, if the living minimum is used as bottom line, the portion of indigent population will amount to 9% - 15%, depending on whether income or expenses were used for calculation purposes.

The experts, nevertheless, claim that the traditional characteristics of poverty, i.e.malnutrition, lack of basic conveniences, belong in the past, especially as far as Ukraine is concerned. The notion of poverty has become relative in the modern world.  

Relative poverty means lack of capacity to maintain the standards of living characteristic of a specific society in a given time period.  

The experts also draw attention to the fact that the set of factors against which poverty is defined, differs from one country to another.

Starting 1960-s the concept of so-called “median income”, i.e. the average income earned by the majority of the population, has been used in Europe. Currently, after poorer countries from the post-soviet bloc have joined the EU, the notion of the “poor” is applied to the countries that do not exceed 60% of average income value.

If relative poverty index is calculated on the basis of this requirement, then the number of the poor in Ukraine will constitute 10-12%, – more or less the same rate as in France or Germany, although the absolute level of poverty will differ substantially, as the standards of living are completely different in Ukraine as compared to France or Germany.

It should be kept in mind, however, that the use of relative poverty index, so convenient for the highly developed countries, can lead to a distorted picture in poorer countries, like Ukraine, due, among other things, to huge stratification within the society.

On the other hand, the developing countries are well-known for a substantial role of the shadow economy, so that bare income comparison in this case would not work.

The rate of work remuneration is really very low in this country. Only Moldova ranks lower than Ukraine in Europe. But the Ukrainians get their income not from the salaries only. Besides, between 30% and 50% of the entire economy belongs to the shadow area. Therefore, we cannot rely on the official data for average salaries values while defining poverty rate.

The newest concept identifying poverty is a “deprivation”factor, when the poverty is assessed not by the resources of a family, but by the living conditions, or lack of benefits available to a family.   

Using this indicator, the experts assessed the poverty rate in Ukraine at 25-26%.

This approach, although not allowing for the consolidation data for different countries, provides a more objective picture for any given country.

For Ukraine, the factors separating indigent walks of society from the affluent ones, would include access to the healthy mode of life, high quality food products, high quality of free medical care (instead of the care constitutionally guaranteed on paper only), good education, adequate living conditions, availability of job according to professional qualifications.    

Other factors, such as access to pure drinking water and environmental conditions, acquire importance in assessing poverty rates. It is these factors and not only incomes and expenses values that decide upon the poverty level of a country and define the number of citizens living below the line of poverty.

On the other end of the evaluation we find subjective assessments, under which 65% of the Ukrainians define themselves as poor.

If we take into account only the absolute indicator, i.e. how many Ukrainians survive on less than 5 USD per day, Ukraine does not look that bad at all with respect to poverty.

 On the other hand, if a person eats well, has a roof over his/her head and a job, but cannot afford a vehicle or vacation abroad, and, hence, considers him/herself poor, this perception  does not seem to reflect the actual realities of the Ukrainian life.

Summing up, as varied as the factors for defining poverty are, they all testify to the fact that significant portion of the Ukrainian population lives below the poverty line.    

 The language of figures is tricky and can be expertly manipulated to achieve specific ends. The system of social protection in Ukraine is based, in particular, on the indicator of cost of living. Under the Law of Ukraine “On state social standards and state social guarantees” all the social guarantees should be equal or higher than the cost of living.

Under the Law of Ukraine “On the state budget of Ukraine for 2013” the cost of living in 2013 amounted to 1108 UAH.

It is noteworthy that the norms established by the Cabinet of Ministers of Ukraine as far back as in 2000 are significantly lower than the physiological needs, while the offered list of merchandise articles fails to satisfy the basic needs of a person. The food list does not meet the nutrition requirements for food consumption recommended by the Ukrainian scientific research institute for nutrition hygiene under the Ministry of Health.  As far as other merchandise goes, the infants younger than one year are not taken into account at all, either with respect to food or clothing. One winter coat for two years is envisaged for a child between one and six, while one jacket with synthetic lining is stipulated for adult males for four years, and one winter coat for adult women – for eight years. The cost of living calculations need updating too.    It means that consumer basket in Ukraine should be updated with due consideration of all the current consumer needs of the population.[3] So far it has not been done.

Significantly, over the year 2013, despite all the official promises, the shameful practice of using the “guaranteed rate of the cost of living” in defining certain types of social protection, has been consistently applied.  This indicator points out either reluctance or incapacity of the government to meet at least the minimum cost of living.

2.2. Quality and safety of food products

Currently the international community is concerned with the issues of the global food safety. The global food safety is in the focus of many debates at the international conferences. The world –wide tendency is to compare the strategic importance of food with the significance of financial resources and power/energy safety.  The food safety of a country reflects the level of availability of healthy foods manufactured locally to the public. The norms for the food quality should be scientifically substantiated and prices should be affordable with due preservation and improvement of the living environment.[4]

Guaranteeing food safety in any given country is one of the key functions of the state, as the sustainable food production, its affordability and availability due to local manufacturing and import are possible only under the state control. Only the state can supervise the food resources, using support mechanisms for the food producers, regulating exports and customs and tariffs’ policies.[5]

The experts claim that the situation with respect to food safety has remained unsatisfactory over the year 2013, as the level of meat and fish consumption remains low, and the quality of these foods has not improved over 2013. The main requirement put forward by the bodies of control is avoiding food poisoning of the consumers, sticking to the standards of energy values (calories’ content) of the products and appropriate taste and aroma characteristics of the products.  The manufacturers are able to compete not on the basis of the quality of the products, but by bringing down the production cost. So, adherence to the nutrition values characteristics (vitamins, micro- and macro-elements’ content), use of natural ingredients with no supplements “identical to natural” or taste enhancers is a lesser problem as far as local manufacturers go. The food products delivered from other countries sometimes are not ecologically pure and contain preservatives and supplements banned in the countries of origin.

