Russia funnels nearly half its budget into defence, cutting social spending
Russia’s war budget grows as social spending comes under pressure
Poinews.com – Russia is preparing to devote an unprecedented share of federal spending to defence and security, underscoring the financial strain of sustaining its war against Ukraine into a fifth year.
The 2027–2029 budget proposal directs 44% of federal expenditure towards military and security purposes. That is twice the portion assigned to social programmes and marks the largest such share recorded in Russia’s federal budget.
Lawmakers in the State Duma, the lower chamber of parliament, are scheduled to begin reviewing the draft on 22 October. Significant changes appear improbable: President Vladimir Putin’s United Russia party secured a constitutional majority in September’s parliamentary election.
Military costs exceed earlier plans
The scale of spending reflects the mounting cost of the full-scale invasion launched in February 2022. Military expenditure this year has reached 17 trillion roubles, or €181 billion, well above the 12.1 trillion roubles (€129 billion) initially planned.
For 2027, the national-defence allocation is set to increase by about one-quarter. This section also includes federal payments for service members and their families, meaning some war-related support is accounted for within the rapidly expanding military budget rather than in social policy.
The Finance Ministry identifies the fulfilment of social commitments to citizens as the budget’s leading objective. Yet the planned allocations indicate a different balance of priorities as defence absorbs a larger share of state resources.
Support programmes face a reduction
Social-policy spending is expected to drop by 7% in 2027, declining from 7.1 trillion roubles (€76 billion) to 6.65 trillion roubles (€71 billion). The category covers pensions, veterans’ payments, maternity assistance and other forms of public support.
The government has promised that these payments will be indexed to inflation. Official inflation has remained above 8% for much of the past two years, while independent economists have put the effective rise in consumer costs at a higher level. For households, that gap matters because a nominal increase in benefits may still fail to preserve purchasing power.
Moscow has also announced a three-year “children’s budget” worth 10 trillion roubles (€107 billion), covering maternity payments, benefits for children and housing programmes. Even so, the proposed level is only one-fifth of projected defence spending over the comparable period.
Healthcare is also expected to receive less funding next year. Independent Russian media calculations put the 2027 healthcare budget at 7 trillion roubles (€75 billion), a fall of 6.8%, although the Finance Ministry disputes that assessment.
Regional budgets are being redirected
Federal figures do not capture the entire impact of war spending. Russian regions contribute to recruitment incentives, compensation and other war-linked payments, even though many regional administrations are already operating with budget deficits. In several cases, local authorities have shifted money away from civilian programmes to cover these costs.
In late September, Arkhangelsk region moved more than 63 million roubles from social-support funding to one-off military payments and death compensation. About two-thirds of the reallocated sum had been intended for foster parents, while the remainder was set aside for large families.
Days earlier, Tula region redirected 54 million roubles from services for foster children, low-income households, families raising disabled children, orphan housing repairs and labour veterans. The money was reassigned to payments for service members and compensation for those killed.
St Petersburg has prepared legislation that would trim funding for education, transport repairs and medical projects while raising payments for personnel in the armed forces.
Death compensation falls in many regions
Regional lump-sum death payments, widely referred to informally as “coffin money”, have been cut in parts of Russia since autumn last year. These benefits supplement a federal one-time payment for families of troops killed in action. Regions had sharply increased their own payments in 2022 and 2023 while competing to attract recruits.
The reductions have been steep in some areas. Ulyanovsk region once paid 1 million roubles (€10,700); by February the amount had been halved and was later reduced to 50,000 roubles (€533). In Bashkortostan, an initial payment of 2 million roubles (€21,300) has fallen to no more than 100,000 roubles (€1,100).
Kirov and Omsk regions cut their payments from 1 million to 500,000 roubles (€5,300). Kemerovo reduced its amount from 3 million roubles to 1 million. In Saratov, families who could receive 1 million roubles until late September now receive one-tenth of that sum.
Not every family qualifies for the compensation. Relatives receive no one-time payment when the military records a soldier as missing or as a deserter instead of confirming the person’s death. Some families of those killed have said such classifications are used to deny them compensation.
Fraud cases emerge around compensation schemes
The large sums previously available also created incentives for fraud. In Primorsky Krai, a warrant officer was alleged to have arranged marriages between contract soldiers leaving for the front and local women. The alleged plan involved sharing compensation if the men were killed.
Authorities in Khabarovsk detained six people in February over suspicions of organising similar arrangements. Investigators alleged that notarised powers of attorney were used to gain access to soldiers’ bank accounts, with claimed losses reaching 2.4 million roubles (€25,600).
The budget debate illustrates a broader choice facing Russia’s public finances: the state is committing ever larger sums to military operations and security while pensions, healthcare, family assistance and local civilian services compete for a shrinking share of available money. For regional governments and households, the effect is increasingly visible in the programmes that are delayed, reduced or redirected.
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