Russians will not be able to save on housing and communal services: what will the abolition of commissions mean?

Expert Krokhin: “A lot of noise, little exhaust and the threat of increasing bank tariffs”

The Ministry of Labor promised to exempt several categories of Russians from penalties and commissions when paying for housing and communal services. The list of beneficiaries includes parents with many children, pensioners, disabled people, veterans, as well as family members of deceased disabled people and participants in the Great Patriotic War and combat veterans. The corresponding changes will take effect from July 1, 2024. Now banks have the right to charge a commission when transferring money for utilities in the amount of 0.5-2% of each payment. Will this type of support allow beneficiaries to save money? For an answer, MK turned to Konstantin Krokhin, a member of the Housing and Communal Services Committee of the Chamber of Commerce and Industry of the Russian Federation.

– Can this support measure be considered effective for the population?

– The benefit was announced in December 2023. President Vladimir Putin then said that the commission charged by financial institutions when paying for utilities would be abolished for pensioners. This happened during his Direct Line and was regarded as a promise that would certainly be fulfilled. Now other categories of citizens have been added to pensioners. But the fact is that directly paying the commission is not too large for family budgets. Roughly speaking, this is 0.5-2% of the payment amount. In addition, even without a decision from the authorities, many banks today already provide this service to customers without additional fees. There are also reliable government portals that allow you to pay for utilities without commission. The benefit itself, which was initially presented as important, in fact is not so. It is small-scale and difficult to administer.

-And how will such a benefit be provided in practice?

– I don’t know how such benefits will be confirmed. Moreover, we are talking about different categories of citizens, and this is a different set of documents. You will probably have to receive some kind of confirmation on the State Services website. In turn, banks will have to re-adjust their work processes. The Association of Russian Banks has already stated that setting up software and other costs will cause increased costs. It turns out that commissions will increase, but for other items, and this is counterproductive. Lots of noise, little exhaust and the threat of increasing bank service rates.

-The Ministry of Labor also proposes to exempt parents of large families, pensioners, disabled people, as well as military veterans and members of their families from penalties. In this case, who will pay off this debt?

-If the state takes a penalty from the providers of public services (resource providers, homeowners’ associations, management companies), then it must compensate for the shortfall. Simply saying that no penalty is charged to beneficiaries is not enough. Otherwise, there will be either bankruptcy of management companies or “underrepairs.” There is no talk of compensation now. That is, citizens will still suffer.

– Can management companies include the missing amount in the tariff?

– No. Utility tariffs are regulated by regional authorities. If the authorities prohibit the management company from charging penalties for a certain group, then the companies’ ability to fulfill their obligations in full will automatically decrease.

– If we talk about compensation to management companies, how much money might be needed?

– According to my estimate, preferential categories of citizens account for about 15% of the total volume of payments. The total market in Moscow, for example, together with utilities is 950 billion – 1 trillion rubles. If we take 15% of payers (approximately 150 billion payments) and cancel the penalty (which is about 9% per annum), then we get approximately 1.2 billion rubles per month or 13.5 billion rubles per year. This is the price of the issue only for the capital.

– What measures, in your opinion, can simplify the utility burden for beneficiaries?

– Of course, some social groups of the population need support. I would recommend that the Ministry of Construction, the Ministry of Labor, the Ministry of Finance and all those who coordinate benefits pay attention to one really effective measure. It is necessary to equalize the benefits of large families with the benefits of veterans and disabled people. Today, the current benefit is a 50 percent discount on housing and communal services. It applies to veterans, pensioners and disabled people according to their place of registration and social norm. Meanwhile, the discount for large families is only 30%. If we talk about real support for the population in the year of the family, then the housing and communal services benefit should be equalized to 50% for all these groups. The benefit works because the missing money for management companies and other providers of public utility services is compensated by the state from the budget.