White Book of Reforms 2025. Chapter 12. Labour Market and Social Policy

Until recently, social support mainly took only two forms — privileges (benefits) and payments (social services existed at the local level but were chronically underfunded). This kind of support does not encourage people to join the labour market but aligns with their paternalistic expectations. Moreover, such forms of social support are politically attractive: until recently, every Parliament tried to introduce additional privileges for certain categories of people — miners, police officers, families with children, Chornobyl victims, etc. This allowed MPs to gain some “electoral points” but at the same time distorted the system and created significant problems for the future since canceling any benefit or payment (even if it no longer makes practical sense) is extremely difficult. Furthermore, as demonstrated by the recent scandal involving “prosecutors with [fake] disabilities,” a system based on benefits and payments creates incentives for corruption. 

The government that came to power after the Revolution of Dignity in 2014 had to simultaneously address longlasting and new issues. An old problem was the existence of a “zoo” of social benefits and payments, as described above, without a unified registry of recipients nor an understanding of whether these recipients are truly in need and how much these privileges cost taxpayers. This problem was exacerbated by a new challenge — the need to support internally displaced persons (IDPs), those wounded and families of those who were killed during the Revolution of Dignity and in the Anti-Terrorist Operation (ATO, this is how Ukraine’s resistance to Russian aggression was named in 2014-2017, in April 2018 it was renamed into United Forces Operation), while the state treasury was practically empty. In 2015, the government cancelled a number of benefits and subsidies and introduced energy subsidies to compensate for rising tariffs; however, it failed to take radical steps to resolve the problem due to the unpopularity of such measures. The transition to a modern customized model of social support began only in 2023.

Another long lasting issue is the existence of de-facto two labour markets — the official market (the public sector and some large companies) and the semi- or unofficial market (everyone else). In the official sector, employees are highly protected from dismissal and enterprises pay the Unified Social Contribution for them (the USC rate was reduced from 43-49% to 22% in 2015). In the unofficial sector, workers often work under short-term contracts or as sole proprietors (in which case they pay the minimal USC and income tax at a lower rate). Unfortunately, this problem remains unresolved, although the government has taken several steps to modernize labour market legislation (Figure 12.2). In 2019-2020, the government considered implementing a model similar to Denmark’s, in which companies can easily lay off employees while the unemployment support system provides financial aid and training for the dismissed. Such a model would make the labour market more dynamic and promote employment, but it was never adopted into law. 

Since the beginning of the full-scale invasion, the problem of structural unemployment has significantly worsened. A high unemployment rate (around 14% in 2024 compared to 9% in 2021) coexists with a labour shortage (in November 2024, 64% of companies reported a shortage of workers), as the education and skills of the unemployed do not match the needs of employers. Therefore, implementation of the described above “flexicurity” system with a focus on training and retraining is becoming increasingly urgent. Given the high level of uncertainty due to the war, such a system would allow businesses to adapt more quickly to changing economic conditions while officially employing workers and paying the required taxes. At the same time, it could help bring into the labour force those who are currently out of it, especially women and older people.

Reforms in 2014-2019

Labour Market

As mentioned above, in early 2015, the government halved the USC rate in hopes of reducing unofficial employment. However, since public trust in the government did not automatically increase, the expected formalization of labour relations did not occur, and USC revenues significantly decreased. The government tried to recover some of the lost revenue by raising the minimum wage and strengthening the powers of the labour inspection to detect undeclared workers. Meanwhile, businesses mainly used the “spare” funds resulting from the tax cut to increase salaries.

For a long time, a significant portion of the workforce (10-12%, or 1.5-2 million people at a time) worked abroad. On the one hand, remittances from migrants created a substantial influx of foreign currency into the country (e.g., USD 15 billion or 7.5% of GDP in 2021). On the other hand, many of them eventually became detached from their families and Ukraine. Between 2015 and 2019, the government made several steps to protect the rights of labour migrants: it allowed them to participate in the social insurance system and thus be eligible for pensions and restricted the activities of intermediaries providing employment services abroad to remove dishonest players from the market. At the same time, the government began simplifying the process for foreigners to obtain work permits and equalizing their rights with those of Ukrainian workers. These actions are necessary not only to bring Ukraine closer to the EU but also to reduce the labour shortage.

