When Russia's parliament convenes later this month to review the draft federal budget for 2027–2029, it will consider a spending plan that cements the country's shift toward a war economy. The proposal, set for its first reading in the State Duma on 22 October, earmarks a record 44% of federal expenditure for defence and security—double the share allocated to social programmes. This marks the fifth consecutive year of full-scale war in Ukraine, and the Kremlin shows no sign of reining in military outlays.
President Vladimir Putin's United Russia party secured an absolute constitutional majority in September's parliamentary elections, making significant amendments to the draft unlikely before it passes. The budget reflects the escalating cost of the invasion launched in February 2022: military spending this year has already reached 17 trillion roubles (€181 billion), against an originally budgeted 12.1 trillion (€129 billion).
Social spending falls despite official promises
The Finance Ministry's draft lists "fulfilling social obligations to citizens" as its top priority, but the numbers tell a different story. Social policy spending is set to decline by 7% in 2027, from 7.1 trillion roubles (€76 billion) to 6.65 trillion (€71 billion), covering pensions, veteran payments, maternity benefits, and other support. The government has pledged to index these payments against inflation, but 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. Yet 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.
Regions cut civilian budgets to fund war
The federal budget is not the only source of pressure on social spending. Russia's regions partly fund war-related payments, and many 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. These regional decisions reflect a broader pattern: as the war drags on, the burden is being shifted onto the most vulnerable.
'Coffin money' slashed
Regional lump-sum death payments—known informally as "coffin money"—have been cut across Russia since autumn of last year. These 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. Now, the tide has turned. In the 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 have also 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 takes a back seat
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, and the programme to build and repair outpatient clinics in the regions has been halved.
The prioritisation of defence over social welfare is not just a domestic issue. It has implications for European security, as Poland and other EU members push for a more robust defence posture. Meanwhile, NATO has warned of escalating hybrid attacks from Russia, and strikes on Ukraine's energy grid continue despite diplomatic efforts. The Kremlin's budget choices signal a long-term commitment to military confrontation, even as the human and economic costs mount at home.
