Marianna Onufryk: there is an army of beneficiaries in Ukraine
Expert on social policy of the Institute for Social & Economic Studies Marianna Onufryk in the interview for Civic Space told in details about specialties – successes and failures – of reforming social insurance (pension reform, social benefits) and analyzed accents on which government and society have a lot to work on.

Civic Space: What was already done in the period after Maidan?
Marianna: Unfortunately, it is true that we haven’t a lot to be proud of, because coalition agreement was done in a small extent, maybe for 10% and not more. A lot of things were developed by the Government in the sphere of draft laws and were introduced, but it weren’t voted, so, the reform didn’t happen in fact. But let us say that those introduced draft laws were imperfect. Scilicet, we have had questions to them, we, as society, supported them, but in the first reading we tried to bring to the Government a necessity of refining those draft laws.
New Government has withdrawn the draft laws. Now the new ones were introduced, but let’s talk about them later. The Government is proud of the subsidies sphere reform. We can’t say, that it was a reform, but the rendering of documents was significantly simplified, was announced that the bigger quantity (in 4-5 times) of households could become a subsidiants, but, in fact, it is a big question whether it is worth brag about this. Scilicet, subsidy it is consequence of the fact that a large number of people in Ukraine are not able to pay utility tariffs and that’s why they are considered under the poverty line and the state helps them. I think here is nothing to be proud about. By the way, regarding to this, it was a very sad last review (the report) of the Minister Andriy Reva at the plenary session of the Verkhovha Rada of Ukraine during the “Hour of questions to the Government” where he spoke and reported only about subsidies. The other great amount of such aspects weren’t sounded or announced. A new minister declared what he was going to make – there are five priorities, and one of them is a monetization. Of course, it is a very good initiative, it was written in the previous Program of the Government activity, it is written in the current, but… What is monetization? It is transfer of the benefit’s cost to the people, which is now state pays directly to the accounts or to the hands. It means that people can personally decide how to spend this money. For example, if you have benefit on public transport, Kyiv City Card, a certain amount will be transferred and you can use it on your own. However, there are other options, of course. So what is the problem here? The problem in that we have now in Ukraine 19 billions 168 thousands beneficiaries. This is a huge amount, simply an army of beneficiaries. So, if now we will monetize all these benefits, the one more whole Ukrainian budget will be not enough for that and minister Rozenko proved this time ago. That’s why in the Coalition Agreement in the Program of the Cabinet of the Ministers activity was such rule as liquidation of inefficient benefits. For example, for few years we have such practice that in the Law of Ukraine on the State Budget for every year was written a point with mysterious wording: some provisions of these laws will be implemented when sufficient financing. Now it was written even in the Budget Code, in the Transitional Provisions, and in thirty Laws of Ukraine. So, people will never get these benefits, because they never have funds and it was planned to cancel them. By this time they were not canceled.
Firstly, it is necessary to establish order in the benefits. Secondly, it is necessary to establish order in the categories of the beneficiaries and it the beneficiaries themselves. This Unified Roster of the Beneficiaries, on which all our statesmen linking on, acts from 2003. But it is incredibly imperfect, publishing almost on the paper transmitters and doesn’t allow to track is this person existing, are the documents filled in the right way, and for example, does one same person registered in Cherkaska and Kyivska oblast at the same time. So, the functionality of this Roster is very limited. This is simply a list, which doesn’t allow tracking if the same person relates to the few categories of the beneficiaries, for example. Therefore, this question also needs an improvement.
From the name of the Institute for Social & Economic Studies, we putted forward five requirements to the Government in the social policy sphere when was the election of the new Government of Volodymyr Groysman. And the first one is launch a single Register, unified information & analytic system in the sphere of social protection, on which not once we have taken loans from the World Bank. Unfortunately, it hasn’t yet launched, although there were Acts of rendered services, so these money is missing somewhere. It is unclear what the situation there is. And this is extremely important. About the importance of such Register of all recipients of social services, benefits, allowances and so on in social protection system, says the recent wave of scandals in the plan of verification. The Ministry of Finance is begun to verify all the benefits, and they talk about the enormous abuses allegedly in the 60 million UAH, although, by this time, we have not seen any concrete evidence that there were any abuses or violations, although, of course, they are, because this system on paper transmitters can do everything.
