Pension Rights Between Ukraine and Serbia
Ukrainians increasingly move abroad for work or permanent residence. In some cases, they are later joined by their relatives or elderly parents. This raises important questions concerning pension entitlement, recognition of foreign insurance periods and the payment of Ukrainian pensions to people living abroad.
Recognition of employment and insurance periods accumulated in Serbia for Ukrainian pension purposes depends on the international social security framework applicable between Ukraine and Serbia. The international agreements and national legislation in force at the time of the pension application should therefore be examined to determine whether and under what conditions Serbian insurance periods may be taken into account in Ukraine and Ukrainian insurance periods may be recognised in Serbia.
If a person has already been granted a Ukrainian pension and subsequently moves to Serbia, a separate question arises as to whether residence abroad affects the right to continue receiving that pension and how the pension income will be taxed.
Taxation of pension income is governed separately from the recognition of insurance periods. The international tax framework applicable between Ukraine and Serbia contains rules intended to prevent double taxation. The applicable tax treatment depends on the type and source of the pension, the pensioner’s tax residence and the specific provisions applicable to the payment.
Separate rules may 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 state, taking into account factors including the recipient’s residence and nationality.
Another important issue concerns the payment of an already granted Ukrainian pension to a person residing permanently in Serbia. In its Decision No. 25-rp/2009 of 7 October 2009, the Constitutional Court of Ukraine addressed the issue of pension payments to Ukrainian pensioners residing abroad.
The Constitutional Court declared unconstitutional 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 Court’s position confirmed that the exercise of an acquired pension right cannot be made conditional solely on whether Ukraine has concluded such an agreement with the pensioner’s country of residence.
Accordingly, permanent residence in Serbia should not, by itself, deprive a person of the right to receive an already granted Ukrainian pension. The absence of a bilateral pension or social security agreement cannot automatically serve as grounds for terminating pension payments solely because the pensioner lives outside Ukraine.
It is important to distinguish between the recognition of Serbian insurance periods when determining entitlement to a Ukrainian pension, the taxation of pension income and the right to receive an already granted Ukrainian pension while residing in Serbia. These are separate legal issues and may be governed by different provisions of national and international law.
Ukrainians who have worked in Serbia should therefore retain documents confirming their employment, earnings and participation in the Serbian social insurance system. When applying for a pension or arranging pension payments while residing abroad, the legislation and international arrangements applicable at that time should be examined to determine how the person’s Ukrainian and Serbian pension rights are affected.
