Courts Diverged on Calculation of Payments to Military Personnel — Case Referred to the Grand Chamber

The Supreme Court, composed of the panel of judges of the Administrative Cassation Court, referred case No. 240/401/26 concerning the recalculation of a servicemember's monetary allowance to the united chamber of the Administrative Cassation Court due to the presence of different approaches in its own practice. The court must determine whether Cabinet of Ministers Resolution No. 481, which established a fixed calculation amount of UAH 1762 for calculating monetary allowances, is applicable.

According to the case materials, the plaintiff served in a border detachment of the State Border Guard Service of Ukraine and appealed to the court, believing that her monetary allowance was incorrectly calculated during the disputed periods from January 29, 2020, to June 15, 2021, and from October 3, 2022, to December 10, 2025. She requested a recalculation of payments using the subsistence minimum for able-bodied persons established by law as of January 1 of the respective year as the base calculation amount for determining official salaries and military rank allowances.

The Zhytomyr District Administrative Court, whose decision was upheld by the Seventh Administrative Court of Appeal, partially satisfied the claim. The court found that the military unit did not apply the current version of Cabinet Resolution No. 704 when calculating the plaintiff's monetary allowance, which constituted unlawful inaction during the specified service periods.

At the same time, the courts established that the calculation of official salaries and military rank allowances should be done by multiplying the subsistence minimum for able-bodied persons, established by law as of January 1 of the respective year, by tariff coefficients. Accordingly, the courts obliged the military unit to recalculate and pay the difference in monetary allowance for several service periods, taking into account payments already made.

However, the courts denied some claims for a separate period, noting that a different version of the regulatory framework was applied at that time, which provided for a fixed calculation amount of UAH 1762.

As a result, the claim was not fully satisfied, and it was precisely the part of the refusal that the plaintiff appealed in cassation, believing that the courts incorrectly applied substantive law norms and did not consider the Supreme Court's position regarding the procedure for determining the calculation amount for monetary allowance.

The panel of judges of the Supreme Court, evaluating the arguments of the cassation appeal and the decisions of the lower courts, noted that a consistent judicial practice has already been formed in disputes regarding the application of paragraph 4 of Cabinet of Ministers Resolution No. 704 in its various versions.

The court proceeded from the fact that the legal regulation of monetary allowance for servicemembers is defined by the Law of Ukraine "On Social and Legal Protection of Servicemembers and Their Families," which provides that the procedure and amounts of such allowance are established by the Cabinet of Ministers of Ukraine. To implement these provisions, Resolution No. 704 was adopted, which initially provided for the calculation of official salaries and military rank allowances by multiplying the subsistence minimum for able-bodied persons by the relevant tariff coefficients.

Subsequently, Cabinet Resolution No. 103 amended Resolution No. 704 by linking the calculation amount to the subsistence minimum as of 01.01.2018. These changes were recognized as unlawful and canceled by a court decision, restoring the original version of paragraph 4 of Resolution No. 704, which provided for the use of the subsistence minimum established on January 1 of the respective calendar year.

At the same time, from May 20, 2023, Cabinet Resolution No. 481 came into force, which again amended paragraph 4 of Resolution No. 704 and introduced a fixed calculation amount of UAH 1762 for calculating official salaries and military rank allowances.

The court noted that according to Article 265 of the Code of Administrative Procedure of Ukraine, a normative legal act loses its force from the moment a court decision recognizing it unlawful comes into effect, and therefore the legal consequences of such a decision have a prospective nature and do not automatically apply to legal relations that arose during the validity of the respective act.

The Supreme Court also emphasized that state authorities are obliged to act exclusively on the basis of and within the limits of current normative legal acts, in accordance with Article 19 of the Constitution of Ukraine. Therefore, the respondent's application of the version of the government resolution in force at that time, even if later canceled by the court, cannot automatically indicate the unlawfulness of its actions.

In this context, the court stated that in case of disagreement with a normative legal act, the proper way to protect rights is to challenge it, not to ignore its provisions within an individual dispute.

At the same time, the Supreme Court drew attention to the existence of different approaches in its own practice. In particular, some decisions emphasize the application of the original version of paragraph 4 of Resolution No. 704 using the subsistence minimum as of January 1 of the respective year, while others emphasize the need to apply the version in force at that time with the fixed calculation amount of UAH 1762.

Given this inconsistency in law enforcement and the need to ensure uniform judicial practice, the panel of judges concluded that there are grounds to refer the case to the United Chamber of the Administrative Cassation Court within the Supreme Court.

The court noted that such referral is necessary to form a unified approach to the application of Articles 7 and 265 of the Code of Administrative Procedure of Ukraine in disputes regarding the calculation of monetary allowance for servicemembers and the determination of legal consequences of changes to Resolution No. 704 introduced by Resolution No. 481.

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