In 2017, the government approved criteria for granting state support for employee professional training — businesses could be reimbursed for up to 50% of such expenses from the state. Thus, enterprises were encouraged to retrain workers themselves rather than rely on state-provided training. 

Social support

At the beginning of 2015, the government took extraordinary measures to rectify the highly challenging budget situation. It limited the salaries of employees in public agencies and state-owned enterprises, canceled some privileges, including for many victims of the Chornobyl disaster, put on hold pension payments to employees of tax, customs, and regulatory agencies in 2015, and capped pensions for working pensioners (pensions for working scientists were reinstated in a few months). Additionally, income tax on pensions of working pensioners was introduced (this tax was later canceled for World War II veterans and individuals with pensions below UAH 11,000).

At the end of 2015, the government passed another law to reduce expenditures, which established a cap on pensions — 10 times the subsistence minimum for non-working individuals (a subsistence minimum is an amount established by state budget laws, it serves as a base for some social payments and wages of some categories of public employees. Different subsistence minimums are established for working, non-working individuals, and children), canceled the right to early retirement for education, healthcare, and social workers, and transferred the financing of several types of privileges to local budgets. Certain categories of citizens, such as former judges, continue to receive significantly higher pensions under special laws. 

On the other hand, to offset the significant (sometimes tenfold) increase in energy tariffs, the government introduced subsidies that households could obtain very easily. These measures helped prevent social unrest (despite some politicians’ rhetoric of a “tariff genocide”). At the same time, overall spending on energy subsidies significantly declined, since low tariffs effectively subsidized all the households, including the richest ones.

At first, subsidies were paid directly to energy producing or heating companies, covering the difference between the cost of these services and the bills which households paid. This of course did not encourage energy savings: energy suppliers had incentives to overstate consumption volumes while households did not have incentives to save energy. Therefore, the government gradually reduced the “normative” energy consumption levels used to calculate subsidies and narrowed the eligibility criteria for households (e.g., by excluding those who own large houses or apartments, expensive cars, or work unofficially). As a result, between 2017 and 2019, the number of subsidy recipients and corresponding expenses was nearly halved. Later, energy subsidies and utility payment privileges were monetized so that people would have incentives to save energy and use the “leftover” subsidies as they like. In this case, monetization was a positive change. However, sometimes it can be inappropriate — for instance, the monetization of the “baby package” (a box with necessities for a baby provided to new mothers by the state). Due to public dissatisfaction, the packages were quickly reinstated, although the option to receive the equivalent amount of cash remains.

With reforms of other types of social protection, the government has been moving in two directions. On the one hand, it expanded the list of categories eligible for social support and the types of assistance available. On the other hand, it aimed to improve the tracking of social assistance recipients and reduce unproductive expenditures (e.g., the government stopped reimbursing local budgets for free public transportation of certain categories of people).

With the onset of the Russo-Ukrainian war, two new major categories of people in need of support emerged — internally displaced persons (IDPs) and military service members, veterans, and their families. After the full-scale invasion, the number of IDPs increased from approximately 1.5 million in 2021 to 4.9 million by early 2024. In 2024, there were 1.3 million veterans in Ukraine. After the war, the number of veterans and their family members is projected to grow to 5-6 million people, which is 12-15% of the population as of early 2022. Therefore, the transition to more effective forms of social support, rather than subsidies or payments, is essential.

In 2015, employers were required to preserve jobs and average salaries for service members, while a two-year reimbursement of the USC was introduced for employers hiring Anti-Terrorist Operation veterans. Military personnel were exempted from paying interest on individual housing construction loans in rural areas, and reservists injured during the ATO or families of those killed were granted the same pensions as regular army service members. Additionally, Parliament legalized volunteer activities and delegated to local governments more responsibility over the distribution of humanitarian aid.

