Reducing pensions in a time of financial crisis does not violate the right to property protection

JUDGMENT

Mockienė v. Lithuania 27-07-2017 (no. 75916/13)

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SUMMARY

The applicant was an officer and received a retirement pension after her retirement from the Prison Division in January 2004. On 1 January 2010, a provisional law came into force which cut and reduced various social care benefits, including pensions, during the economic crisis. The Constitutional Court ruled that the reduction in service provision pensions during the economic crisis and the absence of compensation for their reduction were in line with the Constitution.

The ECtHR held that there was no indication that Mrs Mockienė had too much burden and that there was a tragic change in her quality of life due to the financial crisis which Lithuania was facing as a result of the global financial crisis.

It was therefore decided that her application under Article 1 of the First Protocol and on the basis of the principles of equality had to be rejected as inadmissible.

PROVISIONS

Article 1 of the First Additional Protocol

Article 14

PRINCIPAL FACTS

The applicant, Danutė Mockienė, is a Lithuanian national who was born in 1959 and lives in Mažeikiai.

Ms Mockienė was a law enforcement officer and received a service pension after her discharge from the Prisons Department in January 2004. Such a service pension is paid to individuals for their merits or service to the State; it is not linked to social insurance contributions. On 1 January 2010 a provisional law entered into force which reduced various welfare benefits, including service pensions, for the duration of the economic crisis. As a result, from 1 January 2010 until 31 December 2013 Ms Mockienė’s service pension was reduced by approximately 15%. The law did not entitle her to compensation for the reduction during that period.

The Constitutional Court adopted several rulings in 2012 and 2015 in which it held that the reduction of service pensions during the economic crisis and the absence of compensation for their reduction complied with the Constitution.

In the meantime, Ms Mockienė brought a claim against the State before the domestic courts requesting that her pension be returned to its pre-2010 level and that she be compensated for the period of reduced payments, without success.

THE DECISION OF THE COURT 

Article 1 Protocol 1 (protection of property)

The Court considered that Article 1 of Protocol 1 was applicable in Ms Mockienė’s case as she had had a legitimate expectation that she would continue to receive the payment of her service pension upon her discharge from the Prisons Department. Furthermore, the temporary reduction in her pension had amounted to an interference with her right to peaceful enjoyment of her possessions guaranteed under Article 1 of Protocol No. 1, which had been expressly provided for by law under the new legislation introduced in 2010. That interference had been designed to decrease State expenses during the economic crisis, stabilise the increase in the budget deficit and ensure the State’s ability to provide protection to the most vulnerable groups. Consequently, the Court was satisfied that the temporary reduction of service pensions and other welfare benefits had sought a legitimate aim in the public interest.

Moreover, the Court saw no grounds to find that the authorities had failed to strike a fair balance between Ms Mockienė’s fundamental rights and the general interest of the community. The reduction in her pension had been limited, not only in quantitative terms but also in time. In particular, her pension had been reduced to approximately 210 Euros, which was higher than the minimum set in the new legislation, and this had lasted for no longer than four years. The reduction in her service pension had not therefore placed Ms Mockienė at risk of having insufficient means to live on. Finally, the reduction in the service pension was part of a wider programme of austerity measures, affecting many other kinds of welfare benefit and civil servants’ salaries.
In conclusion, there was no indication that Ms Mockienė had had to bear an individual and excessive burden at a time of serious economic difficulties faced by Lithuania during the global financial crisis.

For this reason, it was decided that her complaint under Article 1 of Protocol 1 should be rejected as inadmissible.

Article 14 (prohibition of discrimination) taken in conjunction with Article 1 of Protocol 1

The Court recalled that discrimination, in the context of Article 14 of the Convention, meant treating persons differently who were in analogous or relevantly similar situations, without an objective and reasonable justification. In the present case, Ms Mockienė alleged that she had been treated differently from people who had received other types of welfare benefit – in particular, she complained that a compensation mechanism had been provided for reduced retirement pensions but not for reduced service pensions. However, the Court was not convinced that these groups (namely, the recipients of retirement pensions and recipients of service pensions) were in sufficiently analogous situations. In particular, it was noted that the State was under a constitutional obligation to provide individuals with retirement pensions which are awarded on the basis of need or vulnerability and are linked to social insurance contributions. On the other hand, service pensions were discretionary, awarded on the basis of service in State institutions or merit, and depended on the State’s financial resources. Those two groups of beneficiaries were not therefore comparable for the purposes of Article 14, meaning that any difference in treatment between the two could not amount to discrimination. It followed that the complaint under Article 14 also had to be rejected as inadmissible(echrcaselaw.com editing).


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