A system in the pension fund is more or less organized. From the 2000 conducted an electronic accounting and it doesn’t allows such manipulations. That’s why a requirement #1 to bring to the order all beneficiaries, all recipients of social assistance, all services and all providers, scilicet, to bring everything to the order that will give an opportunity, firstly, to see the real scale of our social tragedy and, secondly, to plan expenditures for the next periods. Because, by this time, everything happening by this principle: in the previous year was this amount, now we increased it a little, and this part is for tariffs. Scilicet, everything is being done something like that, randomly.
Let’s talk about other spheres. The reform in the social services sphere is very important and it is one of our requirements. What is the meaning? Now in fact the state has monopoly position on the market of social services, however in all developed countries the most social services provides non-governmental organizations. They are acting in our country too, but only on the parents’ money. What are the social services? For example, rehabilitation it is psychological support, adaptation, shelters for the homeless, psychological help for the people with HIV/AIDS, so we have approved list of social services. In our country it monopolized very tough. The state pays for itself for providing these services. However, in the whole world there are various principles such as social order, when a tender is announced. For example, in our town we have approximately 15 homeless, we need 15 beds, and somebody of NGOs, which are acting in this sphere and has appropriate experience, can get these funds. This is much cheaper, efficient and there is no such corruption, or depredation, or manipulation.
The draft law, which was registered by the previous Government that was leaded by the Minister Pavlo Rozenko, caused many question – it is 50 to 50. Definitely, it is better that what we have now, but clearly not that one that we need to launch everything. Its disadvantages are, again, not predicted Register of social services beneficiaries. There is a Register of providers. But they are trying to avoid the word “electronic”. Somehow we are very hard transferring to the e-government.


Civic Space: In general, if we compare this benefits institution with developed countries, what is the difference?
Marianna: First of all, in our country it goes by the categories of beneficiaries. In Australia is the one of the most stable pension system because that the whole state help goes through the so called “means testing” – the evaluation of the personal welfare. So we need to clearly understand if a man really needs this benefit. For example, are all pensioners in Kyiv needs benefits for transportation, are all families with many children need this amount of help for childbirth. For example, now in Ukraine people with disabilities have not really big variation of funds amounts. It makes no difference if a person is absolutely recumbent and need help 24/7 or it is disability of the second category, when person can work. The targeted approach must prevail in all cases: for somebody will be enough to transfer funds for medicine or glasses once a year, and for somebody 5 thousands hryvnias will be not enough. And we have a total equalization of people, the type of help is the same for everyone, and often it doesn’t solve person’s life problems.

Civic Space: Our pension system: what is needed to be solve immediately, overcome, and change?
Marianna: The biggest problem of the pension insurance has two sides. On the one side it is the greatest expenditure article of the state budget, this year it is 145 billion UAH, from the Ministry of Social Policy released a huge funds amount for repayment of the deficit, because the Pension Fund is the bankrupt in fact and can’t handle with those volumes and tasks. On the other hand, despite these huge expenditures, our pensions are incredibly small. It is not enough for person to maintain a decent standard of living. To increase pensions it is necessary to collect more taxes: not only that the people are unemployed, and more enterprises start to go into shadow, so it is not a solution. We decreased USC – the deficit of pension fund increased. That’s why it is necessary to solve situation in other way and do radically reform. How is this solving in the whole world? Economy and financial crises that affect everyone exist in every country. For example, in 2008 crisis touched the whole world. And how it was solved? People out there gets pensions not from the one source, there happens a diversification of sources. While here, in fact, from declared in legislation three-leveled system works in the first level – “solidary”. It is totally state, maybe not the trough, but a sack. Scilicet, this is state compulsory insurance plus we are – from the state budget.
The third level – voluntary accumulation system – is in the very bad condition from the point of view of these portfolios, on the one hand, but on another hand it had showed very good results, they just need a stimulation to attract people.
