Russia funnels nearly half its budget into defence, cutting social spending

Russia's parliament will vote later this month on a budget that allocates a record 44% of federal spending to defence and security — double the share for social programmes — as the Kremlin presses ahead with a fifth year of all-out war in Ukraine.

The State Duma, Russia's lower house of parliament, is due to begin examining the 2027–2029 draft on 22 October.

President Vladimir Putin's United Russia party won an absolute constitutional majority in September's parliamentary elections, making major amendments unlikely before it passes.

Military expenditure this year has reached 17 trillion roubles (€181 billion) against the 12.1 trillion (€129 billion) originally budgeted, showing the escalating cost of the full-scale invasion Russia launched against Ukraine in February 2022. Defence and security's 44% share of the 2027 budget is the highest on record.

The Finance Ministry's draft lists "fulfilling social obligations to citizens" as its top priority. The figures tell a different story. Social policy spending will fall 7% in 2027, from 7.1 trillion roubles (€76 billion) to 6.65 trillion (€71 billion), covering pensions, payments to veterans, maternity benefits and other support.

The government has pledged to index these payments against inflation. Russia's official inflation rate has exceeded 8% for much of the past two years, and independent economists put the real figure higher.

The Kremlin has announced a 10 trillion rouble (€107 billion) "children's budget" over the next three years, covering maternity payments, child benefits, and housing programmes. The ratio of those funds to defence spending is one to five.

Federal payments to servicemen and their families fall under the "national defence" section, whose spending will rise by roughly a quarter next year.

War at the expense of orphans and the poor

The federal budget is not the only source of pressure on social spending. Russia's regions partly fund war-related payments, many of which are already running deficits, forcing local authorities to cut civilian budgets.

In late September the Arkhangelsk region redirected more than 63 million roubles originally earmarked for social support — two-thirds from payments to foster parents, the rest from support for large families — to one-off war payments and death compensation.

A few days earlier the Tula region cut 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 sum to servicemen's pay and compensation for the dead.

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

'Coffin money' being cut

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

The payments are regional supplements to the federal one-time compensation paid to families of troops killed in action, and regions sharply raised them in 2022–2023 as they competed to attract recruits.

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

In Bashkortostan, the initial 2 million roubles (€21,300) payment 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 went down from 3 million to 1 million. In Saratov, families who received 1 million roubles until late September now receive a tenth of that.

The sums 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 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) against 50 trillion roubles (€533 billion) for the military.

Funding for ambulance services has been cut by more than a quarter. 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.