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Human Rights in Ukraine - 2005: XII. Economic and Social Rights


The main tools of international legal defence of economic and social rights are the International Covenant on Economic, Social and Cultural Rights and the European Social Charter which are both intended to give substance to the provisions declared in the Universal Declaration of Human Rights. (1948).

The economic and social rights outlined in the Universal Declaration of Human Rights were later to be elaborated in the International Covenant on Economic, Social and Cultural Rights which specifies and provides detail about the right to work (Article 6), the right to just and favourable conditions of work (Article 7), the right to form and join trade unions (Article 8), the right to social security, including social insurance (Article 9), the right of families, mothers, children and young people to the widest possible protection and assistance (Article 10), the right to an adequate standard of living (Article 11), the right to the enjoyment of the highest attainable standard of physical and mental health (Article 12), the right to education (Article 13 and 14), the right to take part in cultural life (Article 15), as well as about the equal rights of men and women (Article 3).

The Provisions of the Universal Declaration of Human Right with regard to social rights are also developed in the European Social Charter[2], which highlights:

-  the right to work (the undertaking to provide social and economic policy aimed at achieving full employment; to protect effectively the right of the worker to earn his living in an occupation freely entered upon; to create just conditions of work, especially with regard to the length of the working day and the amount of remuneration; to fight sexual harassment and offensive actions against individual workers; to prohibit forced labour; to ensure freedom in forming trade unions and other associations aimed at protecting the economic and social interests of workers, and the freedom of all to join such associations; to encourage joint consultations, collective negotiations, mechanism for conciliation and voluntary arbitration, the right to strike);

-  the right to housing (the undertaking to build housing in accordance with the needs of families; to reduce the numbers of homeless people; to ensure access for all to housing; make the price of housing accessible to those without adequate resources.; to observe the principle of equal access of foreign nationals to public accommodation);

-  the right to protection of health (the undertaking  to ensure accessible and effective care for everyone; to maintain a policy aimed at preventing disease, first and foremost by protecting the environment, eliminating the risks of work-related illnesses, in order to guarantee safe conditions of work both in  legislation and in practice;

-  the right to education (the undertaking to prohibit the employment of young people under the age of 15; free primary and secondary education; free vocational guidance, vocational training and re-training; access to higher education being solely on the basis of ability);

-  the right to social protection (the undertaking: the right to social security, to receive social assistance and use social services, the right of protections of property, to use special measures to protect the family and the elderly.

Preparation is underway for Ukraine’s ratification of the European Social Charter[3], and therefore the definition and classification of economic and social rights found in the Charter are important for creating effective mechanisms to protect these rights in Ukraine.



The Constitution of Ukraine states that everyone has the right to a standard of living sufficient for himself or herself and his or her family that includes adequate nutrition, clothing and housing (Article 48). This constitutional provision is fundamental for defining the human right to an adequate standard of living.

The problem of poverty and the enjoyment of the right to a decent standard of living remain among the most urgent issues regarding the protection of social rights in Ukraine.  This is also noted in the Address by the President of Ukraine to the Verkhovna Rada in connection with his Message to the Verkhovna Rada “On Ukraine’s domestic and foreign situation in 2005”, where he named one of the main tasks of the state as being to ensure state standards and social guarantees for a decent standard of living for each citizen, regardless of where they live.   Over the past year there have been certain positive moves, for example, this can be observed by taking the average wage as a social indicator.



Table 1

The average wage broken up into regions in 2005[4] (calculated per employee, in UH) 


Regions, if not indicated otherwise

















































































































































































































AR of the Crimea



























































































Kyiv (region)


























City of Sevastopol







































City of Kyiv













Furthermore, according to figures from the State Committee of Statistics of Ukraine the nominal income of the population from January – November 2005, in comparison with the same period in 2004, rose by 38.1%   Disposable income which could be used to purchase goods or pay for services rose by 36.4% Disposable income per head of population from January to November 2005 came to 5,244.3 UH, against 3,816 for the analogous period in 2004[5].

However, as well as this, the statistical figures also show that the poverty line stood at 263 UH per person per month. This indicator marks the borderline below which people live in poverty and need.  This means that 13 million Ukrainian citizens (and this is more than 28% of the population) live below the poverty line, with 55% of these people being classified as extremely poor. The depth of poverty is 25%, that is, those in poverty have 65 UH less than the official poverty line.  The combined income deficit constitutes 826 million UH per month. According to a recent study carried out by the International Labour Organization together with the UN Development Programme, 46.8% of the population considered themselves to be “badly off”, while a further 36.9% described themselves as “not well-off”.

If one compares the average spending per person of the poorer part of the population, this being 198 UH per month, with spending on average for the country (412 UH), it can be seen that the figure for the poor is twice lower.  The poverty level among families with children remains high, at 35%, against 19% among families without children. The statistics show that this level depends on the area people live in: the smaller the size of the populated area, the higher the percentage of those who are poor. The poverty level in rural areas reaches 35%, against 20% on average in large cities.

The situation is also different depending on the region of Ukraine. Among regions with a higher level of poverty are the Autonomous Republic of the Crimea, the Khmelnytsky, Rivne, Chernihiv and Volyn regions (over 37% of the population is poor). The situation is not much better in the Ivano-Frankivsk, Ternopil, Mykolaiv and Odessa regions. The best figures can be seen at present in Kyiv, as well as in the Donetsk and Poltava regions.

One should, in addition, note that the increase in wages was in export-oriented areas, for example, the highest earnings were of people working in industries producing coke and oil products, and metals. The wages of these workers were 1.7 – 2 times higher than the average figures. At the same time, the earnings of people working in agriculture, the fishing industry, healthcare and social services remain considerably lower.  The divide in earnings of employees from different sectors is widening, this leading to the violation of the rights of Ukrainian citizens to an adequate standard of living.

State policy on regulating the minimum wage is another key factor in the fight against poverty. In Ukrainian legislation the minimum wage is defined as the legally established minimum amount of payment for simple, unqualified work for a monthly hour-based amount of work. At the same time, in order to assess whether this minimum wage is adequate, it is important to compare it with the minimum subsistence level, an indicator which defines the level of income needed to provide for the normal functioning of an individual, healthcare, adequate nourishment, as well as a minimum range of other goods and of services, required to satisfy the basic social and cultural needs of the individual.  Table 2 shows the growth of the minimum wage in 2005.


The minimum wage in 2005

The minimum wage

Time period involved

The document establishing the minimum wage

262 UH

01.01.2005 – 31.03.2005

The Law of Ukraine № 2285-IV from 23.12.2004 

290 UH

01.04.2005 – 30.06.2005


310 UH

01.07.2005 – 31.08.2005


332 UH

01.09.2005 – 31.12.2005



The size of the minimum subsistence level was fixed by the Law of Ukraine “On approving the minimum subsistence level for 2005” per person per month at 423 UH, with the minimums for these basic social and demographic groups in society as follows:

-   children under the age of 6 – 376 UH;

-   children aged between 6 and 18  – 468 UH;

-   able-bodied adults  – 453 UH;

-   adults who are not able to work – 332 UH.

A simple comparison makes it possible to see that Ukraine is not guaranteeing an adequate living standard for its citizens, and also that the issue of providing such a safeguard of this constitutional right remains unresolved.

In the course of fixing a minimum subsistence level for 2005, some legal collisions arose which made the application of such an index unforeseeable. For example, two different amounts for the minimum subsistence level were fixed in the Laws of Ukraine “On approving the minimum subsistence level for 2005” and “On the State Budget for 2005” which came into force at the same time.[6]. This legal collision was only rectified at the end of March 2005[7], following a large number of appeals in connection with applying the minimum subsistence level in Ukraine. There are also continuing shortcomings in the actual method for calculating the minimum subsistence level which is based on average prices for consumer items leading to an inaccurate assessment of this indicator.

The deficiencies in state management in Ukraine are vividly demonstrated, in particular, by the inability to use the certain level of economic growth seen in the country, beginning in the year 2000, to achieve sustained reductions in poverty or to significantly improve social policy. Over the last 10 years social policy has largely taken a back seat to macroeconomic stabilization and the development of the private sector.  As outlined in the analysis of social and economic policy “A New Wave of Reform”, undertaken by the Blue Ribbon Commission for Ukraine in 2005, the three most pronounced symptoms of the social malaise which lingers on despite economic growth are demographic:

-  the fertility rate in Ukraine is exceedingly low (1.2 children per woman, one of the lowest rates in the world);

-  a low life expectancy rate (62 for men, which is one of the lowest in the region);

-  mass exodus of people in search of work.

