Law on optimization of social expenses published

The law on optimization of social expenses passed on December 24, 2015 by Ukraine's parliament in the package with the bill on the national budget and amendments to the Tax Code of Ukraine and signed by Ukrainian President Petro Poroshenko was published in the Uriadovy Kurier newspaper on the same day.

According to the document, the law on indexation of cash public income was amended and public income is indexed if the consumer price index exceeds the indexation threshold of 103% (earlier it was 101%).

Amendments were made to some laws, according to which the largest pension in 2016 (apart from payments from the Pension Savings Fund) is restricted to UAH 10,740.

The law on pension benefits was also amended, and teachers have the right to retire in connection with long service benefit only if their age reaches only 55 years (now irrespective of the age), but the gradual transfer to the requirement is foreseen.

The published document contains a provision that prolongs the revoking of special pensions to parliamentarians, officials, prosecutors and judges for one more year.

According to the amendments to the law on preschool education, local self-government agencies will set the size of payment for children's meal paid by parents (today parents pay 60% in towns and 40% in rural areas). Beneficial meal will be provided to some categories of children under the decision of local self-government agencies.

According to amendments to the law on local self-government in Ukraine, local councils will provide for education in state-run and municipal institutions of general education and municipal higher education institutions.

The law on banks and banking operation was expanded with the provision that says that information on companies and individuals containing bank secret is disclosed by bank to the Finance Ministry to verify and check information submitted by individuals to receive social payments, subsidies and salaries. Banks will provide information on opened accounts, transactions and ending stocks on accounts.

The law took effect from January 1, 2016.

The parliament also established that from September 1, 2016 payment of education subventions to educational institutions (apart from elementary schools) with less than 25 students will be stopped.

According to the law, the cabinet by April 2016 is to expand the list of fee-paid services provided by public and municipal educational, science and culture institutions; set the economically justifiable fee for services provided by budget-funded organizations; revise the requirement for the number of libraries and clubs, taking into account the demographic situation; reduce the number of heads, administrators, managers, operating personnel and drivers by at least 10% and draw up bills on the reformation of the state order system for training specialists.

The document obliges local authorities to expand the sources of financing of cultural institutions via stimulation of off-budget financing, transfer some institutions to self-financing; reduce at least 10% of employees of institutions of general education (not taking into account teachers); reform the orphanage system, turning boarding schools into orphanages or institutions of general education; continue optimizing the network of educational institutions via the reduction of their number by at least 5% thanks to the consolidation of small schools; modernize the network of vocational schools and higher educational institutions of first and second accreditation tier.

Original