Russia directs record 44% of federal budget to defence in 2027 plan

Russia’s parliament will examine the 2027–2029 draft budget starting on 22 October, with the draft allocating a record 44% of federal spending to defence and security and reducing the share for social programmes.

The Finance Ministry’s draft lists “fulfilling social obligations to citizens” as a top priority, yet social policy spending is set to fall by 7% in 2027 from 7.1 trillion roubles to 6.65 trillion roubles, covering pensions, payments to veterans, maternity benefits and other support. The government has pledged to index these payments against inflation.

Military expenditure this year reached 17 trillion roubles against the 12.1 trillion roubles originally budgeted, reflecting the escalating cost of the full-scale invasion launched in February 2022. The draft shows federal payments to servicemen and their families recorded under the national defence section, with that spending rising by roughly a quarter next year. The proposed 44% defence and security share is the highest on record.

The Kremlin has announced a 10 trillion rouble “children’s budget” over the next three years, covering maternity payments, child benefits and housing programmes, a ratio of one to five compared with defence spending.

Regional budgets are also being affected as regions redirect funds to war-related payments. The Arkhangelsk region redirected more than 63 million roubles originally earmarked for social support to one-off war payments and death compensation. 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 to increase servicemen’s pay and compensation for the dead. In St Petersburg authorities prepared a bill reducing spending on education, transport repairs and medical projects while increasing payments to servicemen.

Regional lump-sum death payments, known informally as “coffin money”, have been cut across Russia since autumn of last year. Examples include Ulyanovsk region halving a 1 million rouble payment and later cutting it to 50,000 roubles, Bashkortostan reducing an initial 2 million rouble payment to no more than 100,000 roubles, Kirov and Omsk halving payments from 1 million to 500,000 roubles, Kemerovo cutting from 3 million to 1 million, and Saratov reducing previously 1 million rouble payments to a tenth in late September.

There have been allegations of fraud linked to these payments. In Primorsky Krai a warrant officer was alleged to have arranged marriages between contract soldiers and local women with compensation shared if men were killed. In Khabarovsk authorities detained six people on suspicion of arranging similar schemes using notarised powers of attorney to access soldiers’ bank accounts, with alleged damages reaching 2.4 million roubles. Some families receive nothing when soldiers are classified by the military as missing or deserters rather than confirmed dead, rendering them ineligible for the one-time payment.

Healthcare spending is set to fall to 7 trillion roubles in 2027, a 6.8% reduction according to independent Russian media calculations, though the Finance Ministry disputes that figure. Over the three-year period, healthcare would receive 28.6 trillion roubles against 50 trillion roubles for the military. Funding cuts include more than a quarter reduction for ambulance services, halving of the programme to build and repair outpatient clinics in the regions, and the national cancer programme receiving 3.9 billion roubles in 2027 down from 44.9 billion this year.

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The draft budget’s allocation of 44% to defence and security signals a fiscal prioritisation of military spending over social welfare and healthcare in the 2027 planning period. Reductions in social policy spending and regional reallocation of funds to war-related payments indicate growing pressure on civilian programmes at both federal and local levels. Cuts to regional lump-sum death payments and reported fraud around compensation schemes highlight strains in the system supporting servicemen’s families. The divergence between the announced children’s budget and the scale of defence expenditure underscores a significant imbalance in resource distribution across government priorities.

Hızlı Bakış: Bilmeniz Gerekenler

• The 2027 draft budget allocates a record 44% of federal spending to defence and security.
• Social policy spending is projected to fall 7% in 2027 to 6.65 trillion roubles.
• Military expenditure this year reached 17 trillion roubles versus an original budget of 12.1 trillion roubles.
• The Kremlin announced a 10 trillion rouble children’s budget for the next three years, a one to five ratio against defence spending.
• Regions have redirected social funds to war-related payments, with specific cuts in Arkhangelsk, Tula and St Petersburg.
• Regional lump-sum death payments have been sharply reduced in multiple regions and allegations of fraud have emerged.
• Healthcare spending is reported to fall to 7 trillion roubles in 2027, with major programmatic cuts including ambulance services and the national cancer programme.