Ukraine has established social insurance scheme which provides benefits for their nationals their dependent in the event of sickness, personal injury and death.
This scheme was launched by adoption of the law known as Law on Compulsory Social Insurance Against Industrial Accidents and Disease (LCSIAIAD).
Under this compulsory insurance system any employer must pay the insurance premium to The Social Insurance Fund (SIF) for his employee who will claim directly on the insurance for damage for work-related sickness, personal injury and dearth.
Any Ukrainian crewmember employed by an Ukrainian-based shipping company is a member of SIF and receives a benefit from that Fund.
The Social insurance scheme provides:
- lump-sum payment to a crewmember for permanent disability ( max USD 500) plus monthly compensation of wages in case of disability (average monthly wage but not more than max USD 500 per month)
- lump-sum payment to the family of a crewmember died ( max USD 30000) plus annual wage of crewmember to each dependent relatives ( max USD 6000) plus part of monthly wage of crewmember to each under-age child upto their adulthood.
- disability pension
- dearth pension to dependent relatives of the crewmember
- compensation of funeral expenses
- medical treatment of crewmember which is required to recover in case of injury and illness.
Insurance premium for that social insurance benefit is not a heavy burden for a shipowner since maximum annual premium is amount to USD 40 per a crewmember.
This social insurance scheme benefits not only for crewmembers who are employed by Ukrainian based shipping company but can benefit also for crewmember employed by overseas shipping companies.
The article 11 of the above mentioned Law (LCSIAIAD) makes provision a voluntary insurance of employee directly with The Social Insurance Fund. Mariners who work on foreign-flag vessels belongs to the category of employees who provides employment themselves. They can insure themselves directly with SIF but the application of LCSIAIAD’s provision for such insurance is under implementation now.
Within last years Ukrainian shipping industry is suffering the decline of number of ships under Ukrainian flag and at that same time we see a tendency of increase of reproduction of skilled mariners. The various marine colleges and academies graduate annually more than 1000 mariners who replenish international marine labour market.
Shipowners, employed Ukrainian mariners for service on their ship, could reduce their liability towards the crewmember in the event of their illness, injury or dearth in proportion to the amount recoverable under the social insurance scheme. In turn, it will reduce Club’s costs and expenses paid on crewmembers’ claims.
Until the implementation phase is completed we recommend Members who employ Ukrainian mariners to make the relevant amendments to their employment contract with crewmembers which should stipulate that they will pay a certain compensation in the event of illness, injury or dearth of crewmember reduced in proportion to the amount recoverable under the social insurance scheme, if a crewmember is covered by such a social insurance scheme.
Prepared by A.Nikityuk from Azovlloyd P&I Service Ltd, Ukraine
30/10/2003