Considering the unsatisfactory situation with the food safety in the country and potential participation in EU Association, the authorities try to influence the quality and safety of food products manufactured locally and those brought into Ukraine from other countries at the legislative level. Thus, as of 2013, over 250 standards for global food safety have been brought into compliance with the European law requirements; the system of quality and safety control for food products has been introduced at 553 manufacturing facilities; as a result, over January-August 2013 the export of ready-to-use food products has increased as compared to the same period of the previous year by 7.9%. In 2012, respectively, the export increased by 67% as compared to 2009, which constituted over 1.4 billion USD.

In September 2013 the Government finalized the draft law addressing the system of food quality control (Hazard Analysis and Critical Control Point),[6] under which the producers are obliged to keep a strict inventory of all the products bought and sold. The data are to be entered into a uniform database. The Criminal Code shall be amended by respective articles stipulating penalties for circulating poor quality foods entailing health hazards. 

In its turn the Supreme Rada of Ukraine passed a law of Ukraine “On production and circulation of the organic agricultural produce and raw matter” on September 3, 2013. The law stipulates the introduction of the control system at every stage of the organic food production, as well as the procedure for inspection and certification of the production and processing.  It is noteworthy that the share of the certified organic-production areas in the general volume of the agricultural lands of Ukraine amounts to only 0.7 %.[7]

Over the year 2013 the working groups of the specialized ministries also discussed the Presidential Decree “On main principles of ensuring food safety of Ukraine” to come in force in 2014.[8]

Meanwhile, the disastrous condition of the small farms in Ukraine represents one of the most significant and decisive factors bearing upon the low quality of products manufactured in Ukraine.  Obvious achievements in grain production and export, manufacturing of sunflower seed oil from local raw material (in these areas Ukraine ranks first among the world leaders) are intricately intertwined with complicated situation in the mass sector of the AIC. Although the state supports big business to a certain extent, subsidizing construction of big animal farms, hot-houses, storages for fruit and vegetable, small-scale production still prevails.  Almost 4.5 million individual rural households, under the latest data, produce 70.1% of the total volume of milk and 45.9% of meat produced in the country. These farms survive due to the individual effort of the villagers, using technologies dating back to the 19th century. Nevertheless, they account for the lion’s share of production in many agricultural sectors as well as for the social development of the rural territories which is possible only due to their hard labor. The livestock is kept in most primitive conditions. Cows are milked by hand, slaughtered and dissected right in the backyards. Then the meat goes to the processing facilities and to the markets – external as well as internal.

To meet the obligation undertaken by Ukraine prior to its’ joining the WTO, the Supreme Rada in 2009 passed a law” On safety and quality of food products”. In January 2010 the law came in force, but the whole range of its provisions and norms were continued till January 205, as their implementation was not deemed feasible without refurbishment and modernization of the whole small-scale production. No funds designated for these activities were found in the state budget either in 2011or in 2012. There is still no money. In less than 1.5 years the continuance term of the legal norms concerning the safety of food products comes to an end. And it means that sales and circulation of the unprocessed milk, locally produced cheeses and meat will be banned – with all the economic and social consequences attached to the banning.  It is easy to assume that the proposals of another continuance will beome the main instrument in addressing this issue. Another draft law allowing for it is already sitting in the Supreme Rada. The freezing of the law norms which call for permanent systemic work might alleviate the bureaucrats’ burden, but won’t move the process on.    [9]

2.3. Ensuring appropriate water quality.

The non-compliance of drinking water quality with the normative requirements in Ukraine has long since become one of the crucial issues related to the adequate life standards.

While in the countries of EU the water is tested against 70 indicators for potential content of hazardous substances, in the US – against 102 indicators, in Ukraine this list comprises only 30 indicators.

Thus, the research carried out during the flood of 2013 by the all-Ukrainian professional organization WaterNet, showed that the water drunk by Kyiv residents, the marginally acceptable concentration of manganese in exceeded in 70% of all the samples, of aluminum - 52%, of chlorine – in 42% and of iron – in 8%. The all-Ukrainian organization “For citizens’ right to environmental safety” carried out an independent study of the water in Dnipropetrovsk and Kherson. It showed that the content of iron and sulfites in the water was several times higher than marginally acceptable values.  These substances can provoke the diseases of the liver and pancreas, stomach and nervous system.  

The pollution of the ground waters by the industrial enterprises, unregulated use of mineral and organic fertilizers by the AIC should be named among the most important causes of poor water quality. The Ukrainian companies are not interested in installing treatment facilities. It is easier for them to pay either fines of bribes to the control bodies, than to invest into treatment technologies.   76% of all the untreated water discharges of the country are accounted for by the predominantly metallurgical industry of Donetsk, Lugansk, Dnipropetrovsk and Odessa oblast’s.

Second, the quality of water cleaning leaves much to be desired due to the obsolete condition of the sewage systems, 87% of which are in bad need of repair. The volumes of waste water entering the ground aquifer, used for the central water supply, do not diminish.  80% of the “life source” is taken by the Ukrainians from the rivers, the environmental condition of which is constantly deteriorating. While some time ago the water from Dnipro and Desna was classified as first category under international index, today it ranks third and calls for thorough treatment. 

