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Changes in sick and maternity leave payments

This is to inform you that Ukrainian law was amended on October 01, 2018 following the entry into force of the procedure for financing by the Social Insurance Fund of Ukraine (further the “Social Fund”) of policyholders (employers) to pay benefits to insured persons due to temporary inability to work as well as certain payments to people involved and injured in work accidents. This procedure was approved by Order No. 12 of the Social Fund’s board dated July 19, 2018 (further “Order No. 12”).

We have outlined below the most important of the aforementioned amendments introduced last October.

1. Preliminary control of correctness of payment accrual

 The Social Fund will conduct a preliminary verification of accrual of payments and, if any errors are identified, provide recommendations to rectify them before payment of funds. Doing so will allow avoiding the imposition of penalties for unlawful use of funds paid by the Social Fund.

2. Introduction of electronic document management

It is now also possible for policyholders (employers) to send required documents to the Social Fund using an electronic document management system and electronic digital signatures. To do so, policyholders (employers) must first sign an agreement for submission of electronic documents to the Social Fund.

3. New application form

A new application form has been introduced to combine the documents on the basis of which insured persons were paid before reorganization of the Social Fund for temporary inability to work and work accidents.  The main change was that two new columns were added to the form for duration of qualifying insurance period (both total and for the last 12 months) affecting percentage calculation and amount for maternity leave and sick leave for temporary inability to work. To fill out the application form, the duration of qualifying insurance period should be determined according to Appendix 9 to Order No. 10-1 of the Pension Fund of Ukraine (further the “Pension Fund”) dated June 18, 2014. This order can be issued by the Pension Fund upon the request of any policyholder. Companies have not been able to calculate on their own the duration of qualifying insurance period since October 01, 2018.

4. Deadlines for application form submission

Since October 01, 2018 policyholders (employers) are to submit application forms within 5 working days of the date of approval of the minutes of commission meeting (decision of the authorized body) as set out in Order No. 12.

It should be noted that deadlines have also been set and approved for the commission which must consider the documents sent by employees for benefit request as follows:

  • within 10 days of receipt for benefits for temporary inability to work and maternity benefits;
  • no later than the day following the day of request for funeral benefits.

 5. Payment notice

Employers have been required since October 01, 2018 to send a notice of payment using the form provided in Appendix 2 to Order No. 12 as soon as they receive the appropriate funds from the Social Fund. Such notice may be sent electronically using electronic digital signatures or by registered mail. Alternatively, it can also be handed over directly to the Social Fund.

Important note:  Employers must send notices within one month of the date of payment, and if no notice has been submitted within three months of payment, such failure could serve as ground for the Social Fund to conduct an inspection.