As a result of all these factors the country’s population is shrinking. From 1997 to 2005 it fell from 50.2 to 47.2 million.[8]. Over the same period, the average age of the population rose from 36.5 to 39.

One must also note the problems which have arisen with providing Ukrainian citizens with housing. The state is not only failing to create conditions in which those members of society in need of social protection are provided with housing free or at a manageable price,  but there have also been attempts to violate the constitutional right to housing.

A vivid example of the latter was the attempt to adopt a new Housing Code of Ukraine (Draft Law № 3584 from 8 August 2005[9]). It should be noted that the main aim of the draft law was clear, this being to evict people from their accommodation without providing any other, not only through the courts, but according to rules and procedure set down in that Code (Article 91 of the Draft Law), this contravening Article 47 of the Constitution of Ukraine.  This code also narrowed the scope and substance of people’s current rights to indefinite use of their housing.  This would have seriously reduced their rights under the current Code since after a tenancy agreement had expired, the letting party would have been able to evict the tenant without providing other accommodation.  The Draft Law also contained a norm on eviction without other accommodation being offered in the case of tenants who had more than six months’ rent arrears.  This would have led to mass evictions at a time when the level of income of a large part of the population remains under the minimum subsistence level, and there is still a considerable amount of money owed in unpaid wages and social benefits.  This aroused strong opposition from the public, and following many appeals from human rights organizations and members of the public, on 4 October 2005 the Verkhovna Rada of Ukraine rejected the new Housing Code of Ukraine.  

Experts stress that it is specifically social policy which needs to be a priority area for the state. This does not, however, mean that the country must increase its spending on social needs. The present programs suffer from bureaucratization and pervasive corruption. They need to become more flexible and efficient.[10].

At present, however, social policy remains largely high-sounding words as is seen in Ukraine’s “Strategy for overcoming poverty” from 2005. The Strategy envisages the implementation in that year of the third phase of the program, which is aimed at strengthening the orientation of economic processes towards more efficiently meeting people’s needs, reducing the depths of poverty among the most vulnerable layers of society, as well as the functioning of programs of social protection and creating an efficient system of social insurance[11].  Up to the present time, in implementing this phase, the main attention has been focused on issues of financial provision and creating an efficient system for managing social assistance[12]  This is one of the reasons why real results from implementing the Strategy fall so far short of the declared plans. For example, as stated in a letter from the Ministry of Labour and Social Policy of Ukraine from 3 February 2006. №2/18/157-06, despite all the measures for overcoming poverty carried out, the level of poverty has risen by 0.7 % and stands out 27,3 %, while that for extreme poverty has also increased by 0.5%[13]



The Constitution of Ukraine states that citizens have the right to social protection, this including the right to the right to provision in cases of complete, partial or temporary disability, the loss of the principal wage-earner, unemployment due to circumstances beyond their control and also in old age, and in other cases established by law.  This right is guaranteed by mandatory state social security financed by national insurance contributions from individuals, businesses, institutions and organizations, as well as budgetary and other sources of social provision, and by the establishment of a network of state, communal and private institutions to care for people unable to work. Pensions and other types of social payments and assistance that are the principal sources of subsistence shall ensure a standard of living not lower than the minimum subsistence level established by law (Article 40)

In order to guarantee this constitutional right, the state has been creating a system of social assistance aimed at safeguarding the social protection of citizens of Ukraine. The development of this system has involved several stages.

During the first years of independence, the financing of all forms of assistance was undertaken, as previously in Soviet times, from the State Budget and the single fund for social insurance. From 1 January 1993 the Law of Ukraine “On state assistance to families with children” came into effect, according to which the size of all forms of benefits were 100% of the earnings (income) for all those working or not working. The norms of this Law were implemented through Resolutions of the Cabinet of Ministers of Ukraine which allocated far smaller amounts of the relevant payments. For example, benefits during pregnancy and childbirth constituted 25% of the minimum wage (18 UH), a one-off payment on the birth of a child was foreseen as being four times the minimum (monthly) wage, but in fact only 25% (74 UH) was actually paid. Financial assistance to mothers looking after three or more children came to 18 UH and assistance in the case of single mothers – 15 UH. The capacity of the State Budget did not provide the necessary level of payments for all types of social assistance.

Therefore, in order to achieve a real increase in all types of social assistance, the Verkhovna Rada adopted a Social Security Strategy for the Ukrainian population which presented a new approach via principles of social insurance and envisaged social payments funded from insurance contributions from employers and those employed.

The next phase of the reform was the adoption and entry into force of the Fundamentals of Ukrainian legislation on mandatory state social insurance and laws on particular types of social insurance.

In Ukraine at the present time there are four such funds

1) Industrial accident and occupational diseases which have caused disability Fund;

2) Unemployment insurance Fund;

3) Social Insurance Fund Temporary disability and expenses related to maternity leave and funerals;

4) Pension Fund

The first three funds were created and have been functioning since 2001.  The Pension Fund was implemented on 1 January 2004.

Social security is a priority for the new regime and this has been reflected in the Action Plan for the Government, and in its first moves.  81% of the 2005 budget was channelled towards social spending which was the highest indicator in Ukraine’s history.  For the first time the minimum pension reached the level of the minimum subsistence level for those not working – 332 UH. The process of eliminating pension levelling down began. If on 1 April only 10% of pensioners received a pension higher than the minimum, then now the figure is 53%.  The assistance on the birth of a child has been increased to 8.5 thousand UH. The assistance for orphaned children, disabled children, people disabled since childhood, low-income single mothers has slightly increased. At the same time it must be noted that the payments from the State Budget in the majority of cases do not reach the minimum subsistence level. Nor has there been an improvement in the efficient use of available funds of social insurance, including through increased transparency of the system of social security and by avoiding social security payments being issued to people who do not in fact need them.

It should immediately be mentioned that according to the Law on state pension insurance, the minimum pension is established only on the basis of age and given the appropriate length of time working. This minimum pension is accordingly smaller depending on the number of years to pension age. As a result of this, a really quite large number of people receive pensions which are sometimes substantially lower than the official minimum because for various reasons they are not able to confirm the relevant length of service.

In determining the amount of state assistance to citizens who are not insured under the system of pension insurance, an indicator based on a person’s position in relation to the minimum subsistence level. As a consequence, in determining a person’s right to certain types of social assistance, the state bases their calculations not on the size of the minimum subsistence level, but on amounts set by the Law on the State Budget which are considerably lower.

With regard to unemployment benefits, these also do not correspond with the minimum subsistence level, standing at 135 UH for those insured, and 108 for those without insurance[14]. However here it should be understood that this type of assistance cannot keep up with wages, but should first and foremost provide an incentive to work and not encourage a mentality of dependency within society.

The amounts of assistance for those looking after children up to the age of 3 are also inadequate. The figure for those insured is 104 UH, against 90 UH for those without insurance

Together with a system of social insurance within the framework of market transformation, a system of social assistance was created which in the first instance consists of assistance to families with children, state social help to low-income families, disabled children and those who have been disabled since childhood, as well as other categories.

Among the most significant achievements of recent years as far as provision of social assistance is concerned was the change in sources for the financing of social programs. After the centralization of payments from the State Budget, the overwhelming majority of payments were made from state financial aid (subvention), as a result of which the debt towards those owed salaries was gradually eliminated. The imposition of firm control over the financing of assistance to families with children and low-income families made it possible over 2005 to stabilize these payments. However, despite all of this, social payments still fail to reach the minimum subsistence level as envisaged by the Constitution.

The Committee of the Verkhovna Rada on Social Policy and Labour carried out parliamentary checks on the  implementation of all laws of Ukraine on social security, this enabling them to identify a number of shortcomings:

1)  infringements were found of normative legal acts approved by the boards of Funds;

2)  cases were recorded where the heads of boards of Funds had exceeded their authority;

3)  the practice for formulating insurance tariffs and contributions was carried out with infringements of the basic laws;

4)   there were not just isolated cases where the principle of social partnership were ignored and where executive bodies tried to influence the Funds.