Between 2015 and 2019, several measures were implemented to support children, including the state’s obligation to evacuate children from combat zones, the provision of housing for internally displaced orphans, and allowances for individuals (including parents) caring for children with disabilities. Furthermore, the government increased the number of child welfare service workers and allowed for the removal of children from unsafe family situations.

In 2016, the Cabinet of Ministers launched a pilot electronic registry for social benefit recipients (previous attempts to create such a system were ongoing for nearly a decade, with millions of donor dollars spent. However, the system was never fully implemented due to a lack of political will and administrative capacity). Additionally, the government introduced a system to register internally displaced persons and ensure that benefits were provided only to those who relocated to government-controlled areas. Later, a Unified Database of IDPs was created. 

In 2017, the government approved regulations on citizen verification in the Unified Demographic Register, obtaining data from the register, and other types of interactions with it. The register was created in 2012 and theoretically is supposed to contain information on all Ukrainian citizens. It is being filled in gradually, with data added as citizens obtain documents from the state, such as international passports and ID cards. As of 2023, the register contained records of 23 million people. 

In 2019, the government introduced electronic sick leave certificates to improve the tracking of funds spent from the Social Insurance Fund, which finances sick leaves.

Pension reform

Due to the low birth rate, Ukraine’s population is aging — the number of working-age people is decreasing while the share of retirees is increasing. For nearly a decade, one worker has supported approximately one pensioner (Figure 12.5). As the number of active workers declines, and because some employees evade paying the USC, the Pension Fund’s own revenues are shrinking. Since 2005, state budget transfers to the Pension Fund have accounted for about one third of its revenues. Therefore, in the long run, the current pay-as-you-go pension system will not be able to ensure adequate payments to retirees.

As early as 2004, Parliament adopted a pension reform introducing a three-pillar pension system consisting of the (1) pay-as-you-go (solidarity) system, (2) mandatorily funded (accumulative) system, and (3) voluntarily funded system. Since then, several dozen private pension funds (the third pillar) have emerged, but the second pillar has yet to be implemented. Several challenges have hindered its launch.

First, there is a lack of funds to finance the Pension Fund during the transition period when part of the USC revenues would be redirected from the solidarity system to individual accounts (the alternative would be a significant increase in the USC rate). Second, persistently rather high inflation would erode pension savings over time. Third, the underdevelopment of the stock market in Ukraine and the resulting lack of financial instruments (other than government bonds) for long-term investments pose a significant problem. Of course, the third challenge can be seen as a “chicken and egg” problem — demand for long-term investments could stimulate the development of relevant financial instruments. However, fundamental conditions such as a trusted judicial system and property rights protection are necessary for the stock market growth. These conditions are still lacking in Ukraine, and overall institutional trust remains low. Moreover, when pension reform was considered in 2017, the government and Parliament failed to agree on a management model for mandatory savings (e.g. a one centralized fund or a number of funds, restrictions on investment assets etc.). While they are still willing to introduce the second pillar, it remains unclear how it will actually function. 

Since pensioners make up about a third of the population and actively participate in elections, politicians always have the incentive to introduce “pre-election” pension increases for all retirees or for some categories of pensioners. Clearly, such “gifts” negatively impact the financial sustainability of the Pension Fund.

Another long standing “taboo” for Ukrainian authorities has been raising the retirement age. It was only in 2011 that the retirement age for women began to gradually increase from 55 to 60 years (retirement age for men is 60 years). In 2016, the Cabinet of Ministers significantly reduced the list of professions eligible for early retirement, notably removing managerial positions from the list. Also, individual entrepreneurs were allowed to include their years on the simplified taxation system into their tenure, even in the absence of an official employment record book. This change enabled self-employed people to qualify for a tenure-based pension. 

