Further transition of Ukraine to market economy, having aggravated social problems, placed in the center of public and political attention the modernization of social protection of the population. The European experience proves that normal functioning of the parallel market and the system of social protection is necessary and in a way charge of the society, businesses, employers for social peace. Modern social protection systems tend to satisfy specific needs of certain groups of the population that are modified in time and space. However, material prosperity is not a goal per se but only a prerequisite for the creation of social wellbeing, that is such conditions of life in which a person feels good, can physically and mentally develop. The state in its nature is intended to ensure general order in the interests of all social strata, not just the ruling elite. Its chosen policy should play an integrating role in achieving social harmony in the society. The policy can only be effective when it takes into account the objective historical development, the principles of social development, the human right for life and adequate livelihoods. Accordingly, a social welfare state is a democratic state which provides social security through the implementation of active social policy, which is a part of the internal policy of the state embodied in effective social programs, conducts legal regulation of social relations in the interests of all vulnerable social groups, on the basis of principles of equity, social partnership and solidarity.