How Salary Before July 2000 Can Increase Your Pension in Ukraine
Everyone has the right to an adequate pension that provides a proper standard of living. The amount of a pension depends primarily on two components – a person’s insurance record and earnings. Unfortunately, many pensioners receive relatively low pensions despite having a substantial insurance record. In many cases, the reason is a low earnings coefficient, meaning that the person’s salary was relatively low compared with the average salary used for pension calculation purposes. However, Ukrainian pension legislation provides a mechanism that may allow certain pensioners to improve this coefficient and increase their pension.
As a general rule, earnings recorded in the personalised social insurance system for periods beginning on 1 July 2000 are taken into account when calculating a pension. However, earnings received before 1 July 2000 may also be relevant. Some people earned comparatively high salaries during earlier periods of their employment. In cases provided for by law, a pensioner may submit to the Pension Fund of Ukraine a salary certificate covering any 60 consecutive calendar months of insurance record before 1 July 2000. Taking these earnings into account may increase the individual earnings coefficient and, consequently, the amount of the pension.
In practice, when such documents are submitted, the Pension Fund may verify the accuracy and authenticity of the information contained in them. However, in some cases, the verification process may be accompanied by unlawful actions, procedural violations or unjustified delays on the part of the Pension Fund.
This was the situation faced by Mr Hulaha, who contacted our law firm for assistance. The Pension Fund did not recalculate his pension because it had sent his certificate confirming earnings received before July 2000 for additional verification. As a result, Mr Hulaha was unable to receive the pension amount to which he believed he was legally entitled.
Considering the Pension Fund’s actions unlawful, we decided to challenge them by submitting complaints and filing a claim with the administrative court. Our legal position was based on several grounds. First, the Pension Fund had not adopted the required decision extending the period for considering the pension recalculation application for the purpose of conducting additional verification. Under the applicable procedure, where additional verification of submitted documents is necessary, the Pension Fund must properly formalise the extension of the consideration period within the limits established by law. This had not been done.
Second, the Pension Fund failed to comply with the procedure for verifying the authenticity of the submitted documents. In particular, it began the verification process after it had already refused to recalculate the pension. Under the applicable rules, such verification should be conducted as part of the consideration of the pension recalculation application rather than after a refusal has already been issued.
Third, the Pension Fund failed to comply with the applicable time limits for verification. The legislation applicable to the dispute established specific deadlines for examining documents submitted in connection with an application for the granting or recalculation of a pension. In Mr Hulaha’s case, the verification continued substantially longer than the period prescribed by the applicable procedure.
As a result of numerous complaints, formal requests and the filing of an administrative claim, we were able to resolve the issue concerning verification of the salary certificate. Mr Hulaha’s pension was subsequently recalculated, increasing its amount by almost two times. He also received payment of the pension arrears that had accumulated as a result of the delayed recalculation.