“Kyivodokanal” is still using the water conduits dating back to 1905 and even 1892 in the old districts of the capital. In other cities the pipelines are even worse. For example, in Donetsk oblast’ about 40% of the entire water pipelines networks is in the state of total disrepair. No high quality water can be delivered by rusty pipes. 

Third, the drinking water lacks significant microelements, like J, Zn, Cu, and F, contributing to the emergence of endemic diseases.

The treatment technologies date back to the soviet era. While in the EU countries the largest portion of water is treated by ozone to get rid of both hazardous substances and bad odor, in Ukraine the water is detoxified the old way – with chlorine. The use of chlorine has its negative side effect, namely, it is difficult to calculate the right doze. If there is not enough, biological contamination can occur, if there is too much, the risk of emergence of cancerogenes causing the cancer cells growth at the time of boiling, increases. 

Noteworthy, the 24 hours water supply has not been yet ensured in many regions of Ukraine. Thus, only 7 out of 28 oblast’s of the country have 24/7 water supply in 100%.  

The connection between poor water quality in Ukraine and spreading of numerous infections (viral hepatitis A, stomach typhus, rotaviral infection etc.) as well as of non-contagious diseases ( of the digestive tract, cardiovascular system, endocrine system etc), increase of morbidity as a whole, including oncological diseases was registered and pointed out not only by the Ukrainian experts. The Ministry of regional development, housing and communal economy of Ukraine recognized direct link between the water quality and morbidity rate in Ukraine in its national report on the drinking water quality, published in October  2013.[10]

The Ukrainian water, under the conclusion made by the Institute of colloid chemistry and water chemistry, as oppose to the European water, cannot be considered drinking water at all. It is technical water, sanitary-technical at best, which can be used for domestic purposes.

In June 2013 the President of Ukraine V.Yanukovych validated by his Decree the Decision of the Council of National Defense and Security “On the safety of water resources of the country and on providing population with high quality drinking water in the residential settlements of Ukraine”.   

The decision stated that the situation with respect to water supply for the population as of 2013 has not changed for the better, while in some regions it even deteriorated. Therefore, a number of measures, aimed at legislative changes, approval of national standards for the drinking water and water strategy for Ukraine till 2025 have been improved.[11]

However, practical organization and implementation of the set tasks remain the real problem. The programs are efficient but “steps are taken unsystematically, without noticeable progress for several budget periods” (from the report of the Accounting Chamber on the use of the budget funds allocated for the reconstruction and construction of the central water supply systems by the Ministry of the regional development and housing and communal economy).

2.4. Exercising of right to adequate housing

The analysis of Article  47 of the Constitution of Ukraine shows that all the citizens of Ukraine, the indigent included, are entitled to the governmental care with respect to housing instead of ruination and demolition of the whole districts and establishing high prices for a square meter of living space and outrageous mortgages interest rates.

The right to adequate housing is within the focus of cultural, social and economical rights duly addressed not only by the international bodies protecting human rights, but also by the UN Habitat Center.

The definition provided by the Global Strategy for housing points out that dequate shelter does not mean merely roof over one’s head. It embraces the whole set of living conditions ensuring non-interference into private life; sufficient living space; physical availability; due safety; guarantees of housing retention; stability and reliability of the available structures; appropriate lighting, heating and conditioning; appropriate basic infrastructure, i.e. water supply and sanitation; waste removal; due state of environment and factors affecting human health  as well as appropriate and accessible location allowing commute to work and services; all these amenities should be affordable.  

To evaluate the affordability of housing the world practice uses the indicator of housing price to income ratio, calculated as correlation between median cost of housing and median household income per year. The value of this indicator shows the number of years over which a family could save money to purchase a flat if all the income received is used to that end. In Kyiv this ratio amounts to 18.5[12], which signifies serious discrepancy between the cost of living and housing cost. The world practice sustains that the housing is affordable if the said ratio does not exceed three years. 

Under the data of the Statistics Service of Ukraine average salary in Kyiv as of August 2013 constituted 3 335 UAH (approximately, 417 USD).[13] The median cost of one square meter of housing space in Kyiv amounts to 1750 USD (approximately 14000 UAH). Simple math plus aforementioned factors demonstrate that a person receiving average salary of 417 USD will need about 70 000 USD (about 560 000 UAH) to purchase a flat of about 40 square m. If the housing prices do not go up and the said person would save his/her whole salary for the flat than he/she would be able to purchase a one-room flat after 14 years of savings. Noteworthy, under Global House Price Index Q2 2013, published by Knight Frank company, Ukraine ranked 10th in the growth of housing prices.  In 2013 only the housing cost in Ukraine increased by 10.9% as compared to 2012. Considering the tendency of prices’ increase with salaries remaining at the same rate, the same person will need much more than 14 years, possibly –18-19 years, according to housing price to income ratio.

Obviously, the housing problem should be addressed immediately. Only lax credits, mortgages and special housing programs for the young can help. As of today, several programs, which, in bureaucrats’ thinking, could help in enhancing the level of public well-being, have been introduced, targeting, first of all, people waiting in housing line and young families. Specifically, the State target social-economical program of construction (purchase) of affordable housing (30/70), program for reduction of mortgage rates to allow for affordable housing and State program guaranteeing housing for the young people for the years 2013-2017 are in place.

