227Over the past eight years, Ukraine has seen a significant aggravation of social problems, resulting from a continuous decline in output. However, the current problems should not be attributed to the economic and financial crisis alone. Structural flaws of the social sector have aggravated the pain. A country’s economy is an integrated organism, and its viability depends on whether it assures proper living standards for citizens. Given the scarcity of financial resources, the government is not likely to be able to offer Ukrainian citizens a satisfactory level of social protection, especially to the poorest population groups. If living standards are to increase, the country’s economy must be successful. This article will focus on the structure of social expenditures.