Based on the results of their checks, the Committee put forward suggestions for introducing amendments to the statutory documents of the Funds. In order to implement the Committee’s recommendations the Cabinet of Ministers submitted draft laws on all forms of social insurance designed to improve the legislative base.

  In the Social Insurance fund for temporary inability to work, the situation arose in 2005 where during a meeting of the Board of the Fund on 15 April, at the demand of the Minister of Labour and Social Policy, a decision was taken to reduce the amount of spending on assistance in the case of temporary inability to work to 85 million UH, and to decrease by 50% spending on sanatorium treatment.  All this was carried out purely in order to fulfil the promise given by the President of Ukraine to increase the amount of benefit at the birth of a child to 8.5 thousand UH.  That is, at the expense of other socially vulnerable categories of the population an attempt was made to keep a pre-election promise, breaching in the process legislation.

At the decision of the Committee, the decision of the Fund’s Board was suspended. The question arises why the executive bodies did not envisage a solution to the problem through financing from the State Budget.  Why were only 158 million UH foreseen for compensating the Fund from the State Budget?  Why also was the payment of this assistance stretched over the entire year when it is, by its very nature, a lump sum payment?

The government also recognizes that there is a problem with lack of transparency in the work of the Social Insurance Funds. The Minister of Labour and Social Policy, V.A. Kyrypenko has stated that the checks carried out during 2005 showed that amounts running into the many millions of Social Insurance funding were being spend inefficiently. For example, the Prosecutor General had launched a criminal investigation officials from the Social Insurance fund for temporary inability to work there being grounds for believing that a crime had been committed under Article 364 § 2 of the Criminal Code of Ukraine. In 2005 the Directors of three Social Insurance Funds were dismissed, the budgets of two Funds were changed, and a reduction is underway of the number of expenses articles through which, as a result, abuses are slipped through.

The rules and procedure for establishing the size of insurance contributions also give cause for concern. The system is totally breaking down where one needs simply to count up spending on material provisions and social services to those who are insured in accordance with current legislation, and on that basis calculate the size of contributions. Instead of this the Ministry of Labour and Social Policy (in its previous makeup) issued a command regarding the average size of the insurance tariff, which has resulted in financial instability of the work of the Funds, and more specifically, in a deficit calculated in the hundreds of millions of UH.

Furthermore, through the annual Law of Ukraine on the State Budget, beginning in 2002, the Funds of Social Insurance have had non-purpose linked payments imposed which are not envisaged in the basic laws. From the Accident Compensation Fund alone for the period since 2002 314 million UH has been taken for paying money owed in lump sum assistance and compensation of losses.  For two years in a row, the Laws on the State Budget have bound the Unemployment insurance Fund to pay for spending on social services and material provisions for people who have no insurance, for which purpose in 2004 alone the Fund lost more than 90 million UH. The Social Insurance Fund for temporary inability to work has been made to pay the first five days when a person is unable to work for state sector organization, this also running counter to the basic law and resulting in additional expenditure for the Fund amounting to more than 100 million UH each year.

All of this raises not only concern as to the stabile work of the Funds, but also with regard to the contradictory attitude demonstrated to executive bodies of power which, rather than properly overseeing the work of the Funds directly interfere with its financial activities, flagrantly violating current legislation.

  Doubts are raised as to the expedience of a Deputy Minister of Labour and Social Policy, heading the Boards of two Funds – the Social Insurance Fund for temporary inability to work and the Unemployment insurance Fund.  The Deputy Minister represents precisely the body which should oversee the activities of the Funds through the prism of the law.

  One cannot leave without mention the issue of a single social tax. The relevant draft law has on a number of occasions been considered by the Verkhovna Rada, but has not found support from State Deputies, although suggestions of the need to introduce the tax are heard from the Ministry of Labour and Social Policy

Unfortunately, the President of Ukraine, Viktor Yushchenko in a direct broadcast on 12 May 2005 expressed his support for a single social tax and a halving in deductions from the Social Insurance Funds. The President failed, however, to explain where the money no longer paid into the Funds would come from. Would this be from the Budget?  It would hardly be filled illegally from Social Insurance funding.  There remains then a single source – individuals with insurance, that is, citizens of Ukraine. If this is the case, then for employees this could turn into an unmanageable burden and loss of no less than 20 % of their earnings. At the same time, debt on payments of social assistance, foreseen in the Law of Ukraine “On state assistance to families with children” as on 1 December 2005 came to 2.7 thousand UH.

  In considering the issue of a single social contribution, one should understand that such a reform of the system of social insurance could lead to its total collapse, since the transfer of even some such functions to one body would raise doubts as to the use according to intended purpose of the money in these Funds. It should be noted that the Funds differ in terms of the basic principles for calculating insurance contributions and deductions, their forms of financial accountability, their reporting periods, and in the final analysis they have different categories of people paying these contributions. A merger of insurance contributions to all types of social insurance into a single social tax would thus lead to exceptional confusion in payments.

The main arguments from the Ministry are as follows: four Funds, four lots of payment, four lots of parties checking, are too much: a single body needs to be created. At the present time there is no drawn up plan for the merger, nor are there calculations, mechanisms, financing or financial and economic predictions.

Moreover, the fifth form of mandatory state social insurance – medical insurance – has yet to be brought into force. Through a Decision of the Constitutional Court of Ukraine, payment of insurance contributions for this form of social insurance is only by employers. This suggests that the introduction of a single social tax cannot be legislatively and in practice foreseeable without the completion of the full formation of a system of all forms of social insurance.

It is clearly worth also drawing attention to the negative experience of the Russian Federation where a single social tax has been applied since 1999, with the tax not having achieved the expected results nor the objectives for which it was created. The reduction in the social burden on employers (from 36% to 26%) did not prove an incentive to legalize salaries.. The financial resources of the funds are drained, and funds are being channelled into it from the Federal Budget. In contrast to Russia, we cannot count on our Budget either in the near future, or in the longer term. It would be extremely unwise to destroy a functioning system of social protection for citizens of Ukraine. This issue needs to be approached carefully, without imposing economically and socially unwarranted changes.

  The pension system at the present time is the most restructured system of the social sphere in Ukraine. However it has retained the tendency to increase spending of a solidarity-based pension system. A significant increase in pension payouts led to a rise in spending of Pension Funds from 9% (in 2004) to 14-16% of GNP in 2005.  One should add the 26 different laws regulating issues of pension provisions, the numerous special concessions on paying pension contributions and, finally, the correlation of pensioners and those working which could soon become equal.

An increased amount of pension spending in present conditions would seem unrealistic and financially unsustainable even in the short term. An increase in pension spending could create a new problem of pension indebtedness and the non-fulfilment of obligations of the pension system, as well as leading to a rise in inflation. Attempts to finance an extended system with the help of excessive social contributions from private businesspeople would push the latter into the shadow economy. In addition, the existing system does not encourage employers to pay pension contributions from relatively low salaries, with it being more profitable for them to pay the minimum contribution and receive the requisite length of service.

In 2005 a problem remained which was originally caused by the Resolution of the Cabinet of Ministers of Ukraine No. 1783 from 20 November 2003 on measures for improving pension security of citizens, This Resolution changed the official figures for the average waves in Ukraine from 1958 – 1991, and for 1992, this meaning that each pensioner was underpaid between 25 and 124 UH, depending on the length of time they had worked and the size of their former earnings.

The people who suffered most from such an “adjustment” of the average wage were teachers, doctors, cultural employees and agricultural workers. A result of such an innovation was the interesting pattern seen that the older the pensioner, the smaller his or her pension. In their appeals to the Committee of the Verkhovna Rada on Pensioners, Veterans and the Disabled, pensioners have constantly called for the government’s Resolution to be revoked as being in contravention of the Constitution of Ukraine, distorting state statistics on the average wage in Ukraine, and providing the possibility for further rigging of the statistics, as well as infringing the material and financial rights of pensioners and denigrating their honour and dignity. Unfortunately both the previous and the present government consider that this Resolution is lawful.

General dissatisfaction has been sparked by the levelling of pensions which the government attempted by passing the Resolution of 18 September 2004 on raising the level of pension security. This Resolution lumps together people with disabilities, veterans of work, war veterans, people who have rendered particular service to Ukraine, and those who somewhere or other and somehow or other worked for a few years.