The “Affordable housing” program, for which the major share of budget funds has been allocated, gave rise to hopes of individual housing or living conditions’ improvements among many citizens. But is the program really as affordable, reliable and long-term as it claims to be?

The “Affordable housing” program,(30/70) was launched in 2010. The essence of the program is that 30% of the new housing costs are covered by the state, while the remaining 70% are covered by the buyer. The program has no age restrictions but its potential beneficiaries must be in line for the housing. The Law of Ukraine “On State Budget of Ukraine for 2013” allocated 50.0 million UAH for the implementation of this program.

However, this implementation is hindered by a number of factors.

The first obstacle for the “Affordable housing” program (30/70)  is predetermined by the fact that if the living space exceeds the envisaged norm (i.e. more than 21 square meter of total space per one family member plus additional 10.5 square m per family), or its cost exceeds the marginal cost, the difference will be paid by the buyer himself. The state does not cover the cost of the additional space. Meanwhile, the normative cost of 1 square m of affordable housing constitutes 7 990 UAH for Kyiv and 6 435 UAH for Kyiv oblast’. The detailed analysis of the list of the housing earmarked by the Ministry of regional development and construction of Ukraine, which can be found on the site of the State fund for the support of the housing construction for the young people shows that the smallest flat in Kyiv – 32.07 m - is to be found at #3, Miloslavska street, while the lowest price per m is 8750 UAH.[14] It means that if a person who has no more than 21 square m of space to account for wants to buy the said flat, the governmental compensation will amount to approximately 50 000 UAH, while the rest of payment–about 230 000 UAH – will be covered by the said person. Hence, one may conclude that this housing is not really affordable for a person with average salary, let alone for people with minimum wages.

The financing cycle for the program is another issue. Thus, in 2012 the program funding ended in November, seriously affecting the public trust towards the program, as many families were left without due funding. 

One can’t discount the families on the housing waiting list. The State Committee for Statistics provides the data, according to which about 1 million 022 families and individuals are in line to get the housing. About 73.3 applicants have been on the waiting list for over 10 years. Under the most recent data only 7 thousand people got their apartments over the year. The number of households where the space per person is lesser than the established norm (13.65 square m.) constituted 6 million 878 thousand, which constitutes 40.5% of the total number.[15] If the housing line progresses at the same pace the majority of applicants will never have a chance to enjoy the benefits of the program.  

Another program in need of improvement is the program for reducing the mortgage rates (13/3), when the buyer is paying only 3% per year, while the state covers other 13% of the bank mortgage.

Significantly, partial compensation of the interest is achieved within the frame of the costs allocated to that end by the state budget for the respective year (though no guarantees of the said allocation are enforced). The Law of Ukraine “On State Budget of Ukraine for 2013” allocated 300. 0 million UAH for the Ministry of regional development to lower the mortgage costs for the benefit of the citizens in need of housing improvements although in 2012 the same program received 1 billion UAH. Obviously, the scope of funding shrunk, allegedly due to the fact that this program is not popular among Ukrainian citizens.

“Prior to launching the program in 2013, 1233 agreements at the total cost of 284 million UAH have been signed. But then the program lost its momentum: only about 900 mortgage agreements were signed for 6 months”.[16]

The lack of incentives for participation in the program is accounted for by the fact that the program stipulates first down-payment at the amount of 25% of the total cost of housing, and individuals within the target category are not always capable of paying that much.  Besides, the mortgage interest rate has not been accurately established. Despite the provision stipulating that the state is to compensate 13% of the mortgage, the borrower anyway enters into agreement with the bank at 16% of annual interest. Besides, if partial compensation is delayed the borrower undertakes to pay 16% of annual credit for service. So, as one can see, there no guarantees that the state will cover 13% of the mortgage and an average citizen, signing mortgage with the bank at 16% of annual interest runs the risk of not only never getting a flat but of being totally robbed of all his savings.

This program, however, has one decisive advantage as opposed to the “Affordable housing” program (30/70), namely, that living norms are calculated proceeding from the bottom-line of 40 square m of total space per individual or a family of two, plus 18 square m peer each additional member, but not exceeding 76 square m or 94 square m in individual housing, which is twice as much as in the “Affordable housing” program (30/70).

However, the basic housing costs in this program are lower than in the “Affordable housing” program, i.e.:

7000 UAH per 1 square m – for Kyiv;

5000 UAH per 1 square m – for Kyiv oblast’ cities, oblast’ centers, Symferopol and Sebastopol;

4000 UAH per 1 square m – for other inhabited settlements.

According to the “Affordable housing” program (30/70) the difference in normative or established cost is covered by the buyer under the agreement conditions (signed by the  borrower and the  seller of the housing with the goal of construction (reconstruction) of the housing or of purchase of the incomplete housing) from his own funds without partial compensation of the interest.

Therefore, only persons with stable and official salaries are in a position to get and pay out the mortgage within the program.

The third program called to address the housing problems of the young families is the State program for providing housing for the young people over the years 2013-2017.This program envisages state support for the young families and individuals through the system of long-term beneficial   lax credits for the housing construction, purchase of housing  with the help of  offering preferential loans, covered by the costs from the state budgets, establishing norms of 21  square m per person plus additional 10.5 square m per family or 20 square m per large families, young professionals working in the villages and rural areas under the work contract with companies and institutions.

In practice this program is underfunded and implemented poorly. Specifically, the State program for providing housing for the young people over the years 2013-2017 envisaged funding of 593.058 million UAH for the year 2013, while only 80 million UAH was assigned from the state budget.

