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Mechanism of subsidies in Ukraine. What Is It?

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CASE Ukraine`s Director Dmytro Boyarchuk commented to the ‘From-UA’ media outlet on the moment when the subsidies end in the country.

According to the expert, in Ukraine, the mechanism of subsidies functions as a last stand protecting people from the problems, that is, the mechanism of individual subsidies.

It works in such a way that if the economic situation worsens because of devaluation or some shocking rises in energy prices, so that people can pay for housing and communal services. In fact, other taxpayers compensate these expenses.

However, this mechanism works in such a way that over time, when incomes grow, these subsidy recipients gradually leave the program. That is the principle.

For example, such grants abroad are provided under more conditions that are stringent. Let us take Great Britain into account. In this country, there are social inspectors who have a very broad authority. They can even carry out an investigation if a person conceals income.

In our country, because of the critical attitude of the population towards controlling their incomes, social inspectors are always objects of strengthening their authority, but not all of these actions are perceived. Therefore, abroad, especially in developed countries, one controls these things very much, and if a person received help during a certain period and it was illegal, then it is punishable by law – he or she will be forced to refund money.

In Ukraine, people also forced to refund money return, but the process is not rigidly controlled so far. It is in a ‘shadow’ because the majority of our people’s income is not visible. If a person does not earn officially, but with some unofficial incomes, he or she will still have the opportunity to receive a subsidy. In the Western countries, if you have a discrepancy between what you declared in income and what the inspector observes, the attitude will be completely different. This is not something that is the reason for subsidies cancellation, but the case will lead to an investigation where the extra funds are.

December 5, 2017