Temporary Ban on Pension Garnishment During Martial Law Does Not Work Automatically for "Universal" Cards

The issue of balancing the creditor's right to enforce a court decision and the debtor's right to minimum social guarantees has become more acute under martial law. Despite legislative safeguards prohibiting garnishment of pensions, practice faces the technical impossibility of identifying the source of funds in bank accounts. The Supreme Court ruling dated June 23, 2026, in case No. 554/11715/24 demonstrated how courts interpret the targeted purpose of accounts and allocate the burden of proof between participants in enforcement proceedings.

Pension Under Arrest

The dispute arose after a private executor initiated enforcement proceedings in October 2023 to recover debt in favor of JSC "Poltavaoblenergo." Within the proceedings, all accounts of the debtor, who is a pensioner and a person with a Group II disability, were frozen.

The plaintiff claimed that one of the frozen accounts was used exclusively for crediting pension payments. Nevertheless, funds were debited to repay the debt. The pensioner insisted that at the time of garnishment, Law No. 2129-IX was in effect, which during martial law limited garnishment of certain social payments, including pensions.

The plaintiff argued that the actions of the executor and the bank effectively left him without his sole source of livelihood. Believing his rights were violated, he filed a lawsuit demanding joint recovery from the private executor and the bank of over 1 million UAH in material and moral damages.

The plaintiff based his legal position on three main arguments.

First, the existence of a legislative ban on pension garnishment. After the entry into force of Law No. 2129-IX, garnishment of pensions and other social payments was suspended during martial law, except in certain cases, such as garnishment of alimony and debts in favor of citizens of the aggressor state.

Second, improper performance of duties by the bank. According to the plaintiff, the bank should have determined that the frozen account was used for pension payments and, pursuant to Article 52 of the Law of Ukraine "On Enforcement Proceedings," notified the private executor, returning the arrest order without execution regarding funds protected from garnishment.

Third, unlawful actions of the private executor. The plaintiff claimed that the executor froze and garnished funds knowing their social and pension origin. He believed such actions violated the legal guarantees protecting pension payments during martial law.

Supreme Court’s Reasoning

Considering the cassation appeal, the Supreme Court upheld the decisions of lower courts denying the claim.

The courts established that the plaintiff’s account was "universal," not an account with a special usage regime. This means any funds could be credited to it, not only pension payments.

The court reasoned that the actions of the bank and private executor were within the powers granted by law, so there were no grounds for civil liability.

Regarding the duty to identify funds, the court referred to Articles 52 and 59 of the Law of Ukraine "On Enforcement Proceedings" and noted that the executor has the right to freeze funds in the debtor’s accounts if there is no direct legislative prohibition. At the same time, the bank is obliged to notify the executor about the special status or targeted purpose of the account. Since the account was universal and not marked as special, the bank had no legal grounds to independently exclude it from arrest or block execution of the order.

The court also emphasized the importance of the debtor’s procedural activity. It noted that the plaintiff had the opportunity to protect his rights within enforcement proceedings, including submitting documents confirming the pension nature of the funds, filing a motion to lift the arrest, or appealing the order. However, these procedural mechanisms were not used, which the court regarded as inactivity in protecting his rights.

Ultimately, the court concluded that to recover damages under Articles 1166 and 1167 of the Civil Code of Ukraine, it is necessary to prove unlawful conduct, damage, causal link, and fault. Since the executor and bank acted within the law and based on valid enforcement documents, there was no civil offense in their actions.

The court effectively established a practical algorithm for behavior in similar disputes, defining the limits of protection of social payments in enforcement proceedings.

The mere fact of pension crediting to a bank card is not sufficient for automatic recognition of the arrest as illegal if the account is opened as universal and does not have a special usage regime.

The court also distinguished the responsibilities of participants in enforcement proceedings. The bank is not liable for executing a lawful order of a private executor if it has not received proper notification about the special status of the account or restrictions on garnishment.

Separately, the court stressed the principle of burden of proof allocation: the initiative to protect rights lies with the debtor. He must provide the executor with documents confirming the targeted purpose of funds and, if necessary, promptly appeal relevant actions within enforcement proceedings.

In a broader sense, the decision shows that martial law itself does not operate as an "automatic immunity" from garnishment. To apply relevant prohibitions, proper documentary evidence is required in each case, along with active procedural conduct by the debtor.

Main Conclusions:

Using "universal" cards to receive pensions creates a risk of immediate arrest and debiting of funds. It is recommended to open specialized pension accounts or promptly submit income source certificates to the executor after arrest.

In damage recovery cases, proving the unlawfulness of the executor’s actions is key. If the debtor does not exercise the right to provide evidence of the targeted purpose of funds or does not appeal the arrest order itself, chances of winning a damage claim approach zero.

The decision confirms the protection of financial institutions executing instructions of executors regarding general current accounts, even if the client insists on their "pension" nature post factum.

Ignoring procedural opportunities at the enforcement stage cannot be compensated by a future damage claim.

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