It is this lack of due state funding of the program that made participation in it impossible for significant number of individuals who have no alternatives to acquire their housing.[17]

Summing up, one can conclude that all three governmental programs so far remain inaccessible for the low-income walks of society and need further improvement, funding and adjusting to the needs of the target category.  

Some violations of right to adequate shelter in Ukraine have been registered as well. Illegal evictions have become rather common, while official counteraction often remains inefficient.   

Here is just one example – the eviction of the teacher Nina Moskalenko.

A Kyiv teacher has been fighting against eviction from her own home. The story started in April 2012. Nota bene, the land plot in question is located in Pechersk hills and assessed at approximately 3 million USD.  The woman is the owner of 2/3 of the house. The owner of another third is unknown. Nevertheless, this anonymous owner started sending requests to Moskalenko to sell him her property. The teacher refused, and then persons unknown to her started threatening her. On December 13, 2012 the teacher...was evicted by court ruling. ...On December24, 2012 the prosecutor’s office ordered 24-hours militia protection of Nina Moskalenko’s house. On January    2013 Nina Moskalenko won the case against illegal raiders. On February 13, 2013 the Appellation Court restored the ruling on the teacher’s eviction from her house in the city center. On April 22, 2013 the raiders occupied the house and threw the teacher’s belongings out of it. Militia, though present at the scene, decided that the intervention into the conflict would be unwise.[18]

3. Right to social protection

3.1. Social security and social protection system

The entitlement to social benefits in Ukraine is regulated by over 50 normative and legal acts, constantly changed and amended. This huge number of legal acts stipulates the broad range of social guarantees to be ensured by the state bodies and local self-governance bodies. The number of beneficiaries entitled to relief exceeds 13 million persons which correspond to about 29% of the entire Ukrainian population.[19]

Despite all the benefits, subsidies, compensations and other forms of social relief, the situation of the vulnerable categories of population remains completely unsatisfactory.

Superficially, the system of social protection in Ukraine is rather progressive, if not the most modern. The state seems to be aware of each and every citizen facing certain problems precluding him/her from leading normal purposeful life. The law provides for the social guarantees and mechanisms of their implementation.  

In real life, however, the whole system of social protection in Ukraine is rather amorphous, while the respective law remains more declarative than operational. The system of social protection does not meet its targets, while the problems arising are not addressed and keep accumulating and aggravating. The experts estimate that due to the lack of efficiency in the social security system Ukraine is losing about 60 billion UAH annually.[20]

The lack of efficiency in the social security system is partly accounted for by the absence of systemic approach to the issue. The state policy proceeds, mainly, from the Law of Ukraine “On state social standards and state social guarantees”, which had to become the axis around which the whole system was set up. However, as mentioned earlier, it is merely declarative; in fact, the system of social protection remains unbalanced. 

Specifically, the Law establishes the following guarantees:

-       Minimum wages;

-       Minimum age-related retirement benefits;

-       Tax-exempt minimum individual income.

Besides, the Laws of Ukraine establish state guarantees aimed at social support of the entire population and specific categories:

-       Appropriate living standards for the persons affected by the Chernobyl NPP disaster;

-       Grants to the students of the vocational/technical schools and higher educational establishments;

-Indexation of the individual incomes to keep the due level of living and purchase capacity under the growing prices;

-       Providing guaranteed scope of social-cultural, housing and communal, transportation, educational, health care, physical fitness and sports, commerce and public catering services; 

-       Ensuring availability of specific articles and services to the categories of public in need of social support.  

Alongside with these guarantees some social guarantees are offered to the members of certain professional categories, specifically, to servicemen, internal troops and national security, people’s deputies etc. These benefits are spelled out in the Laws of Ukraine “On militia”, “On Security service of Ukraine”, “On social and legal protection of the servicemen and their families”,   “On the status of people’s deputy of Ukraine”.

Every year the state allocates significant amount of money to pay out these benefits. The fact that social guarantees are not embraced by the legislation does not mean that they are not needed.  The state, unfortunately, is in no position to guarantee the due benefits to its servants, but, on the other hand, this category is hardly the one in need of social support.

Meanwhile, members of other walks of society really need that support, balancing at the edge of the social limbo. In this context profession-related social benefits become of secondary importance, as professionals, after all, have the permanent source of income and stay outside the risk zone.

Besides, professional perks can be regarded as corporative bonuses and fringe benefits for certain categories that could do without them, but, due to their exclusive status in a given moment of time, have specific immune status.  Thus, according to the information posted by the Ministry of Finance of Ukraine in  2013 the funding of the prosecutor’s office increased by 550.1 million UAH, i.e. by 20,7% as compared to 2012; of the national security service  – by 179.2 million UAH, or 5.7%, Ministry of Interior – by 1490.5 million UAH, or 10.2 %. [21]

Lack of internal coordination and balance in the social legislation leads one to speculate on the lack of accurate and consistent state policy, uniform vision of development and improvement in this area.

Lamentably, when the map is inaccurate, progress is hardly possible while accidents are highly probable. Inefficient system of social protection will not improve on its own, without precise plan and means for its reforming. One can talk about the reforms incessantly, but without clearly defined program all the reforms are doomed to failure. In this sense uniform legislative approach to reforming is as important as navigation map for a ship – it is just the prerequisite of survival.

It is noteworthy that the system of social protection is not undergoing any reform not because of the lack of system legislation, but due to the lack of political will among the leaders in charge of social policy and social forces supporting these leaders.  

