More than 20 years ago, the era of travel from Ukraine to Europe began. A decent amount of time to earn a decent pension. Is it possible to formalize it, how much Europeans are willing to pay, and can we seriously count on material support in old age from the EU?
Of course, the main thing in this situation is official employment and the absence of problems with tax services. Vasily Voskoboynik, head of the All-Ukrainian Association of International Employment Companies, says:
10 years of experience in Poland allows you to receive twice as much pension as 28 years in Ukraine. The mass labor of Ukrainians in Europe is about 20 years old. This means that our citizens can already apply for pensions in many European countries. Let’s say, in the same Poland, where in order to receive a pension payment, 10 years of work experience is enough (of course, subject to official employment and paying taxes).
And Rostislav Kravets, head of the law firm Kravets & Partners, says that many Ukrainians have already applied for pensions abroad and explains:
In many countries, where our workers traditionally go, the conditions for receiving the minimum pensions are generally loyal. In particular, in terms of work experience – 10-15 years is enough.
At the same time, everyone is well aware that even the minimum pensions abroad are much more attractive than those earned at home. For comparison: the minimum pension in Ukraine is 1,769 hryvnia, on average, citizens who have retired on a well-deserved rest receive about 3,000 hryvnia. In Germany, the minimum payments are 400 euros, that is, 12,000 hryvnia is for foreign pensioners. In Poland – 850 zlotys, or 6,000 hryvnia. And this is only the minimum, because the amount depends on the length of service, salary, etc. How to get an overseas pension? The situation is explained by lawyer Vitaly Dudin, head of the social organization “Social Rukh”, citing as an example possible options.
Ukrainians working abroad can be assigned a pension in the country where the conditions for receiving it are met. It is possible to apply for a pension in two countries at once, that is, for example, while working in Poland, a person simultaneously paid a single social contribution in Ukraine and taxes in Poland, thus fulfilling the conditions for assigning a pension. Proportional pension conditions – for those who have not earned their pension in full in any of the countries. Depending on the length of service, part of the pension is paid by Ukraine, and the second part is paid by the country where the worker worked, for example, in Poland it is the Social Insurance Administration. For this, a special agreement on social security must be concluded between the countries.
There are several such countries: Poland, Slovakia, Czech Republic, Bulgaria, Spain, Portugal, Estonia, Lithuania, Latvia and others. With Germany, for example, a similar agreement was signed in 2018. At that time, about 43,000 Ukrainians paid social contributions there, now there are twice as many.
But there is no bilateral agreement with Italy, France, Norway and some other states, so the Ukrainian Pension Fund does not recognize the length of service earned there. Thus, you can either receive a Ukrainian pension (insurance experience 27 years), or the country where a potential pensioner worked (25-30 years of experience is also required).
The double pension scheme, taking into account the norm established in the agreement for calculating it with the summation of the insurance experience, as Vitaly Dudin explains, works as follows:
calculates the theoretical amount of the pension, as if the entire insurance period was acquired in accordance with the current legislation; to determine the theoretical size of the pension, when establishing the calculation base, only wages received in accordance with the law, as well as contributions, are taken into account; on the basis of the theoretical amount, the competent authority determines the actual amount of the pension, based on the proportion of the insurance experience acquired in different countries.
To receive a pension in any country, you must pay taxes and have the necessary work experience. Since taxes, as well as benefits on them, and contributions to pension funds are different everywhere, we will not dwell on each country in detail. A similar Ukrainian tax system (when income taxes and pension contributions are paid) works in most European countries, the rates are different. It is only worth recalling how it happens in Ukraine: 18% of personal income tax and 22% of ERUs, additionally, at the moment, 1.5% of the military tax. Total – 41.5% of the salary goes to payments.
By the way, taxes paid abroad on personal income are taken into account in Ukraine, if there are bilateral agreements between the countries. When filing a tax return in Ukraine, migrant workers have the opportunity to minus the amount of taxes that were paid at the place of work, in particular, on personal income tax. At the same time, foreign income will be legalized in Ukraine. But this scheme does not apply to the military fee.
In Ukraine, the tax burden on wages is higher than in the EU. But in a European country, as you know, you cannot pay tax on a part of the salary, and get the other part “in an envelope”. Therefore, the taxes are impressive. However, Ukrainians increasingly prefer to settle in Europe officially and pay all taxes. The benefit is obvious – in the future you can confidently apply for a pension. Although there is an important nuance – both the conditions for receiving and the amount of pension for citizens / non-citizens of a European country are significantly different.
However, foreigners, even without full experience, have the right to apply for a basic pension after having worked for a certain period. In Poland, for example, it is only 10 years old. And then draw up a total pension based on the results of work in different countries (if there is, again, a bilateral agreement between the countries). At the same time, the pension can be received regardless of the permanent place of residence after retirement.
How much a foreign pension can be counted on depends on the fulfillment of the conditions necessary for its appointment. Full-fledged payments are much higher than the minimum pensions, and they can be earned, given that many Ukrainians have been working for 20 years or more.
Vitaly Dudin draws attention to the main points. The main thing is to earn the necessary experience, while paying taxes regularly, which is what the main inhabitants of the country do. As a rule, many Ukrainians have at least a residence permit by this date. But, Dudin emphasizes:
It is important to clarify whether the employer really pays contributions to the local pension fund for you, whether you have been assigned an individual identification code, that is, whether pension savings are recorded.
One more nuance. Even if there is an agreement between the two countries, Ukraine and the European country where the migrant worker worked, it is necessary to confirm his work experience in another country and the right to receive a pension from there. Sometimes it can be difficult, especially in the absence of a residence permit. You should go to the international department of the Ukrainian PF (only in regional divisions) and provide the required documents. As a rule, these are certificates that the employment was official, about work experience, about salary, about contributions to the pension fund. All documents must be translated into Ukrainian and certified. Of course, this is the case if the main pension is issued in Ukraine.
Alas, if the work experience abroad cannot be confirmed, i.e. there are no necessary documents, and no seniority has been earned in Ukraine, then one can only hope for minimal social support from the state.