Can Employment in Israel Be Counted Towards a Pension in Ukraine?
At some point in life, every person begins preparing for retirement. This process usually involves collecting documents confirming periods of employment, insurance contributions and earnings. At the same time, an increasing number of Ukrainians work abroad. This raises an important question: will employment and insurance periods accumulated abroad be taken into account when applying for a pension in Ukraine, and can Ukrainian insurance periods be recognised when applying for a pension in another country?
The answer largely depends on the international social security arrangements applicable between Ukraine and the country concerned. Ukraine has concluded agreements with a number of states that regulate pension and social security matters and may provide mechanisms for recognising or aggregating insurance periods accumulated in different countries. Therefore, where a person has worked in Israel, it is necessary to determine which international and national rules apply to their particular circumstances.
Recognition of employment and insurance periods accumulated in Israel for Ukrainian pension purposes depends on the applicable international social security framework. In the absence of an agreement providing for the aggregation or mutual recognition of insurance periods, employment in Israel is not automatically included in the insurance record required for a Ukrainian pension. Likewise, Ukrainian insurance periods are not automatically taken into account for pension purposes in Israel solely on the basis of Ukrainian legislation.
A separate issue concerns the taxation of pension income. Ukraine and Israel have concluded a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital. As its title indicates, this Convention primarily regulates taxation and should not be confused with an international social security agreement governing the recognition of insurance periods.
The Convention contains provisions concerning pensions and other similar remuneration received in consideration of past employment. The applicable taxation rules depend on the type of pension, the recipient’s tax residence and other circumstances specified by the Convention.
The purpose of these provisions is to determine which state has the right to tax particular pension income and to prevent inappropriate double taxation. However, the existence of a double taxation convention does not, by itself, mean that periods of employment in Israel must be counted towards pension entitlement in Ukraine.
It is therefore important to distinguish between recognition of foreign insurance periods for pension purposes and taxation of pension income. These are separate legal matters governed by different rules.
Accordingly, Ukrainians who have worked in Israel and intend to apply for a pension in Ukraine should retain documents confirming their employment, earnings and participation in the Israeli social security system. If a person remains permanently resident in Israel, periods of employment and contributions accumulated there may be taken into account when determining entitlement to an Israeli pension or other social security benefits in accordance with Israeli legislation. The applicable Ukrainian legislation and international arrangements should be checked at the time of the pension application.
