The government’s decision to increase child birth benefits: will this solve the demographic crisis in Ukraine?

Against the background of critical demographic dynamics, which intensified after the full-scale invasion, the Cabinet of Ministers of Ukraine approved the draft law, which provides for a significant increase in one-time assistance for the birth of a child – from 10,300 to 50,000 hryvnias. On the eve of the expected personnel changes, the government decided to make a nice gesture, presenting it as a step to strengthen social protection for families with children. However, is one-time financial assistance able to encourage families to have children? This draft law can become a test: whether the state is able to look into the face of the demographic catastrophe and start working with its deep causes, or whether it will again follow the familiar path – try to temporarily silence the problem with a financial injection – a quick but superficial remedy that does not cure the disease, but only relieves the symptoms.

What does the draft law on comprehensive support for families before and after the birth of a child provide for?

Denys Shmyhal announced large-scale changes in the state support system for families with children. The Cabinet of Ministers of Ukraine approved the draft law, which covers payments after the birth of a child, monthly care allowance, a new program for parents who want to return to work, as well as the preservation of existing forms of social support. One of the main points of the document is an increase in one-time cash assistance to a woman after the birth of a child. Currently, its amount is 10,300 hryvnias, and after the adoption of the new law, this amount should increase to 50,000 hryvnias.

Separately, a new approach is provided for women who have given birth to a child but do not have insurance or work experience. As of now, such assistance does not exceed 1,000 hryvnias per month. After the adoption of the draft law, it is proposed to increase it to 7,000 hryvnias every month. It is a fixed amount that should be the same for all women, without exception, who were not officially employed or did not have insurance contributions before the birth of a child.

Another innovation is the monthly allowance for the care of a child up to one year old. It will be assigned to one of the parents or an official guardian and will be paid during the first twelve months of the child’s life. The specific amount of this assistance is not fixed in the draft law — it will be established by a separate decision of the Cabinet of Ministers after the adoption of the law. This provision will be an additional form of support beyond the one-off post-natal benefit.

After the child reaches one year, parents will be able to choose between two scenarios. The first is to return to work, the second is to continue caring for the child at home until the age of three. It is for this purpose that the draft law envisages the launch of the “eYasla” state program. If the parents choose the option of returning to work, the state will pay them 8,000 hryvnias every month. If the second option is chosen, the mother or father will be responsible for the payment of the single social contribution (USC) in full until the child turns three years old. This will allow you to record your insurance history and not interrupt your work history, even in the case of a temporary stay at home.

The draft law also contains provisions on the preservation of the already valid “Baby Package” program. Parents will continue to have the right to choose: either receive a set of things for the newborn, or issue monetary compensation. The amount of compensation has not changed and it amounts to more than 7,500 hryvnias.

Separately, the Prime Minister announced another initiative that does not concern newborns, but school-age children. The government has approved the “Student’s Package” program — a one-time financial aid for parents of children who will study full-time. The amount of this assistance will be 5,000 hryvnias. Funds can be used to purchase clothes, shoes, school supplies or other necessary items. According to the explanation, the charging mechanism will be similar to the current practice with compensation for the “Baby Package”.

The Prime Minister outlined the initiative as a change in the state’s approach to social policy in the field of motherhood and childhood. According to him, the government is not just updating individual payments, but implementing a system that takes into account the needs of families at all the main stages – from the birth of a child to his entry into school. Within this system, both direct cash transfers and additional mechanisms related to employment, insurance and the choice of a model of behavior after childbirth are provided.

The document must be considered in the Verkhovna Rada, if adopted, it will become a valid law, and the specified provisions will enter into force after the official publication and approval of all by-laws. The Cabinet of Ministers will also be empowered to determine the specific parameters of the monthly allowance, in particular the amounts, terms of calculation and the procedure for submitting applications.

Financial assistance instead of a comprehensive policy

The government’s proposed bill to help families and increase the amount of the one-time birth allowance certainly looks attractive. However, these point solutions will not change the trajectory of the demographic decline in Ukraine, but on the contrary, they can deepen a number of social problems if they remain detached from the broader systemic policy. A financial bonus cannot replace a sense of security, social stability, and confidence in the future. It is they, and not a lump sum, that are decisive for whether a young family decides to have a child in conditions of war and instability.