The reforms in the system of social protection call for shock therapy, which will lead to deep discontent among public and reflect directly upon the popularity of a political force which would dare to undertake the step. That is why every government keeps postponing this issue till better times, dodging the responsibility.  Meanwhile, the problems are piling up.

The efficiency rate of the system providing social protection to those who do not need it and denying it to those who do, deserves special attention.

It is no secret that the people’s deputies of Ukraine enjoy a lot of perks. This situation, on the one hand, seems ridiculous, because, obviously, the people’s deputies do not fall under the category in need of social support. On the other hand, the situation is rather dramatic, considering that millions of citizens live on a monthly income not exceeding one thousand UAH. Thus, according to data provided by “Freedom” radio the following funds have been allocated for the upkeep of the deputies: 17 million UAH for vacations, 36 million UAH for transportation, 12 million UAH for free rides in public transport and half-a- billion for the housing renovations. Another half a million goes to support the deputies of earlier convocations. [22]

This example demonstrates clearly the inefficiency of the distribution of social benefits.

Alongside with unfair distribution of social benefits among various categories of citizens, the same inefficient distribution of resources can be registered among specific groups of population. 

Namely, the status of persons disabled in the aftermath of Chernobyl disaster is granted to individuals that had never even lived in the affected zones, let alone participated in the liquidation of the disaster consequences. The real victims, in the meantime, have to fight in courts for their right to the state support. Same applies to the participants of the military operations.  

The essence of the problem, though, lies not in the faulty legislative basis, but in the corrupt nature of the bureaucratic apparatus responsible for the social security.  

That is why more and more proposals concerning targeted assistance can be heard. It will enable putting an end to uncontrolled benefits granted to those who are not entitled to them.  In 2002 the Cabinet of Ministers of Ukraine has even passed a number of resolutions, aimed at introducing the system of targeted assistance (## 253, 382, 383), but they were all cancelled in 2004 by the government, leaving the issue unresolved.

The governmental portal refers to an experiment to be carried out in Kyiv and Vinnytsya oblast’ in 2013-2014 dealing with establishing a uniform information environment in social area. The information was provided by the first vice Prime Minister S.Arbuzov. He referred to the Cabinet of Ministers’ Resolution of September 11 “On establishing a uniform information space in social area and ensuring exchange of information between the central bodies of executive power”.  The resolution on introducing the national card developed on the basis of the National Bank of Ukraine technology was approved. After experiment is completed this practice will be disseminated all over Ukraine, permitting targeted assistance and also improvement in the services’ quality.[23]

Nevertheless, the claim that targeted assistance is unambiguously better than the system of social benefits is open to discussion, because the most vulnerable categories will still be having hard time trying to get help from the state, while corruption and red tape will be still providing loopholes for targeted assistance for those who are not entitled to it.    

At the same time the best practices of the other countries show that targeted financial assistance is more efficient than current system. At least, the expenses can be optimized and controlled. Naturally it would not eliminate the unfair distribution of social funds completely, but the efficiency of the system seems higher as compared to the benefits system. 

The system of social protection is further compromised by the fact that under the Ruling of the Constitutional Court of Ukraine of 26.12.2011on the case # 20-rp/2011 de jure and de fact the Cabinet of Ministers of Ukraine is regulating the procedure and the amount of social payments and assistance funded from the State budget of Ukraine in accordance with the available resources.

In other words, the amount of the social payments, benefits and compensations depends on the availability of funds in the state budget, which evidently does not help in improving social area. The Cabinet of Ministers decides the amount and the addressees of assistance at its own discretion despite existing legal guarantees. Therefore, once again we have to admit the declarative nature of the social legislation and state’s obligations.

The analysis of the social protection law shows that no significant changes have taken place in this area over the year 2013, while the amendments introduced into the law earlier addressed the language and not the essence of the provisions.  

Hence, one can conclude that in 2013 the state policy for social security did not change and hardly will change as it depends directly on financial capacity of the state budget. Considering the fact that over all the years of independence only one budget had no deficit, the improvements in social area can hardly be expected in the foreseeable future. Considering the fact that by October 2013 the budget sphere is still characterized by unpaid wages, payments of social subsidies, compensations and benefits are completely out of question.  

3.2. Guarantees for social protection of the senior citizens

In 2012 the pension reform aimed at cutting down the state pension Fund deficit and balancing the state expenses for social benefits, specifically, pensions and incomes covering these expenses, was carried out.

Nevertheless, despite the reform the state Pension Fund deficit has increased three times as compared to the initial plan. The information provided by the Accounting Chamber indicates that the real state Pension Fund deficit in 2012 amounted to 27.2 billion UAH.[24] Even the Ministry of social policy of Ukraine had to admit the inefficiency of the pension reform. According to the minister of social policy N.Korolevska the increase of retirement age for women from 55 to 60 has led to nothing but negative consequences. The minister reminded that the fund deficit according to 2012 results comprised over 27.2 billion UAH. In 2013 the anticipated state Pension Fund deficit constituted 21.8 billion UAH. Considerable deficit is still registered due to the unviable reform.[25]

The pension system currently in place is rather paradoxical in its nature: it combines high insurance rates with pretty low pensions. This system deprives a beneficiary of his/her legal income, destroying any incentives for diligent work.