An important step in changing the situation with regard to the implementation of pension insurance and in moving away from a levelling approach in pensions was the adoption on 23 December 2004 of the Law of Ukraine on introducing amendments to the Law of Ukraine “On Mandatory State Pension Insurance which established a minimum age-based pension at the level of the minimal subsistence level and accordingly an increase in pensions depending on work contributions.  Regrettably, the implementation of this law was dragged out, and only in April 2005 did the payment of the new amounts of pensions and of the supplementary payments to them begin.

The questions of the how important the factor of the period of insurance in the solidarity-based pension system, the rate of indexation of pensions in accordance with the increase in average waves remain controversial and problematical.  The introduction of calculations of length of service at a ratio of 1% for each year of work halves the level of pensions in comparison with the procedure for calculation envisaged by the Law of Ukraine on Pension provisions. This is deemed by many Ukrainians to be a violation of Article 22 of the Constitution of Ukraine according to which the content and scope of existing rights and freedoms may not be diminished in the adoption of new laws or in the amendment of laws that are in force.

In order to resolve the above-mentioned problems, the Cabinet of Ministers of Ukraine sees the following ways of balancing the finances of the Pension Fund.

1  Bringing present jobs out from under the table and creating new jobs, as well as a review of concessions on paying contributions to pension insurance, which will broaden the base of contributions gathered;

2  An increase in wages which should become the main source of income for the population;

3  All pension legislation needs to be guided by standardized principles, streamlining them if not into one, then at least into a few systematic laws;

4  Together with the solidarity-based system of pension insurance, an accumulation pension fund should nonetheless be created, as envisaged in the new fundamental law;

At the same time, in order to make the system of pension security truly efficiently, the Blue Ribbon Commission puts forward the following proposals:[15]:

-  The first and second “pillars” or levels of the pension system should be financed in full. Overall expenditure should be considered and, where necessary, reduced. A reduction in overall spending can be achieved extensively and through systematizing the rules for early retirement. The retirement age should be raised.

-  A strategy for developing the accumulation system should be prepared as a matter of urgency since present legislation does not give clear answers as to how this should be done. Particular attention, from the point of view of pension reform, needs to be given to drawing up a strategy for increasing employment which will raise the level of contributions to the Pension Fund.

-  Strong professional bodies of administration should be created with no political affiliation.  Strengthening he supervisory bodies overseeing the financial market should be a priority.  With regard to the second “pillar” of the Pension Fund, in the first instance focus is needed on increasing the independence and influence of the Executive Directorate of the Accumulation Fund, The members of the Fund should receive professional salaries.  They should be immune from early dismissal (except in the case of criminal conviction).

-  Competition should be encouraged between private pension fund managers at the second “pillar” of the pension system  As well as employing assets managers to maximise profits, the Accumulation Fund can also channel investments into projects and sectors corresponding with national interests.

Finally, the following conclusions of the Accounting Chamber of Ukraine on the efficiency of the Ukrainian Pension Funds should be noted.[16].

1  The reform of the pension system in Ukraine is being undertaken in conditions of a considerable pension burden on employers, a low level of declared earnings and employment in the grey economy of a significant percent of the able-bodied population.  This is slowing down improvements to the solidarity-based pension system and complicating the formation of budgetary revenue for the Pension Fund.

2  A systematic approach in pension reform is lacking with increases in pensions running ahead of increases in the employment remuneration fund. This together with the expansion of sources for Pension Fund revenue and the phased release from inappropriate expenditure being drawn out over ten years are leading to an imbalance in Pension Fund revenue.

3  Despite an increase in revenue to the Pension Fund in 2004, as compared with the previous year, of almost half, and in 2005, according to projected figures, by a further 83.5 percent,  its formation remained incomplete and the funds inadequate. This is connected not only with undeclared earnings of many of those employed, but also with legislated restrictions on sources of income.

4  Pension Fund resources are managed inefficiently. Substantial amounts are diverted to cover expenditure inappropriate for the Pension Fund. The main reason for this is that the Law on the State Budget for a given year imposes payment for the majority of state sector programs from pension payments intended under different pension programs. In addition through normative legal acts spending is allocating not for ongoing pension payouts, but to compensate those already made by the Pension Fund, this creating favourable conditions for putting off fulfilling commitments of the State Budget and purpose-linked funds to the Pension Fund.

5  The gradual release of the Pension Fund from inappropriate expenditure, as well as the imposition on it through laws for the given year and through normative legal acts, in contravention of Articles 9 and 73 of the Law, of expenses which should be financed from State Budget revenue, caused additional burden on the Pension Fund’s own resources in 2004 amounting to 8,657.3 million UH , which constituted 26.7 percent of the spending on pensions, and in the first quarter of 2005 – 1,180.6 million UH, or 12.4 percent.

6  Management by the Pension Fund of insurance resources was accompanied by individual infringements of financial discipline which led to shortfalls in income received, additional burden on the budget of the Pension Fund, and a lowering in creditor indebtedness.

7  The increase in the minimum size of retirement pension to the minimum subsistence level without matching this with an increase in the minimum wage and average wage in areas of the economy destroyed the differentiation in pension sizes and returned those parts of society with low or medium earnings to pension levelling down. This will inevitably exacerbate the problem of earnings not being declared and will have a negative impact on the income of the Pension Fund budget.

8  Legal provisions for the payment of insurance contributions, the allocation and payouts of pensions and benefits contain a number of inconsistencies and points not clearly defined, with this having a detrimental effect on the exercising by citizens of their right to pension security and state support or leading to the inefficient use of Pension Fund resources.

The problem remains real of social protection for people who suffered from the accident at the Chernobyl Nuclear Power Plant. Here one must clearly realize that overcoming the effects of the Chernobyl Disaster is a problem involving many levels. It is not merely a case of overcoming poverty as a result of pitiful Chernobyl-linked social payments, but also of dealing with the consequences of the Chernobyl Disaster within the framework of direct provision of radiation safety measures, appropriate medical services, housing, the obligation to find work should people be resettled.

As of the present time, social protection for people directly affected by Chernobyl is carried out in accordance with the Law on the status and social protection of citizens who suffered as a consequence of the Chernobyl Disaster, passed in 1991 still under the Soviet Union. From the very beginning this law was not implemented 100%, with maximum financing  being at a level of around 57%. According to figures from the Ministry of Labour and Social Policy of Ukraine, in order to implement the law in full 23 billion UH would be needed. Such means are not available in the Budget, and the state accordingly continues to violate the commitments it took upon itself with regard to social provisions for this part of the Ukrainian population.

The state’s commitments on affirming social and economic rights work on the assumption that the state itself will not violate these rights, will protect citizens from violations (by state or private organizations) and ensure their implementation (allocating the necessary financial resources and via institutional means).  It must be acknowledged that in terms of Ukraine’s observance of the provisions of the International Covenant on Economic, Social and Cultural Rights, there are serious problems in all three mechanisms for providing for these rights.



Article 43 of the Constitution of Ukraine states::

-  Everyone has the right to labour, including the possibility to earn one’s living by labour that he or she freely chooses or to which he or she freely agrees;

-  The State creates conditions for citizens to fully realise their right to labour, guarantees equal opportunities in the choice of profession and of types of labour activity, implements programs of vocational education, training and retraining of personnel according to the needs of society;

-  The use of forced labour is prohibited. Military or alternative (non-military) service, and also work or service carried out by a person in compliance with a verdict or other court decision, or in accordance with the laws on martial law or on a state of emergency, are not considered to be forced labour;

-  Everyone has the right to proper, safe and healthy work conditions and to remuneration no less than the minimum wage as determined by law;  

-  The employment of women and minors for work that is hazardous to their health is prohibited.

-  Citizens are guaranteed protection from unlawful dismissal.

-  The right to timely payment for labour is protected by law.

A shortcoming of many of the articles of the Constitution containing various types of social guarantees is that they are formulated in such a way as to require additional interpretation. This is in particular seen in the right to work where, in the second paragraph of the article which regulates this right, there is the wording “The State creates conditions for ….” It is hard to determine what happens when the state does not create the conditions for exercising a constitutional right. Does this mean, then, that the right cannot be exercised?  Yes, the right to work is guaranteed everyone. However the article envisages that the state must create conditions for the full exercise by citizens of the right to work, as well as to guarantee equal opportunities in the choice of profession and of the type of labour activity.  It further implements programs of vocational education, training and retraining of personnel according to the needs of society. Nobody knows how many years a state will require to create such conditions.[17].