An example of the early 2000s is still fresh in public memory, when a significant increase in benefits after the birth of a child led not to a baby boom, but to a wave of social abuses. The program was massively joined by people with low social responsibility, who perceived the child as a tool for earning. Within a few weeks after the payments, a large part of the newborns ended up in boarding schools or were abandoned. The state spent billions on stimulating the most vulnerable part of the population and at the same time did not receive the growth of a healthy, socially included generation.

Now, when the minimum wage in Ukraine is UAH 8,000, and the monthly child benefit is UAH 7,000, some socially vulnerable groups have the illusion of “alternative employment.” Instead of looking for work, addiction treatment, or rehab, individuals will see children as a source of passive income. In the realities of poverty, alcoholism and lack of control, such “investments in fertility” can also, as before, end in tragedies: abandoned children or babies thrown into the garbage. Now these cases are not isolated.

The consequences of such a policy are already well known: low-quality population growth, spending on boarding schools, and criminalization of the social environment. At the same time, those families with an average income, education, and integration into society do not respond to such payments from the state, because their decisions are based on completely different criteria.

It should be understood that a person decides to give birth to a child not because of monetary payments, but when he feels protected, when he sees a perspective 10-20 years ahead. Security, affordable housing, quality medicine, a fair tax system, a predictable economy – these are what create an environment conducive to fertility.

Ukrainian society is in a state of protracted turbulence: full-scale war, continuous missile attacks, migration, loss of property, destroyed medical and educational infrastructure, blurred prospects for post-war reconstruction. In such an environment, the birth rate falls not because of the lack of 50,000 hryvnias, but because of uncertainty that this child will have something to feed, treat, educate and protect. Another factor is added to this: the mass departure of young women of reproductive age abroad who give birth, but no longer in Ukraine. That is, the homeland ceases to be a center of security for them. Increasing the child benefit in such a case is not an argument when life is more stable and promising in a foreign country.

In addition, Ukraine is trying to copy one of the parts of the model of stimulating the birth of children in European countries – the monetary component, ignoring all the others. At the same time, this component itself turns out to be much more modest than it was in our country: if in 2012 the payment at the birth of a child was 27,900 UAH, which was equal to approximately 3,500 dollars (at the exchange rate of 8 UAH), then today’s 50,000 UAH is less than 1,250 dollars (at the exchange rate of 40 UAH). Therefore, the amount decreased by three times. Citizens see this and draw appropriate conclusions.

The experience of other countries regarding the exit from the demographic crisis

Successful examples of solving the demographic crisis in different countries prove that no country has been able to increase the birth rate solely with the help of monetary aid. Where it was possible to stop the recession, a comprehensive approach was used: social infrastructure, support for working parents, long-term tax incentives, etc.

France is considered one of the leaders in Europe in terms of fertility, according to Eurostat it has the highest total fertility rate in the European Union, with a rate of 1.8 newborns per woman. This is higher than the EU average of 1.46. And this is the result of a long-term reasonable demographic policy. The French model is not limited to one-time payments, the country operates a system of universal family allowances, regardless of income. Families with two children receive a monthly allowance that increases with each additional child.

The main thing in this is that conditions have been created that allow you to combine motherhood and professional activity. This is an extensive network of free kindergartens, flexible working hours, parental leave for both parents, numerous tax benefits for families. In addition, there is a “coef familial” system, which reduces the tax burden on a family in proportion to the number of children.

In Sweden, the birth rate is also consistently high at 1.7 newborns per woman. One of the reasons for this is the extensive parental leave system: 480 paid days, of which both parents must use at least 90 days each. This encourages men to be actively involved in education, and women not to lose touch with the labor market.

Families with children receive a fixed monthly allowance (barnbidrag), but the bigger role is not played by money, but by institutions: quality free medicine, access to kindergartens, subsidized transport, subsidized housing. The state also finances support programs for young mothers, psychological assistance, and educational programs.

After the reunification of Germany, the country faced a precipitous drop in the birth rate, especially in the eastern regions. During the 2000s, the government reformed the policy: “Elterngeld” was introduced, a cash allowance for parents in the first 14 months of a child’s life, proportional to their previous income. This made it possible to reduce the fear of loss of earnings. In addition, the country actively invested in the expansion of the network of state kindergartens – between 2006 and 2019, the number of places in nurseries tripled. This reduced barriers for women in the labor market. In combination with a well-thought-out migration policy (active integration of refugees and migrant workers), Germany was able to stabilize the demographic situation.

