Zelensky's Thousand: Who will receive government assistance and what are the issues with this idea?
Financial assistance of 1000 hryvnias for Ukrainians is set to begin in December. The reasons behind this initiative and its implementation, – were explored by RBC-Ukraine special correspondent Yuriy Doshchatov.
The proposal from Volodymyr Zelensky regarding financial support for Ukrainians in the amount of 1000 hryvnias as part of the new "eSupport" program, announced at the end of last week, has elicited mixed reactions within the expert community. It has been labeled potentially ineffective and purely populist.
However, the proponents of this initiative, reportedly led by the Ministry of Economy, believe such an assessment is unfair.
The decision to provide financial assistance to Ukrainians was made to support them during the winter, which is expected to be challenging due to the risks of power outages. The 1000 UAH can be received until the end of February 2025.
Furthermore, amid scandals involving prosecutors, this move may help balance public sentiment. The initiative was formalized into a specific program only recently, according to sources from the publication, just a week ago.
The amount of support is relatively small. 1000 UAH is unlikely to significantly impact the financial situation of most Ukrainians. However, for some individuals, it will be quite meaningful, according to the Ministry of Economy.
The number of people living below the poverty line in Ukraine currently reaches 30%. The unemployment rate is approximately 14%, with nearly 3.5 million internally displaced persons, and about 6.4 million out of 10 million pensioners receive pensions of up to 5,000 UAH. It is for these individuals that financial assistance will be relevant, according to the program developers. For instance, if a family consists of three people, then 3000 UAH should be sufficient to cover utility bills for a month.
Where the funds will come from
The disbursement of 1000 UAH will not require additional expenditures from the state budget, the Ministry of Economy assures. The funds will be gathered from unused resources from budget programs in 2024 and from the remaining financing of the "National Cashback" program, which was allocated 3 billion UAH. So far, this program has not been utilized as actively as expected, with only 2 million cards opened and just 140 million UAH spent since September.
The financial assistance program is planned to launch on December 1 and will be "linked" to the "National Cashback." This means that to receive the funds, one must have a "National Cashback" card. Without it, there will be no alternative way to receive the money.
The option “Receive 1000” will appear in "Diia" for this card, and upon its application, the money will be credited to the account. They do not plan to tax this amount as it will be considered state assistance.
The funds can be used for the same purposes as the cashback: payment of utilities, tickets for concerts and theater performances, Ukrainian-made medicines, and books. It will also be possible to donate 1000 UAH for the needs of the army. The government cannot directly allocate these funds to the military since they come from donors and are not intended for military expenditures. However, through "eSupport," it will be possible to donate to the army, as the money will no longer be donor funds but from Ukrainian citizens.
As RBC-Ukraine clarified, according to government forecasts, considering previous population support programs during COVID, no more than 15 million people are expected to join the new "eSupport" program. Those currently living abroad as refugees will not be able to receive the funds. The disbursement will take place after verifying the applicant's location. Thus, no more than 15 billion hryvnias will be needed for the payouts.
Why criticism arose
Financial support for Ukrainians during difficult times, especially during wartime, is undoubtedly a necessary step. It was implemented during the COVID pandemic and at the beginning of the war. Back then, 1000 UAH was paid as an incentive for vaccination and 6,500 UAH for job loss. The philosophy behind those payments was clearly defined, and the assistance had a tangible effect.
Currently, according to the program developers, the philosophy revolves around providing help during the cold winter with potential energy supply issues. However, it’s quite difficult to envision how 1000 UAH could genuinely assist people during power outages due to shelling, the likelihood of which remains fairly high.
Moreover, the negative perception of the decision to pay 1000 UAH has intensified due to its announcement amidst tax increases. In other words, on one hand, the state is taking money, while on the other, it is giving out 1000 UAH to each person.
Nonetheless, the program has clear "pluses." Primarily, it activates the "National Cashback" program and increases donations to the army. Sources from the government indicate that these are two expected outcomes.
The legal formalization of the program to allocate 1000 UAH to Ukrainians, meaning the corresponding Cabinet decision, is planned for mid-November to give people time to obtain "National Cashback" cards by December 1.
If any Ukrainians experience technical difficulties in obtaining cards, particularly pensioners, "Ukrposhta" may provide assistance. Government sources state that if necessary, a cooperation agreement with "Ukrposhta" can be established to facilitate the program's implementation. Postal workers may assist pensioners in obtaining their cards.