Russia Allocates Record 44% of Budget to Defence as Social Spending Takes Hit

Russia’s parliament is set to vote later this month on a budget earmarking a record 44% of federal expenditure to defence and security — twice the allocation for social programmes — as the Kremlin continues a fifth year of full-scale war in Ukraine.

The State Duma, the lower house of parliament, is scheduled to begin reviewing the 2027–2029 draft on 22 October. President Vladimir Putin’s United Russia party secured an absolute constitutional majority in September’s parliamentary elections, making significant amendments unlikely before the measure passes.

Military spending this year has already reached 17 trillion roubles (€181 billion), surpassing the originally budgeted 12.1 trillion (€129 billion), highlighting the escalating cost of the full-scale invasion launched in February 2022. The 44% share for defence and security in the 2027 budget represents the highest proportion on record.

While the Finance Ministry’s draft cites “fulfilling social obligations to citizens” as its top priority, the figures suggest otherwise. Social policy spending is projected to decline by 7% in 2027, dropping from 7.1 trillion roubles (€76 billion) to 6.65 trillion (€71 billion), encompassing pensions, veteran payments, maternity benefits, and other support measures.

The government has committed to indexing these payments against inflation. Russia’s official inflation rate has remained above 8% for much of the past two years, with independent economists arguing the true figure is higher.

The Kremlin has announced a 10 trillion rouble (€107 billion) “children’s budget” over the coming three years, covering maternity payments, child benefits, and housing programmes. This amount stands in a one-to-five ratio against defence spending.

Payments to servicemen and their families are classified under the “national defence” section, where spending is set to rise by roughly a quarter next year.

War at the expense of orphans and the poor

Pressure on social spending extends beyond the federal budget. Since Russia’s regions partially fund war-related payments, many of which are already running deficits, local authorities have been forced to trim civilian budgets.

In late September, the Arkhangelsk region diverted more than 63 million roubles originally designated for social support — two-thirds from foster parent payments and the remainder from assistance for large families — towards one-off war payments and death compensation.

Days earlier, the Tula region slashed 54 million roubles from spending on foster children, low-income households, families with disabled children, housing repairs for orphans, and support for labour veterans, redirecting the funds to servicemen’s pay and compensation for the deceased.

In St Petersburg, authorities have prepared a bill to reduce spending on education, transport repairs, and medical projects while increasing payments to military personnel.

‘Coffin money’ being cut

Regional lump-sum death payments — informally known as “coffin money” — have been reduced across Russia since autumn of last year.

These payments serve as regional supplements to the federal one-time compensation for families of troops killed in action, and regions sharply increased them in 2022–2023 as they competed to attract recruits.

In the Ulyanovsk region, the payment stood at 1 million roubles (€10,700). By February, it had been halved, and then cut again to 50,000 roubles (€533).

In Bashkortostan, the initial payment of 2 million roubles (€21,300) has fallen to no more than 100,000 (€1,100).

Kirov and Omsk regions have halved payments from 1 million to 500,000 roubles (€5,300). In Kemerovo, the payment dropped from 3 million to 1 million. In Saratov, families who received 1 million roubles until late September now receive a tenth of that amount.

These sums have attracted fraud. In Primorsky Krai, a warrant officer was alleged to have arranged marriages between contract soldiers heading to the front and local women, with the compensation shared among participants if the men were killed.

In Khabarovsk, authorities detained six people in February on suspicion of orchestrating similar arrangements, using notarised powers of attorney to access soldiers’ bank accounts, with alleged damages reaching 2.4 million roubles (€25,600).

Some families receive nothing at all. Soldiers classified by the military as missing or as deserters rather than confirmed dead are ineligible for the one-time payment. Relatives of those killed say the designation is often used to withhold compensation.

Healthcare insignificant

Healthcare spending will fall to 7 trillion roubles (€75 billion) next year, a 6.8% reduction according to calculations by independent Russian media, though the Finance Ministry disputes the figure.

Over the three-year period, healthcare will receive 28.6 trillion roubles (€305 billion) compared with 50 trillion roubles (€533 billion) for the military.

Funding for ambulance services has been cut by more than a quarter, and the programme to build and repair outpatient clinics in the regions has been halved.

The national cancer programme will receive 3.9 billion roubles in 2027, down from 44.9 billion this year.

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