We haven’t launched the second level and it is a huge problem as well – it is a compulsory accumulation level. What is a compulsory accumulation level? It means that a person directly by itself defers funds for retirement; it is absolutely individual account, the personal funds. In a case, when person doesn’t survive to the retirement age these funds are being inherited. These funds, from the state’s point of view, work for economy; in fact, it is that long investment resource that is lacking in Ukraine. These are lower interest rates, internal investments, the loans from the abroad will not be needed, because we will have our own formed internal funds that will be working in economy and they will be person’s property at the same time. This is our lacking source and that’s why we have such situation. Again, year ago, April 30, the law on pension reform was registered, it implemented pension accumulative system. It wasn’t brought to the chamber, because there were no desire, no political will to vote for it. Again, it was withdrawn as other governmental draft laws, because the Government had changed, but recently, May 6, a new draft law was registered, which was significantly revised in a very positive meaning. That means that if earlier we putted on requirements to this draft law to the second reading, which were really hard to overcome, so now 70 percent of these requirements are included in this new draft law, they are listened to us. So what was an advantage? The last draft law made this system compulsory for people under 35 years old. So people after 35 years old in fact stay overboard, they could depend only on the “solidary” or on themselves, as usual in our country. This law says that everyone will be participants of this accumulative system, but people, who have 10 years left to retirement, can refuse from this. The rates are relatively small: 2, 3, 4 and 5 percent for the first year and they will not increase. Again this is that negative moment, which is left – the loads lay on the employers. We think that for increasing such person’s consciousness and responsibility for own life on retirement is possible only when person in her payment bill that “I pay for my pension insurance”. First of all, it is an additional motivation for person to appeal employer for salary not “in envelope”, but for real, paid in full. Because these 2, 3, 4, 5 percent lay on your account and further this is your capital, you can rely on it, you can pass this by inheritance. Also, there are possibilities that are already written in legislation to use these funds at the time of fatal or critical illness. If person has, for example, cancer, she has an opportunity to use these funds for treat herself. This is your property and you can rely on it. This is a huge plus and what pleases the most that there were announcements from the new Minister of Finance who finds that the pension reform is incredibly important, he called her as his own key priority. Because from the previous minister Nataliyi Yaresko, ufortunately, we have no any support on the pension reform.
Now it is obvious that this question is solving for the people of future generation, pensioners, such as me and you, for those who are working now. It will be much easier for us, with every generation pensions will grow, it depends how long we will work and accumulate.
Talking about current pensioners, again, it is necessary to make order in this solidary system, because till this time, in fact, doesn’t canceled special pensions, doesn’t made order in part of that we have huge amount of workers’ categories, which have right for early retirement, there are people who worked in harmful conditions. The whole world thinks that this is wrong. If the state considers that this is necessary to appreciate the work of man it must be appreciated in terms of salary, but not the reference on that the pension will be greater. People start to live longer, accordingly, a person starts to work less, defers less, but then, on retirement, lives longer that requires increased spending, care. That’s why in Israel, for example, retirement age is 70 years, in some countries it is 67, in European countries it is 65. So this trend of increasing the retirement age concerns everyone. We have an excuse that our life expectancy 10 years less than in the developed countries. If Japanese, for example, have average life expectancy 80 years, than we have 72. But, in any case, we need to learn this. Then in front of the Government raises a huge challenge in creating working places for such people. Is it means that person doesn’t go on retirement? It means that she doesn’t get salary, but she must to work. Is it possible for such people to work if even among young people there is a huge level of unemployment? Now I’m studying different materials and I see that all countries concerned about the employment of older people, lengthening their active working life and finding works for them.

Civic Space: The tariffs grow steadily: how is that justifiably and does state asks us, as her citizens, if we are ready for this? Does consults with experts in particular?