A fairly comprehensive pension reform was introduced in 2017. However, even then the authorities formally refrained from raising the retirement age. Instead, they established a minimum number of working years required to qualify for a tenure-based pension (those who worked less receive a social pension instead). The same law canceled privileged pensions for civil servants, MPs, judges, prosecutors, and scientists. Later, these benefits were reinstated for civil servants and scientists. At the same time, the judicial reform introduced high salaries and pensions for judges as a necessary (though not sufficient) condition to ensure their integrity and independence.

The formula for calculating pensions was revised too. In addition to an individual’s salary and tenure, the formula now includes the national average wage. Under this system, an increase in the average wage automatically leads to pension recalculations. This change was aimed at reducing the gap payment between long-time retirees and those who have recently retired. However, due to the complex demographic situation and the shadow labour market, most pensions still do not provide a decent standard of living (Figure 12.6). 

Reforms in 2019-2024

Labour Market Policies

During this period, legislative changes in the labour market followed three main avenues: the incorporation of new forms of employment into legislation (such as remote work, flexible working hours, and freelancing), encouraged by the pandemic; alignment of the Ukrainian labour market with European standards; and strengthening employee rights protection.

Freelancers were granted social and labour guarantees, including the ability to sign contracts with employers specifying core working hours and days, minimum and maximum working hours, and guaranteed lower and upper wage limits. They were also given the freedom to sign contracts with multiple employers, the right to sick leave and vacation, the right to request a standard employment contract, and, notably, the ability to count their freelance work towards official employment tenure. 

In the field of employee rights protection, the government introduced an electronic employment record system, followed by a risk-based approach to workplace inspections. Parliament prohibited discrimination on the job and during the recruitment process, as well as workplace mobbing, granting affected employees the ability to defend their rights in court.

To align with EU standards, the government harmonized the national qualifications framework with the European one and developed a procedure for recognizing qualifications obtained in the EU. The National Qualifications Agency is responsible for this process. Accredited qualification centers, which can be established by vocational education institutions, the State Employment Service, and enterprises, will verify the outcomes of informal (self-directed) and non-formal (course-based) learning. Additionally, employers were granted the right to assign qualification grades to employees in accordance with professional standards developed by employers, government agencies, scientific institutions, civil society organizations, etc. 

To align with the EU single market, the government simplified employment procedures for foreign workers by lifting the requirement for foreign specialists to be paid a minimum salary of 50 times the minimum wage. At the same time, the price of work permits for foreigners was increased from 2-6 to 3-10 times the subsistence minimum, depending on the permit duration. The funds collected for permits will be used to pay unemployment benefits to Ukrainian citizens. Work permits for international students studying in Ukraine will be free. The immigration process for highly qualified foreign professionals was simplified too.

During the full-scale invasion, unemployment increased significantly as many businesses were forced to shut down or scale back their operations, at least temporarily. To promote employment, especially among youth, the government introduced such measures as offering employers up to 12 months of USC reimbursement for hiring young workers or those who had been unemployed for a long time. Unemployed individuals were given the opportunity to obtain vouchers for training at educational institutions of their choice, with eligibility extended to military members, the wounded, and people with disabilities. Furthermore, the government canceled employment quotas for certain categories, such as people with disabilities, as businesses often preferred to pay fines rather than comply with quota requirements. Instead, employers can now receive compensation for making workplaces accessible to employees with disabilities (1,300 employers benefited from this support during the first 10 months of 2024). Some categories of unemployed people will receive comprehensive social services, including employment assistance as a part of their support. 

In mid-2022, the government allowed businesses to fire employees if the enterprise was unable to continue operations or if no contact with the employee had been established for four months (in early 2025, nearly 63 thousand people were registered as missing in Ukraine).