It is noteworthy that the pension reform stipulates the increase of retirement age for women from 55 to 60 (with gradual annual 6-months’ increases). The men will now retire at the age of 62. The required term of employment has been increased by ten years. Men have to be working for 35 years and women – for 30 years to be entitled to retirement benefits. The majority, anyway, will be entitled to minimum pension. As a result, the Ukrainians are now working more for lesser pensions. Moreover, they are contributing to their retirement plans more than any other pensioners in Europe, losing substantial portion of their incomes. Thus, the average amount of deductions from a Ukrainian’s salary into the pension Fund amounts to 35%, while medium pension in 2013 amounted to 1470 UAH only.[26] The Swedes, for example, paying deduction at the amount of 18.5% of their wages into retirement fund, get pensions about 2000 USD per month.

Comparison of 2012 and 2013 indicators leads us to the conclusion that the medium amount of pension in 2013 increased by approximately 200 UAH. But taking into account the inflation and current rate of USD or Euro, the absolute increase does not mean anything as the real sum is decreasing.  

Huge discrepancies in the pensions for different categories of population remain an acute problem for Ukraine. Thus, by late 2012 over 100 thousand people received minimum pension, i.e. less than 1000 UAH, while maximum pension was received by less than one thousand people.[27] On January 1, 2014 the new procedure of calculating pensions for public servants will come in force. Under it special titles and seniority will be taken into account while calculating pension amount at the last place of work according to the office held.[28] It can be assumed that public servants’ pensions (which are already beyond the average) will be even higher.

The international expert organizations point out the problems related to the social protection of senior citizens in Ukraine. Thus, under the Global Age Watch index, [29]  Ukraine ranks 66 among 91 countries as far as the quality of life of the retirees goes.

According to this index the well-being of the senior citizens in Ukraine amounts to 40.2 % of the ideal value (100). The difference between this values and the country ranking first in the rating (Sweden – 89.9) constitutes 49.7%. Amazingly, even South Africa occupies higher position in the rating than Ukraine.  

The rating shows that the state of health among our retirees is one of the worst in world – 77th position out of 91, while possibility of leading independent and self-sufficient life is virtually non-existent– 86th position out of 91. The index of employment and education among senior citizens is somewhat better – 25th position out of 91. The index of material satisfaction proves the best – 39th out of  91, which is no wonder, as many categories of the Ukrainian citizens – people’s deputies, public servants, military-men, judges – receive pensions under special laws, envisaging pension amounts up to 90%of their salaries and one-time payments at the amount of up to 10 salaries at the moment of retirement. E.g., a people’s deputy pension constitutes approximately    15 624 UAH, while a judge’s pension amounts to 7 835 UAH. These discrepancies invalidate any indicators of the real incomes of the majority of Ukrainians.  

The system of retirement benefits is seriously affected by rapid ageing of the Ukrainian population. Specifically, under the data provided by the Global Age Watch, the portion of the Ukrainian population over 60 constitutes 9 500 000, i.e. 21.1 % of the entire population. According to the forecasts, by 2050 this share will amount to 32.1 % of the entire population. Imbalance between the number of the working and retired population, between revenues and expenditures within the Pension fund is thus increasing.

The retirees with the target pension s, i.e. for disability or the loss of the breadwinner (accounting for much more than 21 % of the entire population) deserve special attention. According to the Pension fund data, by the end of 2012 Ukraine had 13 639 739 pensioners, while the number of work force, under unofficial data constituted approximately 14million. Many entrepreneurs/businessmen get only partial pension or no pension at all. Same applies to individuals who deal in private farming on the small scale, rent land plots, property or housing, work on contracts or are self-employed. So, roughly, in Ukraine we have one pensioner per one working person. Besides, significant number of working population receives only minimum or slightly higher wages.

Under these circumstances even the highest deductions into the Pension fund would not ensure normal living standards for a retiree, let alone decent pensions.   

To counteract the decrease in numbers of people of working age the expenses of Pension fund should grow annually. It means increasing dependence of the Pension fund upon state budget. As of today Ukraine is spending 16% of its GDP on pensions.[30] It is one of the highest rates in the world.

The essence of the pension reform was protecting indigent citizens from poverty and misery prior to introducing second stage, i.e. accumulation pension fund, to ensure “dignified old age”.  Nevertheless, the aforementioned data show that so far the authorities failed in harmonizing the Pension fund budget. Currently Ukraine has only the first and the third tiers (non-governmental) of pension benefits, while the second has not been yet introduced. The Ukrainian pension system is unready to deal with the promised accumulation fund, so no one knows when it comes into being. 

Noteworthy, the draft laws concerning the annulment of the main reform provisions have been repeatedly considered at the Supreme Rada meetings over 2013, but never passed due to the lack of the required number of votes. [31] This fact is another proof of the problems in this area.

The analysis of the data for the years 2012-13 allows arriving at the following conclusions:  

-       The high inflation rate led to the decrease, instead of the increase in the pensions’ amounts;

-       Pension fund deficit grew in 2012 constituting 27.2 billion UAH;

-       Pension fund became even more dependent on the state budget;

-       Social deductions in Ukraine remain among the highest in the world;

-       Ukraine ranks very low in world ratings with respect to the pensioners’ quality of life.

The law regulating pensions remains inefficient and has a lot of gaps which allow for the violations of human rights and set up ambiance for inefficient management of Pension fund resources and make control over their use difficult. 

Another specific problem arises when a person entitled to pension leave Ukraine to reside permanently in a country which does not have appropriate pension agreement with Ukraine. In defiance of 2009 ruling of the Constitutional Court of Ukraine on unconstitutional nature of the provisions regulating the payment of pensions to such individuals and the decisions of the European Court for Human Rights classifying this practice as discriminatory, (Pichkur vs. Ukraine) the state has not adopted any procedure enabling people to receive their due pension.

