The base for calculating military payments will remain at the 2018 level — 1762 UAH: The Supreme Court recognized Resolution 481 as lawful

On July 16, the panel of judges of the Cassation Administrative Court within the Supreme Court adopted a resolution that changes the direction of judicial practice in cases concerning the monetary provision of servicemen. Case No. 320/29450/24 concerned the appeal against paragraph 2 of the Cabinet of Ministers of Ukraine Resolution No. 481, which established a fixed amount of 1762 UAH for calculating official salaries. The Supreme Court annulled the decisions of the courts of first and appellate instances, which had recognized the paragraph of the Cabinet of Ministers' resolution establishing such a fixed base as unlawful.

Thus, the Cabinet of Ministers of Ukraine has the authority to determine the amounts of monetary provision for servicemen, including setting the base amount for calculating official salaries and salaries for military (special) ranks.

The nature of the dispute

In May 2023, the Cabinet of Ministers amended paragraph 4 of Resolution No. 704 on the monetary provision of servicemen by Resolution No. 481. The government established that official salaries and salaries for military (special) ranks are calculated based on 1762 UAH by multiplying this amount by the corresponding tariff coefficient.

The plaintiff considered these actions of the Cabinet of Ministers unlawful. The main argument of the plaintiff was that monetary provision should be calculated based on the current subsistence minimum as of January 1 of the current year, not the fixed amount of 1762 UAH, which corresponds to the 2018 level.

The plaintiff noted that instead, the Cabinet of Ministers effectively re-established the subsistence minimum for able-bodied persons as of January 1, 2018, as the calculation base. In his opinion, the subsistence minimum set on January 1 of each current calendar year should have been applied for calculating monetary provision.

The court of first instance, whose conclusions were supported by the appellate court, proceeded from the fact that the amount of monetary provision as a payment, which is decisive when recalculating pensions, is established by the Cabinet of Ministers of Ukraine within its powers regarding the determination of pension recalculation amounts.

At the same time, the courts noted that the Cabinet of Ministers of Ukraine is not authorized and does not have the right to establish a fixed (solid) calculation base for determining official salaries. According to the courts, such an approach is not provided for and does not comply with higher legal normative acts — the Law of Ukraine "On Pension Provision for Persons Released from Military Service and Some Other Persons" and Law No. 1774-VIII.

What the Supreme Court established

The Supreme Court emphasized that part four of Article 9 of Law No. 2011-XII directly establishes that the monetary provision of servicemen is paid in amounts set by the Cabinet of Ministers of Ukraine. Therefore, setting the amount of monetary provision for servicemen is within the legal regulation sphere of the Cabinet of Ministers of Ukraine, including setting the base amount. At the same time, the determination of the amount of monetary provision by Law No. 2011-XII is delegated to the Cabinet of Ministers of Ukraine. The government is granted the authority to establish conditions, procedures, and amounts of components of monetary provision.

The court noted that the basic criterion for determining components of monetary provision is a decisive amount, since it is from this indicator, by multiplying by the corresponding tariff coefficients, that the main types of payments are calculated during the monetary provision calculation.

In particular, Resolution No. 704 approved the mechanism for determining the amount of monetary provision for servicemen, persons of the rank and command staff, and some other persons, as well as established the basic criterion for calculating such monetary provision.

In view of this, the Supreme Court found the conclusions of the courts of first and appellate instances that the Cabinet of Ministers of Ukraine is not authorized and does not have the right to establish the calculation base for determining official salaries, including in a fixed amount, to be erroneous.

The panel of judges also noted that the conclusions of the Supreme Court should be applied taking into account the specific factual circumstances of the case in which they were formulated. At the same time, the lower courts mistakenly applied legal conclusions set out in the Supreme Court resolutions in cases No. 826/6453/18, No. 826/3858/18, and No. 440/6017/21, since the legal relations in those cases are not similar to the legal relations in case No. 320/29450/24.

Therefore, according to the Supreme Court, the courts of first and appellate instances mistakenly equated different legal relations, which led to the incorrect application of part four of Article 9 of Law No. 2011-XII and paragraph 3 of section II of Law No. 1774-VIII.

Under these circumstances, the Supreme Court did not find legal grounds indicating the unlawfulness of the Cabinet of Ministers of Ukraine’s actions when adopting Resolution No. 481. The court stated that the government has the right to set the amount of monetary provision for servicemen, including the base amount for its calculation, which is directly provided for by Law No. 2011-XII.

In connection with this, the Supreme Court annulled the decision of the Kyiv District Administrative Court and the ruling of the Sixth Administrative Court of Appeal and satisfied the cassation appeal of the Cabinet of Ministers of Ukraine.

Thus, the Court recognized as lawful the provisions of Cabinet of Ministers Resolution No. 481, according to which official salaries and rank salaries are calculated based on the fixed amount of 1,762 hryvnias. This corresponds to the subsistence minimum as of January 1, 2018. Had the Court supported the plaintiff’s position, salaries would have been calculated based on the subsistence minimum as of January 1 of the current year, which would have led to a significant increase. This decision means that there will be no automatic increase in official salaries for servicemen due to the increase in the subsistence minimum in Ukraine. Monetary provision will continue to be calculated according to the methodology defined by the government in 2023, which keeps the calculation base at the 2018 level.

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