To enhance the economic integration of internally displaced persons, the government introduced a support program for businesses that hire IDPs. Under this program, employers receive payments of UAH 8,000 (equal to the minimum wage) per employed IDP for three months, and for IDPs with disabilities the payments extend to six months. According to the Ministry of Economy, during the first 10 months of 2024, the state disbursed UAH 270 million under this program for the employment of 13,400 internally displaced persons. In 2023, payments for the same number of employed IDPs amounted to UAH 181 million because the payment amount was lower — UAH 7,100 per employee. 

As seen in Figures 12.7 and 12.8, despite the high unemployment rate, the number of applicants per job vacancy has significantly decreased. Indeed, companies are increasingly reporting difficulties in finding personnel. The reasons for this include migration, mobilization, and the growing issue of structural unemployment, whereas the skills of potential employees do not match those required by employers. Another contributing factor is the reluctance of some men to take official jobs to avoid mobilization. These factors, along with the reduction in the duration and amount of unemployment benefits, explains the decline in the number of registered unemployed (Table 12.1, last row). Table 12.1 shows that the number of education vouchers issued over the past two years has increased significantly, which is an effective tool for addressing structural unemployment.

Supporting businesses during wartime

To support businesses located in active combat zones, the government launched a relocation program that provided assistance to entrepreneurs in moving their enterprises and equipment to relatively safer regions. The Ministry of Economy helped businesses find suitable locations for their production facilities, facilitated the resettlement of employees, and assisted in recruiting new staff. Of the total number of relocated enterprises, 11% moved abroad, while 73% continue to operate in Ukraine.

Another key measure to support war-affected businesses was expanding the “5-7-9%” subsidized loan program. Under this program, companies that lost their production facilities due to the war can receive loans of up to UAH 60 million at a 9% interest rate for a period of five years. Initially launched in 2020 to support small businesses’ investments in new capacities or technologies, the program was expanded during the full-scale invasion to include almost all types of enterprises. As a result, the program lost its original focus and became too costly for the state. The current program with the IMF foresees returning the “5-7-9%” program to its original parameters. 

In addition, the government provides entrepreneurs with grants under the “eWork” program. Currently, Ukrainians can receive financial assistance for business development through six grant programs.

Over the past two years, a notable trend has been the influx of women into traditionally male-dominated professions. Women are undergoing vocational training and starting careers, for example, as long-haul truck drivers or metro train operators. Moreover, the state implements programs to support female entrepreneurship by providing grants to help women start and grow their own businesses (these programs primarily rely on donor funding). 

Social support 

In the social support sphere, the primary avenue for ongoing reforms is the transition from a chaotic system of various benefits and payments to the provision of comprehensive social assistance to households to help them move out of the vulnerable category. Once the reform is completed, a social worker assigned to each household will provide tailored assistance based on their specific needs, such as document issues, employment, training, etc.

To implement this system, the government is taking two key steps: first, digitizing administration of social support, and second, expanding the range of entities authorized to provide social services. 

Thus, in December 2019, Parliament passed a framework law on verifying social benefits. It defined the authorities responsible for verification, distributed responsibilities among government bodies, and established procedures for electronic data exchange between them. At the same time, the government created the State Social Service (now the National Social Service of Ukraine), tasked with coordinating all social service providers and ensuring they deliver services according to established standards.

In October 2023, the government launched the Unified Information System for the Social Sphere (UISSS), facilitating coordination between government agencies and social service providers. In the fall of 2024, the Ministry of Social Policy social portal became operational. The portal provides information on available social services and allows users to submit applications for social assistance or report individuals or families in need. Local social support offices will review these applications, and citizens will be able to track the status of their requests through their electronic accounts. 

Today, IDPs can receive assistance through the UISSS at their current place of residence. Besides, the UISSS provides a comprehensive range of services for prospective adoptive parents, including initial consultations and candidate registration. In January 2022, the government introduced an electronic veteran’s ID, which is equivalent to the paper version (now it is the main document confirming veteran status). Starting in 2025, an active military member status will also be provided through the electronic system.

