Pension Rights Between Ukraine and Romania
As a result of globalisation, moving to another country has become increasingly common. People relocate for many reasons, including employment, better living conditions, family circumstances and other personal considerations. For Ukrainians who move to Romania, an important question is how employment abroad may affect their pension rights and whether they can continue receiving a Ukrainian pension while residing in another country.
Pension relations between Ukraine and Romania are governed by international arrangements in the field of social security. These arrangements may allow insurance periods accumulated in one country to be taken into account when determining pension entitlement in the other country, subject to the applicable rules and confirmation of the relevant periods by the competent authorities.
Accordingly, a person who has worked in both Ukraine and Romania should not consider the two periods of insurance in isolation. Depending on the applicable international rules, Ukrainian and Romanian insurance periods may be taken into account when determining whether the person satisfies the requirements for pension entitlement. Each country generally determines and pays the relevant pension benefit in accordance with the rules applicable to it.
A separate issue arises where a person has already been granted a Ukrainian pension and subsequently moves to Romania. In this situation, it is important to distinguish between the right to receive the pension, the procedure for receiving pension payments abroad and the taxation of pension income.
Ukraine and Romania have concluded an international agreement for the avoidance of double taxation. Its provisions determine which state has the right to tax pensions and other similar remuneration. The applicable tax treatment may depend on the nature and source of the pension, the pensioner’s tax residence and the specific category of payment.
Separate rules apply to remuneration and pensions connected with government service. Depending on the circumstances, such payments may be taxable in the state in connection with whose government service they are made or in the other contracting state, taking into account factors including the recipient’s residence and nationality.
The payment of an already granted Ukrainian pension to a person residing abroad is a separate matter. In its Decision No. 25-rp/2009 of 7 October 2009, the Constitutional Court of Ukraine considered provisions that made pension payments to persons permanently residing abroad dependent on the existence of an international pension agreement between Ukraine and the relevant country.
The Constitutional Court declared such restrictions unconstitutional. Accordingly, the exercise of an acquired pension right cannot be made conditional solely on whether Ukraine has concluded a pension agreement with the pensioner’s country of residence. Permanent residence in Romania should therefore not, by itself, deprive a person of the right to receive an already granted Ukrainian pension.
It is important to distinguish between the recognition of Romanian insurance periods when determining entitlement to a Ukrainian pension, the calculation and payment of pension benefits under the applicable international social security rules, the taxation of pension income and the right to receive an already granted Ukrainian pension while residing in Romania.
Ukrainians who have worked in Romania should retain documents confirming their employment, earnings and participation in the Romanian social insurance system. When applying for a pension, it is advisable to verify the international rules applicable at that time and, where necessary, obtain official confirmation of Romanian insurance periods from the competent authorities.