Marianna: By the way, I was just recently invited to this commission on tariffs regulation. It was truly positive step, when all prices were equaled, but, again, I’m not expert in the energy policy, somebody says that anyway something was hidden in these tariffs and everything not that justly as it was declared. The social policy fights with consequences all the time, scilicet Ministry of Economic Development did not created workplaces and Ministry of Social Policy pays unemployment benefits. In the foreign affairs we have a problem, we have anti-terroristic operation, we have waves of IDPs – and Ministry of Social Policy solving these issues. So the question of tariffs in not exactly question of Ministry of Social Policy. By the way, one of the sharp questions and our requirement is real strategy on the IDPs and participants of the anti-terroristic operation. Because, more than two years from the beginning of military actions were passed and the state still hasn’t a view how she will be acting regarding the IDPs, regarding the occupied territories and people that live on that territories. There is no strategy integrated view absolutely. We have adopted complex program, fully declarative – something to improve, something to provide. But it doesn’t solve issues; people solve issues by themselves or by volunteers. This question is extremely sharp because these are millions for real. And as we know participants of the ATO faced with big difficulties after they have gave a part of their health, have lost for somehow their capacity for work, it is hard for them to find themselves. And of course one of our requirements it is question, which is pulled off on the back, it is anti-discriminative policy on the people with disabilities. Unfortunately, Ukraine in this case is extremely backward. For attention on their problems people with disabilities owe to the situation on the East of Ukraine. Because a lot of people with disabilities are ex-participants of the ATO, who started to attract attention in that sense that there are unavailable streets, there are no created workplaces, there are a huge mass of problems. It is extremely acute problem on children with disabilities. We have almost the only country in Europe where this issue is completely undeveloped, even on the legislative level there are no decisions on the inclusive study, there no obligations from the state to create inclusive classes. And again, this draft law on inclusive education was distressful, but we hope that it will be adopted. The last year Ukraine reported in Geneva on the UN Committee on the Rights of Persons with Disabilities. Such reports once for four years make every country that has signed this Convention on the Rights of Persons with Disabilities. Unfortunately, we had nothing to brag about. When the Committee gave its conclusions on nine pages, it was found that only five points were complied, everything else weren’t enforced. In our country orphanages continue to function, we have the most extensive system of orphanages in Europe. In the whole world they are shutting down and a moratorium on keeping a child in an orphanage was introduced. Were created all conditions, scilicet, patronage and foster families, family type children homes. This is a huge problem and it will be good to attract attention on it maximally. We call them “invisible people” – people, whom nobody sees, how they live.

Civic Space: The country of sadists?
Marianna: Yes. I had such case: I had a talk with wife of the national deputy, such ensured enough, and she says that when she was in the New-York for the very first time she was shocked to see how many people with disabilities meet on the street. And then she realizes that we have even more of such people but we just don’t see them, because they haven’t an opportunity to walk out from home, they haven’t the opportunity to work, they embarrassed because people shun them, parents are ashamed of their children, handing them to the orphanages. This is very sad and we need to fix this immediately and create equal opportunities for everybody.

Civic Space: Statesmen and society will read us: do you have a call on which they should pay attention to?
Marianna: You know, in our country we have such policy, especially in crisis, and many public figures doing this, when they oriented on the incomes and outcomes of the budget and trying to cut them. People say: social expenditures are bloated budget, it must be cut. But before cutting you must to find out what to cut and for whom to cut. It is necessary to make an analysis first and to cut thoughtless. And for doing this it is necessary to make an order in the Registers, beneficiaries, those ones who gets social support and to implement this targeted and address approach to every person. I’d advice just to think about human and not about budget deficit.
Of course, as a candidate of economic sciences, I clearly understand how it is acutely. But all our propositions… Keeping a child with disabilities in an orphanage institution, according to the Americans’ estimations, is three times more expensive for the state than it stay in the community. If we take a look on the expenditures’ structure of boarding schools that we have, we can see that only 12% are being spend on the child, everything else goes on the building maintenance, utilities and staff. This is unprofitable, not to mention a human life. Persons with disabilities are working in every country. I was at the internship in the US: there are people even with the hard form of disability have day work, they are making money and help state, paying taxes.
In the whole world there are early intervention institute. Disability of a child diagnosed very late in our country. A child starts to talk at three years old and due to that time it is very hard to see this difference and make a right diagnosis, give it a disability, which is, again, means nothing – they will just give you some money, some thousand hryvnias and mother should with them whatever she wants. And that’s why this early intervention institute is a prevention of deep disability and prevention of disability per se. Every one dollar spent on this early intervention system saves seven dollars for the state then on the living social keeping of this person. And here is saving of seven times and we should talk about this.
Of course, pension insurance must depend not on the category of the positions, not on that you are close to somebody and can fake a certificate of participant of the Chornobyl catastrophe or participant of the ATO, but only on the amount of your contributions. That’s why accumulative pension system is good: you made a certain amount and you can rely on it, you are using this. About such social justness, such target approach and of course in our context important subsidiarity and decentralization, which means to down all these benefits and mechanisms on the maximally low level, we should talk. Because at one time Rozenko, now Reva in Kyiv doesn’t know what a person with disability from the Kosiv region of Frankivsk district needs. He doesn’t know this, but he pays for this from the state budget. So the maximum down on the bottom when the community, which laid the obligation of social protection, decide if this person truly is a liquidator of the Chornobyl catastrophe, if such person is without adequate resources or cannot leave the house. Such targeted approach is the most important.