According to figures from the Ukrainian State Committee of Statistics between January and September 2005 the average monthly number of those from the economically active part of the population aged from 15 to 70 was 22.3 million, of whom 20.7 million, or 90%, were engaged in economic activity, the rest did not have work, but were actively looking for it and were ready to begin employment, that is, according to the criteria of the International Labour Organisation (ILO) are classified as unemployed. The average monthly number of those unemployed was 1.5 million, or 7.6% of the number of those from the economically active part of the population in the mentioned age bracket.

In 2005 2.9 million unemployed Ukrainians used the services of the State Employment Service.  Of this figure 65.4 % visited the Service throughout the year. As of 1 January 2006 there were 903.5 thousand people registered with the State Employment Service, of whom every second person living in a rural area.  Of this figure, 97.6% were officially registered as unemployed, with more than two thirds being assigned unemployment benefit.

The number of registered unemployed throughout December 2005 rose by 8.9% and came to 881.5 thousand individuals, with the figure in rural areas increasing by 13.9 %, being 452.7 individuals, and in urban areas – by 4.0 %, or 428.8 thousand people.

   The level of registered unemployment as a whole over the country in December 2005 rose by 0.2%, and on 1 January 2005 stood at 3.1% of the working-age population. This rise was at the expense of people in rural areas, with the increase over the month being by 0.7% and the numbers reaching 5.5% of the working-age population. However in urban areas the level remained the same as in November, constituting 2.1%

  With the assistance of the State Employment Service, in December 2005 53.7 thousand people were found work which was 21.0% less than in the previous month, but 9.0% more than in December 2004. Among those found employment almost half (49.9%) were women. In relation to the overall number of people on the register during December, the number of those found jobs came to 5.2%. According to regions, the highest figure for this indicator was observed in Kyiv (24.3%), with the lowest in the Chernivtsi region (2.1%).


Table 3

Social protection of the population from unemployment

The number

Dec. 2004

Jan. 2005.

Feb. 2005.

March 2005..

April 2005..

May 2005.

June 2005.

July 2005..

Aug. 2005..

Sept. 2005.

Oct. 2005.

Nov. 2005.

Dec. 2005.

The number of registered unemployed at the end of the period (thousands of people)















The level of registered unemployment at the end of the period (in % of working-age part of the population)














The demand for workers at the end of the period, (thousands of people)














Competition for one free working place (vacancy) (no. of individuals)














The number of unemployed people who were found jobs over the period (thousands of people)






























An important step in making the unemployed more competitive on the labour market is vocational training and re-training. In December 2005 the State Employment Service sent 11 thousand unemployed individuals on training courses so that they could learn a new profession or specialization, as against 13.5 thousand in the previous month. Overall at the beginning of January 2006, such vocational training in educational institutions of all types had been attended by 33 thousand people (3.7% of those registered unemployed).

Another element of the right to work is the guarantee by the state of protection from illegal dismissal.  Yet many violations of labour legislation are specifically linked with infringements of this law.

One could cite as example of this M. Horvat’s labour dispute which combines violations of many labour laws: the right of dismissal, the right to reinstatement, and the right to seek work. The essence of the matter was that M. Horvat who worked as Director of the House of School Students was invited to work in the position of Deputy of the Mayor of Mukachevo on humanitarian issues, but was soon dismissed from this post, and in violation of labour legislation was not reinstated at her previous job, and was in addition obstructed in seeking other work.[18].

With regard to protection of an employee’s labour rights, Ukrainian legislation sets down various means for defending these, including through forming commissions with representatives of the employees and the administration to resolve issues related to pay, conditions of work, and the rights and duties of the management of the business. In order to regulate conflicts between the administration and employees, the Law on resolving labour disputes introduced both arbitration courts and a National Mediation and Conciliation Service. According to official statistics, over the first 9 months of 2005 this Service reached resolution in 70 out of 213 labour conflicts which it considered.

Citizens of Ukraine are guaranteed the right to strike “for the protection of their economic and social interests”, however it is stipulated that strikes must not jeopardize national security, health protection, and the rights and freedoms of other persons.  As noted in the US State Department’s Country Report on Human Rights Practice in Ukraine for 2005, the government on the whole respects the right of workers to strike.  There is a ban on strikes only for the following:  employees of the Prosecutor’s office and the courts, military servicemen of the Armed Forces, officers of the Security Service and of law enforcement agencies, civil servants, and also those working in the transport sector.  Employees of the fields where the said restrictions apply risk imprisonment for up to 3 years if they go on strike.[19]  During 2005, according to official statistics, there was a strike at one enterprise (408 employees). To compare: in 2003 there were 15 at 15 different enterprises, and in 2004 – 4 at 4 enterprises.

As already mentioned, there were certain positive moves in 2005 reflected, for example, in the increase in the average wage in Ukraine.

However at the same time, the overall amount of unpaid wages for 11 months of 2005 rose by 0.2% and on 1 December 2005 amounted to 1.1 billion UH. The size of the debt was equal to 10.7% of the Employment Fund calculated for November 2005, against 14.8% a year earlier. From January to November 2005, the debt to employees of economically active enterprises decreased by 0.9%, or by 5 million UH and as of 1 December totalled 580 million UH.  Overall, from each 100 UH not paid out to economically active enterprises, 50 UH were owed their employees by industrial enterprises, and another 19 – by agricultural enterprises.

  At the beginning of December 480 thousand people had not received their earnings on time, this constituting 4.4% of the overall number of employees. Each of these, as of 1 December 2005, had not been paid on average 938 UH which was around equal to the average wage for November.

  According to the Ministry and other state executive bodies, in the educational institutions which are under their jurisdiction, debt on payments of student grants and financial provisions to students, cadets and school students over November 2005 decreased by 20.3%, and as of 1 December 2005 amounted to 907.1 thousand UH, this being greater than the amount of debt on 1 December 2004 by 12.5%, or by 0.1 million UH.


Changes in indebtedness against wages can be seen in the following graph.[20]:

Changes in indebtedness against wages in 2004 – 2005 (as of the 1st day of each given month)

One should also touch on the issue of trade unions in Ukraine and specifically on their freedom to function. As stated in paragraph 3 of Point 3.1 of the Judgement of the Constitutional Court of Ukraine following constitutional petitions from some Ukrainian State Deputies and the Human Rights Ombudsperson regarding the conformity with the Constitution of Ukraine (constitutionality) of Articles 8, 11, 16 of the Law of Ukraine “On trade unions, their rights and guarantees of activity” (concerning the freedom to form trade unions) from 18 October 2000 №11-рп/2000: “The imposition of registration (taking on the status of a legal entity) as the single means of legalization impedes the  enjoyment of the right to form trade unions “on the basis of the free choice of their members” (paragraph three of Article 36 of the Constitution of Ukraine), since citizens may deem it necessary to join together in order to defend their labour and socio-economic rights in such a trade union (as a rule, without many members) which does not necessarily need to have legal entity status”.

However this Judgment of the Constitutional Court is still not being implemented, with the legal collision in the registration of trade unions in Ukraine unchanged.  A Draft Law of Ukraine № 4389 „On introducing amendments to Article 3 of the Law of Ukraine “On state registration of legal entities and individuals – entrepreneurs” (regarding registration of trade unions) from 18 November 2003 which was aimed at resolving the problem was rejected by the Verkhovna Rada on 4 October 2005.[21]



The Constitution of Ukraine guarantees everyone the right to health protection, medical care and medical insurance.(Article 49). 

For a civilized society the main indicators determining the functioning of the health care system are access to and the quality of health care. Demands with regard to these fundamental indicators are constantly put forward by the public in most developed countries. The Amsterdam Declaration on the Rights of Patients under the auspices of the WHO Regional Office for Europe identified accessibility and quality of medical services as the fundamental social rights which need to be implemented as fully as is feasible by European states in their systems of health care. As well as the political and social grounds for these requirements, the implementation by the state of people’s right of access to a high quality of medical services also serves to define the level of development of any given state. For Ukraine the degree to which the state ensures equal access to health care could become one of the main criteria on which its entry to the EU will depend. 