The Government admits the problem. The minister of social policy N.Korolevska pointed out that “it is unfair that a person cannot receive his/her well-deserved pension only due to the fact that he/she had for whatever reason to leave the country”.[32] In 2013 the Ministry of social policy devised another draft law addressing this problem,[33] but there are no guarantees that it will be considered and passed.

4. Recommendations

1) Reforming the social benefits system: dividing legal norms into those guaranteeing social and economic rights and those granting certain privileges based on specific office or merits;  

2) Putting an end to the non-compliance with legal norms guaranteeing social and economic rights;

3) Ensuring full funding of the legislative guarantees of social and economic rights, banning practices of “manual steering” in establishing the scope of social assistance;

4) Amending the cost of living index, specifically, including the updated list of food products, merchandise and services; introducing new methods for calculating this index; 

5) Rejecting the index of “minimum cost of living rate” which reduces minimum social guarantees declared by the law without any justification;

6) improving procedures regulating the quality and safety of food and drinking water; 

7) Introducing measures aimed at making housing more affordable; putting an end to unwarranted evictions and violation of right to adequate shelter for the vulnerable categories of society;  

8) Ensuring due funding alongside with clear and efficient mechanisms for subsidized housing programs; setting up re-integration centers, hostels for homeless people; 

9) Ensuring social protection for the vulnerable categories of society in the focus of growing tariffs for utilities; introducing clear and transparent system of housing and communal subsidies and assistance;   

10) Eventually decreasing the share of direct public funding for the social needs and increasing the share paid by population due to the income growth, first of all, of wages, pensions, other types of social transfers;  

11) Establishing direct link between social benefits and sources and mechanisms of their reimbursement to the service providers;

12) Introducing uniform approaches in establishing state budget expenditures for the reimbursement to the service providers

13) Implementing pension reform further by introducing legal provisions with respect to the accumulation tier of the system, creating favorable conditions to that end;

14) ensuring the payment of pensions to the persons leaving Ukraine to reside permanently in a country which does not have appropriate pension agreement with Ukraine;

15) Avoiding discretionary increase in minimum pensions; introducing indexation procedure under which the increase will be tied to the index of consumer prices for the categories of population with different incomes;

16) Enhancing regulations and control over non-governmental pension funds with due consideration to the international practice and consultations;

17) Enforcing compliance with national courts’ rulings’ in the area of social assistance in the case where the state is respondent.  

 

[1] Prepared by M.Shcherbatyuk, UHUHR lawyer  

[2] www.bbc.co.uk

[3] Interview with Yu.Kulyk, Head of the Ukrainian Trade Union Federation www.psv.org.ua

[4] The food safety of Ukraine is not possible without state regulation performed by AIC. ua-ekonomist.com

[5] Overview of the food safety of Ukraine  nash-rayon.dp.ua

[6] HACCPwill regulate food quality in Ukraine 1kr.ua

[7] Ukraine will become one of the world leaders in organic production www.info-kmu.com.ua

[8] Governmental measures counteracting potential threats to the food safety www.dkrp.gov.ua

[9] Food safety... continued gazeta.dt.ua

[10] National report on the drinking water quality and water supply in Ukraine minregion.gov.ua

[11] Decree of the President of Ukraine# 350/2013 president.gov.ua

[12] www.numbeo.com

[13] Average monthly fee by regions for 2013 ukrstat.org

[14] www.molod-kredit.gov.ua

[15] www.ukrstat.gov.ua

[16] Houisng unaffordable. State 3% mortgage introduced by Yanukovych failed. nbnews.com.ua

[17] The young call for increase in funding of lax credits for the young molod-kredit.gov.ua

[18] Nina Moskalenko: “had all the abused joined their efforts…We are so many” www.day.kiev.ua. A teacher was evicted from her house in Kyiv center, with house entrance blocked with iron bars.  zik.ua

[19] Over 13 million citizens, i.e. about 29% of Ukrainian population, are entitled to social benefits . jkg-portal.com.ua

[20] Killing benefits: due to the inefficient system of benefits Ukraine is losing up to  60 billion UAH annually. news.finance.ua

[21] www.minfin.gov.ua

[22] www.newsru.ua

[23]  Targeted social assistance is making first steps in Ukraine www.kmu.gov.ua

[24] Real Pension Fund deficit amounted to  27.2 billion UAH. – Accounting chamber. vgolos.com.ua

[25] Korolevska admitted the failure of the pension reform www.epravda.com.ua

[26] Average pension in Ukraine amounts to 1470 UAH, June 26, 2013, New look www.pohlyad.com

[27] Less than 1000 persons in Ukraine receives maximum pension, TVi  tvi.ua

[28] In 2014 public servants will get their pensions under the new procedure, Dzerkalo tyzhnya, dt.ua

[29] Index measuring the well-being of the senior citizens taking into account the size of pensions, number of elderly people below the line of poverty, life expectancy over 60 and many other factors provided by the World Bank, WHO, WTO and UNESCO www.helpage.org

[30] What will the increase of retirement age mean for Ukraine? ? www.u-e-p.eu

[31] Deputies once again refused to lower retirement age for women www.epravda.com.ua

[32] Ministry of Social Policy devised the mechanism for paying pensions to all the citizens residing permanently abroad  www.kmu.gov.ua

[33] Pensioners residing abroad can receive their pensions news.finance.ua