Can Employment in Hungary Be Counted Towards a Pension in Ukraine?
Pension entitlement remains an important issue for many people. Under Ukrainian legislation, entitlement to an old-age pension generally depends on reaching the statutory retirement age and having the required insurance record. To confirm entitlement, a future pensioner must provide the Pension Fund of Ukraine with the necessary supporting documents.
The situation becomes more complicated where a person has worked in several countries. Ukraine and Hungary have long-standing historical, economic and social ties, and many people have worked, studied or lived in both countries. Consequently, the question of whether periods of employment accumulated in Hungary can be taken into account when applying for a pension in Ukraine is particularly important.
Recognition of periods of employment or insurance accumulated abroad for Ukrainian pension purposes depends on Ukrainian legislation and the applicable international social security framework. Therefore, when applying for a pension in Ukraine, it is necessary to determine whether the relevant international arrangements between Ukraine and Hungary provide for the recognition or aggregation of insurance periods accumulated in the two countries.
International social security arrangements are particularly important for people whose working careers were divided between different countries. Depending on the applicable rules, periods of employment completed abroad may affect whether a person has accumulated sufficient insurance record to qualify for a pension, while each country may remain responsible for pension rights acquired under its own legislation.
A separate issue concerns the taxation of pension income. Ukraine and Hungary have concluded a Convention for the Avoidance of Double Taxation. The Convention contains provisions governing the taxation of pensions and other similar remuneration connected with past employment. The applicable taxation rules depend on the nature of the pension, its source and the recipient’s tax status.
Special rules apply to pensions received in connection with government service. Depending on the circumstances, the right to tax such a pension may belong to the state in connection with whose government service the pension is paid or to the other contracting state, taking into account factors such as the pensioner’s residence and nationality.
It is therefore important to distinguish between recognition of foreign insurance periods and taxation of pension income. A double taxation convention regulates tax matters but does not, by itself, determine whether employment periods accumulated in Hungary can be included in the insurance record required for a Ukrainian pension.
Accordingly, persons who have worked in both Ukraine and Hungary should retain documents confirming their employment and insurance periods in each country. When applying for a pension, the international social security rules and national legislation applicable at that time should be examined to determine how the relevant foreign periods affect pension entitlement and which state is responsible for the corresponding pension payments.