At the beginning of 2020, the government expanded the list of social service providers beyond budgetary institutions to include individuals, legal entities, and self-employed. These providers must meet the required professional qualifications and comply with service delivery standards. Over the past four years, the government has developed a payment framework for social services, allowing the state or local authorities to procure services from providers offering the best conditions. Individuals who provide social care on a non-professional basis (such as family caregivers) are also eligible to receive state compensation for their services. If they verify their qualifications, their monthly compensation can increase to UAH 10,000. 

The government has taken several steps to improve access to social services. These include allowing the provision of social services through Administrative Service Centers, enabling online residence registration so that relocated people could access social and administrative services where they currently live, and introducing remote identification for residents of temporarily occupied territories to receive pensions and social benefits. Furthermore, homeless individuals were given the opportunity to register their place of residence at social institutions to facilitate their access to public services.

During 2023-2024, the government launched several pilot projects to provide customized social services. These include social adaptation services for individuals staying in shelters, the “Family Assistant” program for families facing challenging circumstances, support services for members of the military and their families, and psychological assistance for those in need. In 2023, the government also made it possible for individuals injured in the workplace to receive social services funded by the state. 

In July 2021, the government established the Ukrainian Veterans Foundation, which helps veterans find additional education and employment and provides other support, including grants for starting their own businesses. In early February 2022, veteran sports were officially recognized as a new branch of sports.

With the onset of the full-scale war, the government naturally has focused more on supporting wounded military, families of fallen soldiers, and the reintegration of veterans. Families of fallen military personnel receive a lump-sum payment of UAH 15 million, while families of deceased volunteers receive 500 times the subsistence minimum (equivalent to UAH 1.46 million in 2024). Volunteers who have acquired disabilities due to their service are entitled to compensation ranging from 150 to 250 times the subsistence minimum.

Gradually, in response to appeals from military personnel, the government adjusted payments to those who implement combat missions, to wounded soldiers, and those missing in action or taken captive. The latter have been granted the right to compensation, as well as medical, rehabilitation, and other assistance from the state, conditional on a decision by the commission responsible for determining cases of deprivation of personal freedom. Additionally, the government resolved the issue of recognition of combatant status for civilian volunteers and granted veterans the right to social and professional adaptation services to facilitate their transition back to civilian life. 

Foreign citizens who fight forUkraine are eligible for Ukrainian citizenship, with the possibility of postponing the language and Constitution exams for up to two years after the end of martial law.

To address the realities of war, particularly in locating abducted or missing persons, the government established a registry of deported persons, including children. Additionally, the criteria for recognizing a child as deprived of parental care were expanded — children can now receive this status if their parents are in captivity or missing, and they will lose this status if their parents return. 

To more effectively search for missing military personnel and to improve the investigation of crimes, the parliament adopted the law “On the State Registration of Human Genomic Information” (such information will be stored in a closed registry owned by the Ministry of Internal Affairs. Individuals will be able to voluntarily add their information to the registry, while the information of those connected to crimes will be mandatory).

Recently Parliament decided to create registries of deported children as well as of damage (including moral damage) done to Ukrainians because of the war.

Since the beginning of the full-scale war, the government has implemented support programs for individuals who lost their income or property due to the war. In spring-2022, this assistance was provided indiscriminately under the eSupport program implemented instead of the previously planned UAH 1,000 incentive for COVID-19 vaccination: the government offered UAH 6,500 to employees and entrepreneurs in regions affected by active hostilities. By the end of the program in July 2022, nearly 5 million people had received assistance, totaling UAH 31 billion. However, a later audit revealed that more than 25,000 individuals received fraudulent payments, as they were employees of budget-funded institutions. 

The government has simplified the process of receiving social assistance. Initially, unemployed individuals and IDPs were given the opportunity to register via the Diia app. Later, the eAssistance program was launched — a digital platform that allows those in need to receive assistance from international organizations such as the Red Cross, UNDP, and UNICEF. As of December 2024, over 10 million applications had been submitted through the eAssistance system, prompting the government to temporarily suspend the acceptance of new applications.

