The World Bank will allocate $880 million for social protection reform in Ukraine
The war has laid bare one of the most serious problems in Ukraine’s social system—a complex, overburdened, and inefficient model of benefits and social payments. Over the years, Ukraine has accumulated dozens of different types of assistance, leading to a fragmentation of resources and significant bureaucratic hurdles for citizens.
Currently, there are over 50 different types of social support in the country, but this system often fails to provide timely and targeted assistance to people facing difficult life circumstances.
For example, an internally displaced person may simultaneously apply for assistance as an IDP, a low-income individual, and a single parent, having to gather several sets of documents and undergo numerous verifications.
In addition, experts highlight the lack of social services, such as care, rehabilitation, psychological support, and social assistance, particularly in small communities.
To address these issues, the government is launching the SPIRIT (Social Protection for Inclusion, Resilience, Innovation, and Transformation) project, which was approved by the World Bank’s Board of Executive Directors in May.
The total funding for the program amounts to $880 million. Of this amount, Ukraine will receive $860 million as a World Bank loan, with an additional $20 million coming as grant support from the United Kingdom and Germany through the Targeted Fund for Support, Recovery, Reconstruction, and Reform in Ukraine.
The project is expected to reach over one million citizens, including low-income families, the elderly, people with disabilities, and other socially vulnerable groups.
The SPIRIT project involves implementing three major changes to the social protection system.
Unification of social assistance through a basic social assistance mechanism. Instead of several separate programs, a “one-stop shop” principle will be introduced, allowing people to receive comprehensive support without excessive bureaucracy.
Establishment of a National Agency for the Procurement of Social Services. The plan is to implement the “money follows the client” principle, which will open the door for private and civil society organizations to participate in the provision of social services.
Reform of the disability assessment system. Ukraine is gradually moving away from the outdated MSEC model and adopting the World Health Organization’s approaches, which allow for the assessment of a person’s actual needs and their potential for rehabilitation and employment.
One of the key elements of the reform is Draft Law No. 15094 “On Basic Social Assistance,” which the Verkhovna Rada has already supported in the first reading.
The bill provides for the introduction of a new support system effective January 1, 2027.
The basis for calculating payments will be a base amount, which cannot be less than the subsistence minimum for able-bodied individuals. The amount of assistance will be determined as the difference between the established base amount for a specific family and its average monthly income.
The following will be eligible for basic social assistance:
low-income families;
persons of retirement age who have not acquired the required insurance record to receive a pension;
single mothers and fathers;
large families;
children whose parents do not pay child support or whose whereabouts are unknown;
people with disabilities who have been granted permanent disability status;
single citizens aged 65 and older with no other sources of income;
spouses who are unable to work and have no one obligated to support them.
Case management will be a key feature of the new system. Each family will undergo an individual needs assessment and receive social support.
A tripartite agreement between the paying agency, the community, and the aid recipient is also envisaged. The state will provide financial support and social services, while the citizen will participate in adaptation, employment, and social integration programs.
To test the new model, the government is already implementing a series of pilot programs.
These include:
providing inpatient care services for IDPs based on the “money follows the person” principle;
social support for military personnel and their families directly at military units;
comprehensive social services to build resilience;
temporary accommodation and support for internally displaced persons facing difficult life circumstances;
launching digital tools for social services management within the Unified Information System for the Social Sector.
At the same time, implementing the reform will require significant resources. According to estimates by the Ministry of Finance, an additional approximately 50 billion UAH will be needed to implement Bill No. 15094, and the sources of funding for this have not yet been identified.
There are also risks of inconsistencies between the new regulations and existing legislation on social services. If the necessary amendments are not made, the old and new payment systems may operate simultaneously, placing an additional burden on the budget.
The government plans to complete the harmonization of legislation, identify stable sources of funding, and minimize the risks of corruption in the social protection sector by the time the reform is launched.
The Ministry of Finance of Ukraine and the World Bank have signed an agreement for a loan of 236 million euros guaranteed by the Swedish government to ensure stable coverage of key social expenditures in the state budget.
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