SC GC Determined, Which Types of Financial Support for Military Servants Shall Be Taken into Account while Calculating Pensions

While calculating pensions, such components of financial support as one-time additional types of financial support, particularly, annual, quarterly, single additional types of financial support shall not be taken into account, irrespectively on the fact, whether the unified social contribution to obligatory state social insurance has been paid from the noted types of financial support.

The Grand Chamber of the Supreme Court issued this opinion having considered the case No. 522/2738/17 on 6 February 2019 under the claim on the recalculation of granted pension of an individual, dismissed from military service, to the Pension Fund of Ukraine.

The plaintiff required to oblige the PFU to recalculate the pension, she was granted with, taking into account the financial assistance for medical care, pecuniary assistance for the solution of welfare issues, the award for the duration of continuous military service and cash awards, pursuant to the Disciplinary Regulations of the Armed Forces of Ukraine. Such demands were justified by the fact that the plaintiff had paid the unified social contribution to obligatory state social insurance from all specified types of financial support. However, the authority, which issued the certificate for granting the plaintiff with pension, had not taken them into account; this fact resulted in granting the plaintiff with smaller pension.

Having analyzed the Law of Ukraine "On Pension Provision of Persons Dismissed from Military Service, and Some Other Persons" of 9 April 1992 and the Resolution of the Cabinet of Ministers of Ukraine No. 393 “On the Procedure of Calculation of Service Length, Granting and Payment of Pension and Financial Assistance for Officers, Warrant Officers, Midshipmen, Extended Military Servicemen and Volunteer Military Servicemen, Ordinary and Management Staff of Internal Affairs Bodies, Policeman and Members of Their Families” of 17 July 1992, the judges of the SC GC concluded that only monthly basic types of financial support: official salary, pay for rank, seniority allowance, as well as monthly additional types of financial support (surcharge, benefit, pay increment) and awards, which shall be also be monthly, shall be referred to financial provision, from the amount of which the pension shall be calculated

Thus, the payment of the unified social contribution shall not be an undoubted reason for the inclusion of a payment, from which the contribution has been recovered, into the financial support, from the amount of which pension shall be calculated.

At the same time, the recalculation of pensions due to changing the amount of at least one type of financial support for relevant categories of military servicemen, persons authorized to have such re-calculation pursuant to the noted Law, or due to the introduction of new monthly additional types of financial support for the noted categories of persons (surcharges, benefits, pay increments) and awards in the legally established amount, which has not been held for reasons attributable to the PFU bodies and/or public bodies, which issue certificates for the re-calculation of pension, shall be conducted from the date of appearing the right to it without the restriction by term (part 3 of article 51 of this Law).

Nevertheless and taking into account the fact that the plaintiff at the moment of granting the pension pursuant to the Law No. 2262-XII had been authorized to include the received monthly additional award into her financial support, from the amount of which the pension should be calculated, and the PFU Department had illegally refused to hold the recalculation of pensions, the claim in terms of obliging the defendant to re-calculate pensions, taking into account the noted monthly additional type of financial support without the restriction by term, was satisfied.

Under exceptional circumstances, the SC GC deviated from opinions of the Supreme Court of Ukraine noted in the Resolution of 10 March 2015 (case No. 21-70a15) as for the application, in similar cases, of Article 9 and part 3 of Article 43 of the Law of Ukraine No. 2262-XII, that the financial assistance for medical care, pecuniary assistance for the solution of welfare issues, indexation and one-time financial assistance while dismissal, from which insurance contributions for obligatory state pension insurance were paid, shall be referred to the composition of financial provision for military servicemen, from the amount of which the pension is calculated.

Follow the link http://www.reyestr.court.gov.ua/Review/80224649, to see the full text of the resolution.