Bonuses for service members restored

14 April 2023
Bonuses for service members restored
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Draft bill #8312 of December 27, 2022 

Status: passed as a law, awaits to be signed by the President 

Who is affected: service members, the Ministry of Defense, the Cabinet, MPs, employees of the NABU, SBI, Specialized Anti-Corruption Prosecutor’s Office, prosecutors, judges, and members of state regulators. 

Summary of the bill: 

  • by the Cabinet’s decision, the Ministry of Defense will manage corporate rights forcibly alienated under martial law. The National Bank will manage the shares of banks and shares, including shares in the authorized capital, of non-bank financial institutions 
  • how legislation on joint-stock companies and other acts related to corporate rights forcibly alienated under martial law is applied will be determined by the National Securities and Stock Market Commission 
  • shares and shares in the authorized capital of legal entities forcibly alienated under martial law will have the status of military property 
  • monthly bonuses for service members, except for cadets of higher military educational establishments, in the amount of ₴30,000 and ₴100,000, will be restored 
  • an upper limit of 10 minimum wages (₴67,000) will be introduced for the remuneration of civil servants, officials, and employees of budgetary institutions from April 2023 until martial law ends. This will apply, in particular, to MPs, members of the Cabinet, prosecutors, employees of the National Bank, detectives of the NABU, investigators of the SBI, members of the National Commission for State Regulation of Energy and Public Utilities, and other state regulators. 

What is wrong: 

  • it is unclear why should the Ministry of Defense have the authority to manage confiscated corporate rights. The Agency for Investigation and Management of Assets and the State Property Fund are the two bodies that are supposed to manage such property 
  • the bill restores bonuses for service members only in theory, as it does not propose changes to the government budget. Moreover, funds that can be obtained by cutting the remuneration of service members and officials will not cover the amount needed for the restoration of bonuses. According to calculations of MP Yaroslav Zhelezniak, the savings from such cuts will cover only 2% of the actual need. 

Alternative solution: 

  • designate the State Property Fund as the government body responsible for managing corporate rights confiscated under martial law 
  • review the financial justification and confirm that the government budget will have enough money to fulfill the obligations the state assumes regarding the bonuses for service members. Despite the undeniable need to provide proper remuneration to service members, it will be impossible to implement the bill if there is not enough money. 

Additional information: MPs have already submitted a resolution to recall their votes for the bill. No legal action will be taken until the Parliament votes in favor or against this resolution.