Starting next year, only married couples with an average monthly gross family income below 5,000 hryvnias, assessed over the previous six months, will be eligible for one-time childbirth benefits. That is the gist of Article 60 of the draft of the 2007 budget law, which has been posted on the Verkhovna Rada’s Web site. The article was also read by Deputy Finance Minister Serhii Rybak at a press conference.
According to the minister, the restriction is explained by the 2007 budget’s focus on helping socially unprotected population groups. However, that same day Minister of Finance Mykola Azarov refuted this during his appearance on a central Ukrainian TV channel: “There are no restrictions on childbirth benefits whatsoever, and the 2007 budget is socially oriented; it’s a budget aimed at development.” He emphasized that information about such social payment cuts is explained by the fact that “shameless maneuvering is often used against the government.” In a word, it is anyone’s guess whether these restrictions will be instituted because the finance minister’s statement and the Article 60 obviously contradict each other.
Figuring out the implications of this clause for Ukrainian demography is an even more pressing issue. At one time experts described the substantial increase in the lump-sum childbirth benefits as a concrete achievement of the Orange government in the social sphere. As of April 2005, childbirth benefits amounted to 8,500 hryvnias per birth, with 3,384 hryvnias paid as a lump sum and the remainder spread out in equal payments over 12 months. A month ago, the Ukrainska Pravda Web site carried a statement by Kyiv obstetricians and gynecologists, who cited the twofold increase in the number of pregnant women in Ukraine.
According to the statistics of a polyclinic in Kyiv’s Shevchenko district, 33 percent more pregnant women were recorded during the first six months of this year compared to the same period last year, and most of these young mothers with average or low incomes. Doctors say that social reform - namely, one-time childbirth benefits - must have played a major role in boosting reproduction.
Five thousand hryvnias is a considerable sum, so the receipt of 8,500 hryvnias, especially divided into 12 or 13 payments, is not all that important for a family in this income bracket. Nevertheless, women do not usually work right after giving birth, and the family has to live on the husband’s salary, not the couple’s combined income from six months earlier.
Can’t the Ukrainian government anticipate a situation in which a husband earns less than his wife? “I believe that this high restriction limit will not have any devastating effect on the demographic situation. On the other hand, there will be no special budget appropriations, because only a small percentage of taxpayers earns salaries at this level. It will just annoy and anger people, and there will no benefit. As a rule, these kinds of payments are necessary; they are part of demographic development programs. I believe that we’ll have a peak in the birth rate in 2006 or maybe in 2007. After that the situation will return to ‘normal,’ so we need to think about other aspects, like achieving gender equality, so that after a woman gives birth to a child she won’t have to shoulder all the responsibilities, so that the child won’t interfere with her career. Things like that are far more important than a one-time childbirth payment,” says economist Ella LIBANOVA, Ph.D.
“Without a doubt this decision will affect the demographic situation in Ukraine,” says Lidia LEONTIEVA, the director of the State Institute for the Development of Family and Youth. “Our surveys show that the financial factor is crucial with regard to married couples that decide to have children. I know that lots of families have planned their budgets to cover the postnatal period, and now they are faced with this unpleasant surprise. The restriction will have a very negative effect on the social and moral domain. This impact will add to our citizens’ habitual distrust of the government. Some will say that the authorities have canceled payments for wealthy families today, and tomorrow they will cancel them for families with lower incomes. The president came up with his program ‘Ten Steps toward the People’ and promised these payments to all women; now we have to fulfill all those social promises and stick to the established course.”
Our Ukraine appears to be determined to uphold these payments. Ihor Zhdanov, the deputy head of the OU’s executive committee says the proposals to the state budget on restrictions to the childbirth payment, as proposed by Yanukovych’s cabinet, are unacceptable: “According to statistics, the birth rate is rising; this is proof that the president’s policy is socially oriented and justified. Under the circumstances, what the Party of Regions is doing is beyond comprehension. These proposals are also unacceptable from the legal standpoint. According to the Constitution of Ukraine, benefits enjoyed by Ukrainian citizens cannot be reduced. If Article 60 of the budget bill is not altered, Our Ukraine promises to torpedo the bill.