To promote gender equality, the government introduced policies allowing fathers and other relatives to take parental leave on equal terms with mothers (previously mothers were able only to “transfer” their leave to fathers or other relatives). 

The state and local authorities provide housing for IDPs who are unable to purchase or rent housing. Priority categories for housing support include families of military personnel engaged in combat, IDPs who have been displaced for the second time since 2014, those whose homes have become uninhabitable due to Russian aggression, and individuals who are already residents of the community providing the housing.

Additionally, IDPs can receive financial assistance from the government to cover their living expenses. According to the Ministry of Social Policy, in 2022, financial aid for housing was provided to 2.3 million IDPs, amounting to UAH 52.8 billion, while in 2023, the number increased to 2.5 million people, with total payments reaching UAH 73.3 billion. To reduce state expenditures, from 2023, the government gradually introduces restrictions on eligibility for assistance. Individuals who have made large purchases (such as an apartment or a car), hold significant amounts in bank deposits, do not work or register with the employment service, or have spent an extended period abroad are no longer eligible for payments. 

In August 2022, the government launched the eOselya subsidized mortgages program. Eligible applicants include war veterans, their family members, active service members, individuals with disabilities resulting from the war, and families of fallen soldiers. Nearly all mortgage loans issued during the full-scale invasion have been through this subsidized program. From the program’s inception until the end of November 2024, 4,500 loans were issued, totaling UAH 24.3 billion.

Since 2023, the government has implemented the eRecovery program, which provides financial assistance to repair damaged housing or offers certificates to purchase new housing to replace destroyed homes. As of late September 2024, nearly 70 thousand people have benefited from the program. 

Since 2022, Ukraine has joined several international agreements aimed at improving the protection of human rights and civil protection for its citizens. Most notably, Ukraine ratified the Istanbul Convention, an effort that had been pending for 11 years. Under the convention, Ukraine is required to criminalize domestic, economic, psychological, and other forms of violence and strengthen protection mechanisms for victims of abuse.

Additionally, Ukraine aligned its legislation with the Geneva Convention on Civil Protection and became a full participant in the EU Civil Protection Mechanism. This membership allows Ukraine to collaborate with the EU for protection of civilians and disaster risk management, improving coordination and response during emergencies. The agreement will facilitate the mobilization of assistance to Ukraine within the EU Civil Protection Mechanism framework. Furthermore, the government introduced new civil protection regulations, requiring businesses to provide their employees and visitors, such as hospital patients and university students, with personal protective equipment. 

The government has placed greater emphasis on supporting people with disabilities. New reconstruction standards mandate accessibility, energy efficiency of buildings and existence of shelters there. However, the focus is not only on rebuilding physical infrastructure damaged during the war but also on ensuring that public services are accessible to individuals with hearing, vision, speech, or other impairments. In order to promote inclusivity, Ukraine joined the Marrakesh Treaty, which facilitates access to text for visually impaired individuals. Additionally, all goods purchased with public funds, which may be used by people with disabilities, including transport vehicles, must meet accessibility requirements. This measure will enhance the inclusivity of public transportation. 

In December 2023, the government launched the Diia.Accessibility portal, which provides information on state services, job opportunities, and social assistance to people with disabilities. The Diia.DigitalEducation platform is also accessible to people with disabilities.

To counteract potential abuses, at the end of 2023, the government introduced new rules for the import of humanitarian aid, requiring such aid to be registered in an electronic system. Later, Parliament simplified the process for bringing in humanitarian aid: besides registered charitable foundations or NGOs, foreign charitable organizations, non-profit state and municipal institutions, local authorities, and social service providers can now also import humanitarian aid. The same law allowed goods purchased by philanthropists abroad (and not just those received from donors free of charge) to be recognized as humanitarian aid. This simplified the process of bringing in essential goods.

