BETWEEN BUDGETARY SUPPORT AND SOCIAL INSURANCE: FINANCIAL RISKS AND SUSTAINABILITY OF UKRAINE'S VETERAN POLICY

Abstract

Background. The full-scale armed aggression against Ukraine has led to the rapid formation of a large veteran community, transforming veteran status into a long-term and systemic social risk. The existing system of veteran support, which is predominantly based on budgetary benefits and one-off compensations, increasingly generates financial risks and affects the financial sustainability of the social protection and compulsory state social insurance systems, particularly the pension system. The purpose of this study is to assess the financial risks and limitations of the benefit- and budget-based model of veteran policy in Ukraine and to substantiate the need for its gradual transformation toward social insurance mechanisms for war-related social risks.
Methods. The study employs an integrated methodological approach combining institutional analysis, comparative analysis, and a scenario-based assessment. The empirical basis includes official budgetary data for 2025–2026, legislative and regulatory acts, and analytical materials of national authorities and international organizations. Scenario modeling of the veteran population is applied to assess potential financial risks to the compulsory state social insurance system, with a focus on the Pension Fund of Ukraine under uncertainty about the duration of the war and the post-war recovery.
Results. The results demonstrate the emergence of a structural asymmetry in which veterans constitute a growing group of recipients of social and pension benefits while contributing only partially to insurance premiums. This imbalance generates long-term financial risks for the social insurance system. A comparative analysis of veteran support models in the United States, Israel, and Ukraine reveals the institutional limitations of a purely budgetary approach and highlights the advantages of integrating insurance-based mechanisms to ensure predictability and financial stability.
Conclusions. The study substantiates the feasibility of developing a hybrid social insurance model for veterans that combines budgetary guarantees, insurance funds, and active labor-market reintegration policies. The application of a scenario-based approach is justified as an effective analytical tool for assessing the financial sustainability of veteran policy in the context of Ukraine's European integration and long-term social risk management.