  According to international guidelines, access to health care is a multifaceted concept which envisages balancing many factors within the framework of strict practical limitations connected with the specific resources and capabilities of any given country: staff, cost-financing, technical and transportation means, freedom of choice, public awareness, the quality and distribution of technical resources.

A balance of these elements to maximize the amount and quality of the health care really received by the population defines the nature and level of its access.[22].

In Soviet times and during the first years of independence there were virtually no restrictions on the provision of medical services. Only with regard to some types of services (medicines for outpatients, cosmetic treatment, dental, hearing and artificial lens) was there an unspoken rationing reflected in the free provision of those services, however no more than a set norm. For the majority of the population they had to be paid for, however certain categories belonging to vulnerable groups enjoyed concessions.

In 1998, a Resolution of the Cabinet of Ministers of Ukraine established payment for a number of medical services provided in state and municipal institutions of health care. It was declared that the list of services for a fee would include only those types of medical services where the health of the patient would not be endangered were the services not to be provided. However the services for which a charge was made also included services connected with the provision by treatment and preventive medicine institutions of all forms of health care (aside from emergency care) which were not part of their main activity: medical examinations and treatment of patients, referrals to doctors with private practices, transplantation of organs and tissues, reconstructive operations, virtually all dental treatment and a lot more. In addition, for services not included in the list, treatment and preventive medicine institutions were allowed to take payment from patients as voluntary compensation which in essence was a veiled form of private health care . It was envisaged that only medical services for children would be kept free of charge.  Basically, as a result of that Resolution, the range of medical services which could be subject to a charge during that period was virtually unlimited. [23].

The unregulated spread of state medical services not provided free of charge was the reason for a sharp decline in access to health care. A nationwide survey involving 48.2 thousand people that was carried out by the Ukrainian State Committee of Statistics from October 2000 to October 2001 showed that 28.7% of households were not in a position to receive the medical care that members of their family needed.  According to these figures, the level of access had slightly improved against the analogous period from 1999 – 2000 (35.3%), however the level of access remained low. Asked what they saw the main reason for this to be, the overwhelming majority of those surveyed named the high cost of medicines, items for home care and health care services.  Due to financial difficulties, in case of illness 10 % of households could not obtain necessary treatment in hospital.  The study also revealed that patients being treated in hospital were forced to provide for their own needs, for example, medicine – 92.7%, food – 83.13%, bed linen – 63.9%  These services were supposed to be provided by the state system of health care. .

The reduction in access to health care and the unsystematic introduction and mixing of medical services either free of charge or for a fee in state and municipal hospitals and clinics in Ukraine aroused mass protest and a storm of claims.  Finally in 1998 the Constitutional Court of Ukraine passed a judgement declaring it unconstitutional to charge fees from patients for medical services. However the abolition of charges for services was still not accompanied by a change in the approach to financing and / or reform of the field, and as a result the situation in such hospitals and clinics continued to worsen. In search of new forms of funding which would not contravene constitutional norms, the Verkhovna Rada and the Cabinet of Ministers began to apply the Law of Ukraine “On the fundamental principles of health care legislation in Ukraine” which allows for treatment and preventive medicine institutions receiving voluntary charitable payments and donations from legal entities and individuals.

  In May 2002 the Constitutional Court of Ukraine considered for the second time the official interpretation of the Article of the Constitution regarding free health care and passed a final judgement that in state and municipal institutions health care should be provided to all citizens regardless of the amount of care “without prior, current or later payment”.

The levying of insurance contributions from individuals in accordance with the Law “On mandatory state social medical insurance” was also deemed a violation of the constitutional norm.  At the same time, the qualification was made that in state and municipal institutions a charge could be imposed for services falling outside the category of health care. It was also recognized as admissible to attract additional funding through voluntary medical insurance and solidarity participation of the population in financing the sphere (hospital funds, loan unions, funds). With this decision, the state thus suspended the practice of compulsory payment for medical services in state and municipal hospitals and clinics, granting the right only to have voluntary forms of so called compensation. However at the present time such compensation rarely takes a voluntary form.

In connection with the judgement of the Constitutional Court of Ukraine, specialists these days try to establish an artificial distinction between the terms health care and medical services. However, despite the nonetheless remaining lack of terminological coordination, the government still defined a list of services who cannot be financed from the State Budget (2002). Access to such services in state and municipal institutions is offered only for full payment by the patient or third parties (legal entities or individuals).

It should be noted that there remain no clear criteria for defining services for which a charge is made.  However, based on their spectrum, the government decided to allow a charge to be made only for those services that do not constitute high priority medical needs, namely, cosmetic treatment, fertility treatment, anonymous examination and treatment of alcoholism or drug addiction, treatment of sexually-transmitted diseases, abortion, aside from abortions carried out on medical grounds, prosthesis, including teeth, ear and eye replacement, rectification of eyesight with the help of glasses or contact lenses, dental treatment provided in state funded departments, health or illness-prevention procedures (massage, gymnastics, etc), medical examinations when beginning a job, for gaining a driving licence, for a firearms licence or the relevant periodical checkups, provision of phoniatric help or treatment of speech disorders among adults, care and treatment of patients at home if they cannot be treated on an outpatient basis, diagnostic examination and consultation of individuals where not on the referral of a doctor, parents staying in a hospital with children over the age of six if this is not determined by the state of health of the child, medical services provided to sports competitions, mass cultural and public events, medical treatment of foreign nationals, etc.[24].

At the same time as these decisions related to the implementation of its social guarantees linked with the need to improve access to health care and provision of medicines, the state granted certain concessions to some categories of the population.  Through the appropriate normative acts, people belonging to “unprotected” or vulnerable groups of the population, as well as people suffering from some diseases with public impact or grave illnesses, were released from payment or began receiving medical services at concessionary rates. These concessions, in the main, covered medicine during outpatient treatment. Medicaments envisaged as being provided free of charge or at concessionary rates were those included in the list approved by the government and on prescription from a doctor where the patients lived.

Spending linked with the granting of concessions of medical services is paid for by general funding allocated by each budget for health care. However, given the generally pitiful state of financing of the sphere, the possibilities for providing concessions are extremely limited. In practice, even patients from vulnerable groups of the population are largely forced to pay themselves for these services.

It would be hard to leave without mention the problem which arose as a result of the Order of the Ministry of Health № 360 from 19 July 2005 “On approving the Rules for issuing prescriptions and request orders for medicines and medical items of the “Rules and Procedure for issue of for medicines and medical items from chemists and their structural subdivisions: Instructions on the procedure for keeping, registering and destroying prescription forms and request orders”.  This Order established strict procedure for issuing the majority of medicines only on prescription, as well as the requirement to write out prescriptions for patients in hospitals. The same Order also prevented the circulation of some forms of combined medicines, shortened the period that a prescription was valid for, significantly complicated the procedure for issuing prescriptions, etc.[25]  This normative legal document attracted considerable criticism from the press and as a result, on 20 October 2005 the force of the most controversial provisions of the Order were suspended.

One must acknowledge that current state commitments in the area of health care are of a declarative nature and their list does not match the economic capacity of the country. Attempts to extract money from individual in any form when receiving health care in municipal and state health care institutions contravene the constitutional “norm” on free health care institutions in state or municipal ownership and financed by budgets at any level.

Mr K., for example, who was not living at the place where he is registered, at the end of 2005 got in touch with Polyclinic No. 3 of the Desnyansky district in Kyiv asking for a doctor to be called out because he was ill. A doctor arrived, wrote out a prescription, however said that for any further treatment Mr K. should fill in an application to the polyclinic, addressed to the chief doctor and pay the related charge. The Law of Ukraine “On freedom of movement and freedom to choose one’s place of residence” prohibits the exercise of any rights being made contingent on ones place of registration. Despite this, Mr. K. was refused treatment without the said application. Since he required urgent treatment and not a drawn-out court wrangle over many months, he was then forced to write the application addressed to the chief doctor of Polyclinic No. 3, N.A. Arkhypenko. Following this, he paid 40 UH into a charitable fund unknown to him via the cashier of the polyclinic for treatment in the polyclinic during 2006 not according to his place of registration.  He was issued with a receipt which, together with application, was attached to his medical card and which formed the entitlement for his treatment. The forms of control over the use of funds of the said  charitable fund  (the polyclinic may not found such a fund since according to the Law on charitable organizations only individuals and not legal entities may be founders), as well as the grounds for the actions of the polyclinic personnel, remain unknown.