The “prosecutors with disabilities” scandal catalyzed the reform of the Medical and Social Expert Commissions (MSECs), which determine the disability status and the associated benefits or payments which individuals are entitled to. In December 2024, Parliament passed a law to liquidate MSECs and adopt the International Classification of Functioning, Disability, and Health. This means that expert medical teams will assess an individual’s functional abilities and prescribe appropriate treatment or rehabilitation. The process will be managed by an electronic system. In many cases, direct interaction between doctors and patients will no longer be necessary, which will reduce opportunities for corruption.

At the end of 2024, the government, at the president’s initiative, launched the “Winter eSupport” program, more commonly known as “Zelenskyy’s Thousand” (an unconditional payment of UAH 1000 to people who live in Ukraine). As of December 11, 2024, 6.3 million citizens had applied for the program. However, this initiative is widely viewed as a populist measure and contradicts the broader trend towards targeted social support.

Pension system

There have been no significant changes in the pension system from 2019 to 2024, except for digitalization. In 2020, the Pension Fund introduced automatic pension assignment, and from 2021, the electronic employment records system is replacing paper-based records. This allows every employee to check their tenure record at any time and, eventually, calculate their pension automatically. 

In 2022, Parliament simplified the process for citizens to voluntarily join the pay-as-you-go system. Individuals can now voluntarily make additional USC payments for themselves or for their relatives, while businesses can contribute on behalf of their employees. These individuals will be eligible for higher pensions in the future.

In 2023, the Social Insurance Fund was merged with the Pension Fund to improve the efficiency of fund administration.

What next?

Ukraine’s already challenging demographic situation has significantly worsened after the full-scale invasion due to the death and injury of a large number of people, emigration (primarily of working-age individuals) and millions under occupation. This has further exacerbated labour market imbalances, thus today high unemployment coexists with a labour shortage.

Today, the number of families and individuals in need of social assistance in Ukraine has grown substantially. These include those who have lost their homes and/or sources of income, families of fallen and captured soldiers, internally displaced persons, veterans, and others. At the same time, available resources for social support have shrunk, with most funding now coming from international partners. As a result, there is an urgent need to significantly enhance the efficiency of social assistance — an issue that has been discussed for many years.

The government has started taking steps in this direction. For it to stay on course, the Ukraine Facility program has a set of conditions that must be met to receive financial support from the EU. In the social protection sphere, besides the transition to a comprehensive household social support model, the key conditions include:

• facilitating the integration of veterans into civilian life;
• establishing a centralized system that contains information about people with disabilities and automatically offers them appropriate support;
• promoting the deinstitutionalization of children, elderly citizens, and individuals with disabilities;
• reducing discrimination and violence.

To address labour market challenges, it will be necessary to increase labour force participation, which, even before the full-scale invasion, in Ukraine was lower than in EU countries. Achieving this goal will require not only comprehensive training programs and revision of labour legislation but also development of childcare infrastructure to encourage greater labour force participation of women. It is also crucial to adapt public spaces and workplaces to ensure that people with disabilities and elderly individuals can move freely within cities and villages and participate in the workforce.

Additionally, Ukraine will need to:

• ensure equal labour market rights for Ukrainian citizens and foreign nationals and take steps to join the EURES system, which supports the EU single labour market;
• adopt a new modern law on vocational education and training;
• continue implementing the higher education development strategy, including introducing the “money follows the student” funding model and consolidating educational institutions;
• invest in the development of science and innovation by introducing competitive elements in project funding.

Today, the return of Ukrainian refugees is a major concern for both society and the government. According to surveys, many refugees plan to return after the war. However, it is unlikely that Ukraine’s demographic challenges can be addressed without attracting migrants. Once reconstruction begins, Ukraine may experience an influx of migrants from poorer countries, e.g. from Asia or Africa, and the government must be prepared for their integration. Integration programs should address the learning of Ukrainian language and laws, labour market inclusion, and mingling migrants with the local population to prevent the formation of ghettos. The development of such policies should start now, drawing on both positive and negative experiences of EU countries.