Japan is an example of a country where money alone did not work. There, the government has been increasing cash payments for years, launching campaigns such as “one district – one child”, and encouraging companies to support parenthood. However, the birth rate remained one of the lowest in the world (less than 1.4). This forced the authorities to make structural changes – reforming the traditional labor system, combating overemployment of men. The state began to support employers who introduced flextime, allowed parents of young children to work from home, changed educational policies in schools to foster an equal attitude to the roles of mother and father.

South Korea has spent billions of dollars on cash fertility programs. Parents received assistance at birth, municipal benefits, bonuses. However, at the same time, the hypercompetitive labor market, lack of kindergartens and discrimination against working mothers persisted. The result was a record low birth rate (less than 0.8 in 2024). Now the South Korean government is forced to radically change its approach: introduce free daycare, early education programs, fight stress and depression among parents, and form a new social culture of family support.

Italy has long held on to a policy of modest cash bonuses and tax breaks, hoping it would boost birth rates. However, without accessible childcare infrastructure, without reforming the labor market, without reducing the unpredictability of life – the situation only worsened. In 2022-2024, the birth rate has decreased to 1.2. Now the Italian government is changing its approach: instead of direct aid, it is building kindergartens, supporting young families with housing, subsidized loans, expanding programs to support women in employment.

It should be noted that the successful models of demographic policy implemented in different countries have a number of common features that allowed either to stabilize the birth rate or to moderate the pace of its decline. It is not about isolated solutions or monetary incentives, but about multi-component approaches that cover the social, economic and cultural spheres. First of all, the key is the reorientation from direct cash assistance to the systemic development of social services. This means creating an environment in which a family is not afraid to give birth: accessible kindergartens, medical care, psychological support for parents, support for motherhood and fatherhood in educational and labor structures. Where parents are sure that their child will be cared for, treated, and taught, the decision to have a second or third child becomes more weighted and less risky.

The second feature is the full support of both parents, not just the mother. The most successful countries, such as Sweden, Norway, and Iceland, have introduced paid leave for both parents, with the father having to use part of the days personally. This not only relieves the mother, but also contributes to the cultural shift towards equal parenting. Men begin to be more involved in education from the first months, which positively affects the stability of families and the desire to have more children.

The third common feature of the countries is planning and long-term policy. Demographic solutions do not work in an annual budget cycle. They give results only when they are implemented in the horizon of decades, without drastic changes in the rules of the game. Successful countries have stable family support programs that have been in place for more than 10–15 years. This builds trust in the state: young people know that after the birth of a child, they will not lose their job, they will not be left without a kindergarten or a doctor, and the support system will not disappear with the new minister.

And finally – work with education and culture. In many countries (Finland, France, Japan) extensive campaigns are being conducted to change attitudes towards family, parenting, and child support. They form a new idea about the role of the father, about respect for large families, about responsible parenthood. It is these long-term efforts that lay the groundwork for change that does not come about through money, but through changing norms and expectations in society.

Ukraine should study these examples, and not copy isolated monetary solutions. Improvement of the demographic situation is possible only under the condition of a comprehensive and systematic approach on the part of the state. First of all, it is stability. Secondly, a new type of social policy. It should include effective measures to create conditions for the return of refugees from abroad, tax benefits for working parents, free kindergartens with a quality guarantee, expanding access to medical services for pregnant women and children, providing housing for young families, labor market reforms for women with children. Long-term family support programs are needed, where support is not one-time, but systemic. It’s more difficult than just giving families 50k, but it’s the only thing that will work.

Thirdly, there is a paradigm shift. The state should stop treating children as a “cell in a column” or a “budget item”. Every child is a citizen who needs a safe environment for development. Increasing the amount of child benefit is a gesture, not a reform, a simple solution to a complex problem. However, as recent experience shows, it is simple solutions in complex situations that only create new problems.

If the government and parliament really want to fight the demographic crisis, they should start with security, stability, effective reforms and trust. The birth rate begins to rise where there are prospects for a successful future, not where money is given once.