The gap between the proclaimed guarantees of free health care and the economic capacity of the country has become the subject of heated debate regarding a realistic program of the state’s duty with regard to providing health care to the population. The legal base for the creation of such a program was the Law of Ukraine “On state social standards and state social guarantees”. This normative act defined the legal basis for the formulation and application of state social standards and norms. Social norms according to the law are defined as the indicators for basic requirements, including the need for medical services. Included among state social norms in the area of health care are the following: the list and scope of the guaranteed level of health care provided to the population in state and municipal health care institutions, the norms  for health care: containing the scope of diagnostic, treatment and illness-prevention measures, indicators for the quality of health care, etc.

According to the law on safeguarding state social standards and norms, the funding norms for the everyday expenses on health care per person need to be calculated, as well as the funding norms for everyday expenditure on managing the network of health care institutions and norms for state capital investment in the building of such institutions.

  All of this prompted the government to approve the Program for providing citizens of Ukraine with guaranteed state free health care with this list of types of health care to be provided by state and municipal health care institutions:

-  Ambulance and emergency services;

-  Out-patient and polyclinic care;

-  Hospital treatment;

-  Emergency dental treatment;

-  pre-doctor assistance for inhabitants of rural areas;

-  sanatorium and rehabilitation care for the disabled and patients in specialized and children’s sanatoriums;

-  care for children in children’s homes;

-  medical and social expert opinions on ability to work;

The Program thus, for the first time, affirms the principle of coordinating state commitments with the expected size of the budgets for health care. However Ukrainian specialists suggest doubt with regard to the possibility of creating an efficient and balance program of state commitments without introducing amendments to the Constitution which would legalize the participation of citizens in paying for medical services, and without implementing consistent policy with regard to a structural reorganization of the health care system.



In order to enjoy the right to education enshrined in the Constitution (Article 53), the implementation of a whole range of high-priority tasks needs to be guaranteed, with these including:

-  ensuring access to a high quality of education and comprehensive development of the sciences;

-  introducing effective mechanisms to broaden young people’s access to a high quality of education;

-  implementing a system of state support for gaining secondary and higher education and entering the labour force;

-  promoting and inculcating principles of autonomy and self-financing in all institutes of higher education regardless of their form of ownership;

-  developing and stimulating the preparation of a new generation of national textbooks, books and methodology backup and creating conditions for the use of the Internet in schools;

-  implementing a single system of testing for entry into higher educational institutes.

At the present time the government is planning and is already gradually carrying out the first conceptual steps towards reforming the system of education. On should particularly note the work on implementing a single system of institutions, state loans for gaining higher education, reforms of the mechanisms for establishing teachers’ salaries, preparation of new methods of learning.  Some of these steps already received support through amendments to the 2005 Budget and amendments to the Budget Code.

Up till now the government has concentrated on raising the salaries of teachers, abolishing their partial employment and strengthening the role of the Ministry of Education and Science which is in charge of some higher educational institutes.  The government is thus trying to resolve problems in education by increasing state budgetary funding, but is not proposing any mechanisms for ensuring stability in the system of education.

At the same time, Draft Law № 3322 from 2 April 2003 “On introducing amendments to the Law of Ukraine “On education” is an attempt to make changes to Ukrainian legislation on compensation by students for state spending on their training if they refuse to work in the job assigned.[26]  It is, in particular, suggested that Article 56 of the Law of Ukraine “On higher education” be supplemented with a paragraph stating the following: “A graduate of a higher educational institute who studied at the expense of the State Budget, in the event that he or she refuses to work for three years in the job assigned shall be obliged to pay the state back the spending on his or her education with inflation indexation according to the procedure established by the Cabinet of Ministers”.

In connection with this, Article 53 of the Constitution of Ukraine guarantees citizens the right to obtain free higher education in state and municipal educational establishments on a competitive basis, that is, without making payment in any form for the education they receive. The adoption by the Verkhovna Rada of amendments to the Law “On higher education” would thus contravene the Constitution of Ukraine.  Furthermore, according to the International Labour Organization Convention on the Abolition of Forced Labour, No. 105, ratified by the Law of Ukraine № 2021-III from 5 October 2000, Ukraine commits itself to suppress and not to make use of any form of forced or compulsory labour, including “as a method of mobilising and using labour for purposes of economic development” (Point b of Article 1 of the said Convention). The provisions of the Draft Law which force graduates of higher educational institutes to work in jobs “assigned” therefore run counter to the international commitments Ukraine has taken upon itself in accordance with ILO Convention № 105. In this connection, a huge number of appeals have been sent by student organizations, including the Ukrainian Association of Student Self-Government, “Studentske bratstvo” [“Student fraternity”] and the Ukrainian Students’ Union, and as a result the changes to this day remain in draft law form.

It is important to note that even secondary education in Ukraine has concealed charges since parents regularly make payments for the development of the school by transferring money into charitable funds. In this, the founders of such funds remain unknown, and there is also no mechanism of control over the spending of this money.

A cause for concern is the decision of the Cabinet of Ministers of Ukraine to reduce the ratio of contract students in state higher educational institutes to 50% and to increase state-commissioned orders in 2005. This step will lead to a reduction in the financial provisions for state higher educational institutes from private sources and will contradict the principle of increasing their autonomy. Furthermore, merely increasing the ration of students who study on state-commissioned orders will not resolve the issue of whether the education system meets the needs of the labour market.

  Another important issue is that of vocational training. Vocational and technical education is defined by the Law of Ukraine “On vocational and technical education” as a composite system of education which provides initial vocational training, re-training, and professional development training. Unfortunately this part of the education system is in a far from ideal state which the statistical data on the number of vocational and technical educational institutions demonstrate.


Graph 1: The number of vocational and technical educational institutes [VTEI] over the years 1996-2005

Number of VTEI

 As we can see, in 1997 the number of vocational and technical educational institutions fell to 151, and there was a reduction overall, from 1995 to 2005 of 207 institutions.

This is also confirmed by figures from the check carried out of the use of Ukrainian budget resources on the development of vocational and technical education.[27].  The investigation particularly highlighted mass loss of professional skills, an increased shortage of professionals, especially in complex scientific technology, the aging of personnel with a firmly entrenched attitude among young people that a career as a qualified professional has few prospects.

The policy by the government of distancing itself from the issue of Ukrainian vocational and technical education, the lack of direction of nationwide state policy in the area of training and providing qualified personnel for the Ukrainian economy have led to the decline and critical state of this part of education.

The Cabinet of Ministers of Ukraine has not provided for the implementation of the decisions of the Verkhovna Rada adopted as the result of consideration of the problems of vocational and technical education on “Government day”, 11 March 2003. The implementation of innovative information technology, modern techniques and methodology, the modernization of the physical-technical base, the creation of legal and economic mechanisms for stimulating interest from employers and investors in the development and renewal of labour resources of the state, did not become priority areas of policy of the government in the area of vocational and technical education when preparing the State Budget of Ukraine for 2004-2005. The State program for the development of vocational and technical education for 2005-2010 has still to be approved.

  In contravention of Article 19 of the Law of Ukraine “On vocational and technical education”, the Cabinet of Ministers of Ukraine did not define the needs of vocational and technical education institutions for 2004-2005. Furthermore, the audit and analysis of the statistical data regarding the state of Ukrainian

vocational and technical education, carried out by the Accounting Chamber, highlighted its uneven and unsystematic development, and demonstrate the lack of management of  vocational and technical education and coordination between the Ministry of Finance, the State Treasury, the Ministry of the Economy and the Ministry of Education and Science.

The formation, financing and implementation of state-commissioned orders in 2004-2005 took place without any analysis of the situation with regard to staffing of the fields and future forecasts for the development of the labour market. The Ministry of Education and Science did not ensure implementation of the Law of Ukraine “On the supply of production for state needs” or the Procedure of forming and placing state orders for the supply of production for state needs and control over their fulfilment, approved by Resolution № 266 of the Cabinet of Ministers of Ukraine from 29 February 1996.

