Can an Heir Recover Unpaid Social Insurance Benefits in Ukraine?

A client contacted our law firm regarding the recovery of social insurance benefits that had neither been accrued nor paid following the death of his mother.

The particular difficulty in this case was that the deceased had lived in a temporarily occupied territory where the Social Insurance Fund was not exercising its functions. According to the Fund, the fact that the woman had not moved to government-controlled territory and had not registered with the relevant authorities justified the suspension of the accrual and payment of her social insurance benefits.

The situation became even more complicated after the recipient of the insurance payments died. Because the Fund had stopped accruing the monthly payments during her lifetime, her son faced difficulties in inheriting the unpaid amounts.

Our law firm challenged the decision to discontinue the accrual and payment of the social insurance benefits before the court. We asked the court to order the Social Insurance Fund to calculate the amounts that had been due to the deceased and pay them to her heir.

Our principal argument was that the legislation did not provide for the grounds relied upon by the Social Insurance Fund to discontinue the payments.

In particular, the legislation did not provide that a person automatically lost entitlement to monthly insurance payments or accumulated arrears merely because they had not applied to a Social Insurance Fund office located in government-controlled territory.

Similarly, the fact that the relevant Fund office had ceased operating in the temporarily occupied territory and that the recipient had not relocated to an area where Ukrainian public authorities exercised their powers in full could not, by itself, extinguish the person’s substantive right to social insurance payments.

We argued that the failure to accrue the monthly insurance payments violated the deceased woman’s rights guaranteed by the Constitution of Ukraine and the principles developed in the case-law of the European Court of Human Rights. As a consequence, the rights of her son as heir were also affected.

The deceased was not responsible for the failure to accrue the payments. Because of circumstances beyond her control, she had remained without the social protection to which she was entitled, while the Social Insurance Fund had stopped accruing the relevant benefits on grounds that were not expressly provided for by law.

We also argued that making the receipt of social insurance benefits dependent solely on the recipient’s place of residence resulted in unjustified differential treatment and could not serve as a lawful basis for depriving the deceased of the payments due to her.

The court upheld our claim.

The defendant was ordered to calculate the social insurance payments that had been due to the deceased and pay the relevant amounts to the claimant as her heir.

The Social Insurance Fund lodged an appeal against the judgment. Our lawyers prepared and submitted detailed objections to the appeal, and counsel presented the client’s position before the appellate court.

As a result, the appeal was dismissed and the judgment in favour of the heir remained in force.

Importantly, the judgment was enforced in full within three weeks after it became final, and the heir received the social insurance payments that had been due to his deceased mother.

This case demonstrates that the death of a recipient does not necessarily extinguish their entitlement to social insurance payments that should have been accrued during their lifetime. Where the failure to accrue or pay benefits was caused by an unlawful decision of a public authority, an heir may have grounds to seek recognition and recovery of the relevant amounts.

The fact that the deceased lived in a temporarily occupied territory or had not relocated to government-controlled territory should not, by itself, be treated as sufficient grounds for depriving them — and subsequently their heirs — of property rights to payments guaranteed by law.

Please note: the institutional system of compulsory state social insurance in Ukraine has subsequently been reorganised. Therefore, current claims concerning unpaid social insurance benefits should be assessed under the legislation and institutional framework in force at the relevant time.

The court judgments in this case are available in the Unified State Register of Court Decisions:

1. Court of first instance: http://reyestr.court.gov.ua/Review/88945536

2. Court of appeal: http://reyestr.court.gov.ua/Review/90873719