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Full monetization of subsidies: what changes should Ukrainians expect?

As of October 1, 2019, a new mechanism for the payment of subsidies for housing and utility services is introduced: now the money will be transferred directly to people rather than service providers. Procedure for granting subsidies is to remain virtually unchanged, as are their scope after the introduction of monetization. This is reported by the Ministry of Social Policy.

Under the new rules, subsidy recipient will be able to choose where the funds will be transferred to: to one of the designated banks or UkrPoshta (cash desks at branches or postman delivery home). Previously monetized benefits could only be obtained from Oshchadbank.

Full subsidy monetization has been in place since this heating season and will take two forms: cash and non-cash, explains expert of the Energy Sector Reform Team of the RPR Coalition Sviatoslav Pavliuk.

“At the stage of non-cash monetization, the recipients receive money to their Oshchadbank account and pay the bills themselves. If the consumer has a debt, then the money goes to the subsidy recipient’s account, is automatically debited for payment, and the balance can be withdrawn after the heating period,” says the expert.

Mr. Pavliuk explains the decrease in subsidies budget for 2020 by the decrease in the market price for gas. But he admits that the Government may increase this budget item during the heating season if necessary.

According to the expert, one should not expect a reduction in the number of subsidy recipients, since their major part is pensioners, and there is no significant pension increase envisaged yet.

All problems with subsidy budget calculations will only disappear when the full subsidy monetization takes place. Only then is it possible to determine the exact number of people receiving benefits, believes the Coordinator of Housing, Utilities and Energy Programs of OPORA Civic Network Tetiana Boiko.

Of note, the budget for 2020 envisages 47 billion 628.6 million UAH for subsidies. The Ministry of Social Policy has recently explained how to apply for a subsidy online.