In the absence of state contracts between the state commissioning party and the contractor, the State Treasury, the financing of the spending of vocational and technical education institutions was carried out in accordance with estimated allocations, without linking these to the actual orders, as a result of which the budget resources in 2004 of an overall amount of 942.5 million UH and in 2005 of 998.4 million UH was used with budget infringements.

In order to resolve the problems present in the Ukrainian education system, the Blue Ribbon Commission recommended considered the following:

The creation of a system for monitoring the quality of education.  Standards for the functioning of the education system and effective mechanisms for supervising their observance both by the state and by the public, complying with the best models worldwide, need to be established.  It would also be good strategy for Ukraine to take part in international comparative studies (PISA, TIMSS, and others), and to carry out forecasting for the development of education and the needs of the labour market. Without the creation of this system, the present initiatives of independent testing centres and other reforms will remain isolated measures unable to fulfil a general course towards renewal and modernization.

The creation of mechanisms for public control over resources allocated to educational institutions at local budget level. Such an approach would ensure the transparency of funding procedures and would increase the efficiency of the technical servicing of schools and other educational institutions, their level of physical and technical provision. It is also important to create modern financial and market mechanisms with the possibility of accommodating resources from different sources.

The development of mechanisms for bringing the education system into line with the modern needs of the labour market. This requires a narrowing of the gap between the demand for specific professions and the possibility of gaining education to gain such qualifications; bringing the curriculum closer to the requirements of the labour market and the social needs of the community; creating market mechanisms for the preparation and choice of textbooks; the creation of an effective system for ongoing professional development.

The creation of a transparent and effective system for motivating those working in education through encouraging them to improve their skills; a substantial increase is required in teachers’ salaries depending on their level of qualification; a review of mechanisms for providing teachers with the necessary teaching and methodology material; the organization of jobs.


6.   Recommendations

1  The fulfilment by the state and other parties engaged in social activity of their social functions should involve the following legal and economic mechanisms:

а)  Legal mechanisms should be ensured by drawing up and adopting a Social Code of Ukraine, or undertaking another form of legislation generalization for the thousands of normative acts in this area, ensuring however that they comply with the Budget, Family and Civil Codes.

б) Economic mechanisms should stimulate the development of the country’s economy, its social direction, the increase in people’s income, first and foremost in their earnings. We need a radical reform of the system of work remuneration, restoration of the incentive function of wages, definition of the price of work, an increase in the proportion of wages in the general costs of production, in the gross national product and in the income of the population.

2  Ukrainian legislation should be adapted to meet the requirements of the European Union, and more importantly, to guarantee levels of payments which conform with European standards.

3  The European Social Charter should be ratified as a part of the guarantee of economic and social rights in Ukraine, this making it possible to raise the protection of these rights to a higher level.

4  A contemporary system of social security and social insurance must be created since stable growth in the standard of living and social harmony will be possible only if systematic changes are made.

5  The allocation of most types of assistance needs to be linked to the family’s level of income. The actual mechanism for receiving social assistance also needs to be regulated. The first step towards this would be introducing a single application to receive any forms of assistance. Most important is to generalize and make accessible for employees of social protection agencies information about the status and real income of applications. To this end it would be necessary to use not only figures from the Ministry of Labour, but also data from the State Tax Administration, bodies of the Ministry of Justice and of Internal Affairs, and insurance funds.

6  A system accommodating funding for health care from many different sources, with elements of both public and private financing, needs to be developed.  Mechanisms for financing need to be explained clearly to the public, so that all concerned individuals understand the possible conditions of payment.  Distribution of responsibility and powers according to this scheme would be as follows: society must ensure acceptable subsidizing of necessary medical assistance to those who need it, doctors must within acceptable boundaries take part in providing such subsidized care, and the government must manage this activity.

7  An effective system of loans to cover studies in higher education institutions should be created.

8  The system for finding work for students of state-owned higher education institutions after their graduation should be improved.

9  The independence of higher education institutions should be broadened, and self-government developed.

10  Difficult issues regarding accreditation and certification of non-state educational institutions need to be resolved.

11  The system of vocational and technical education as one of the key factors in the development of Ukraine’s economic is also in need of improvement.

12  A system should be created for monitoring the quality of education, the mechanisms of public control over resources allocated to educational institutions at the level of local budges, mechanisms for bringing the education system into line with modern needs of the labour market, as well as creating transparent and effective system of incentives for educational workers through encouraging their professional development.

[1]  Prepared by Maxim Scherbatyuk, UHHRU

[2]  The European Social Charter:

[3] Point 10 of the Action Plan for fulfilling Ukraine’s duties and commitments arising out of its membership of the Council of Europe, passed through Presidential Decree №39/2006 on 20 January 2006. According to the Plan, the Charter should be submitted to the President by 1 April 2006. The Action Plan is available online (in Ukrainian) at:

[4]  The figures are given without taking into account those employed by statistically small businesses and individual businesspeople. The statistics also give the official figures for remuneration, whereas a significant part of this pay remains in the shadow economy.

[5] The social and economic situation in Ukraine in 2005:

[6]  In the Law of Ukraine “On the State Budget for 2005” the minimum subsistence level is set at 382 UH.

[7]  The Law of Ukraine “On introducing amendments to the Law of Ukraine “On the State Budget for 2005” and some other legislative acts of Ukraine”:

[8]  The Demographic situation (March 2005):

[9]   Draft Law of the Housing Code of Ukraine № 3584 from 8 August 2005 available (in Ukrainian) online:.

[10]  Analysis of social and economic policy “A New Wave of Reform”, carried out by the Blue Ribbon Commission for Ukraine in 2005 available online in Ukrainian and English:

[11] Presidential Decree “On strategies for overcoming poverty”:

[12] Letter of the Ministry of Labour and Social Policy of Ukraine from 18 February 2006 №12/10/137-06

Letter of the Ministry of Labour and Social Policy of Ukraine from 13 February 2006. №2/18/157-06

[14] Resolution of the Board of the Fund for Mandatory State Social Insurance with regard to unemployment No. 328 from 25.04.2005.

[15] Analysis of social and economic policy “A New Wave of Reform”, carried out by the Blue Ribbon Commission for Ukraine in 2005 available online in Ukrainian and English:  

[16] On the results of an analysis and check of the formation and implementation of the Budget of the Pension Fund of Ukraine / Prepared by the Department on Social Policy and State Administration, and passed by Resolution No. 17-2 of the Board of the Accounting Chamber from 9 August 2005 / – Kyiv: Accounting Chamber of Ukraine, 2005. – Issue No.  20.

[17] R. Romanov  „Social and economic rights in the Constitution of Ukraine: myth and reality” // Human Rights in Ukraine: the situation, issues, prospects. – Kyiv: “KM Academia” .-2003.-p.47 (in Ukrainian)

[18] V. Martyn “Labour dispute” // Dzerkalo tyzhnya [The Weekly Mirror] №12(591) Saturday, 1-7 April  2006 online (in Ukrainian and Russian) at:

[19] Country Report on Human Rights Practices - 2005  Released by the US State Department’s Bureau of Democracy, Human Rights, and Labor, March 8, 2006 (in Ukrainian and English)


[20]  Figures from the State Committee of Statistics of Ukraine

[21] The Draft Law „On introducing amendments to Article 3 of the Law of Ukraine “On state registration of legal entities and individuals – entrepreneurs” (regarding registration of trade unions) available in Ukrainian at:

[22] The World Medical Assembly, Vienna, 1988

[23] V. Lekhan, V. Glukhovsky, A. Huk: “Access to health care in Ukraine” // Ukrainian Journal on Human Rights,  №2 (2) 2005.

[24] Resolution of the Cabinet of Ministers from 17 September 1996 № 1138 „On approving a list of services which are provided for a fee in state health care institutions and higher medical institutes”.:

[25] Order № 360 Comments and proposals  // Apteka [Chemist] № 37(508) from 26.09.2005. See also the KHPG website:

[26] Draft Law № 3322 from 2 April 2003 “On introducing amendments to the Law of Ukraine “On education”

[27] On the results of the check of the use of State Budget of Ukraine resources, allocated to the Ministry of Education and Science of Ukraine for the training of personnel / Prepared by the Department on the science and humanitarian spheres, and approved by Resolution of the Board of the Accounting Chamber from 27 December 2005 № 31-3 / – Kyiv: Accounting Chamber of Ukraine,  2006. – Issue no. 4.


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