The Constitutional Court found no 10 / 2010 Coll.
The Constitutional Court's finding of 1 December 2009 on the application for annulment of part of the provision of point 2 of Article XXIX of Part-twenty-ninth Act No 237 / 2004 Coll., amending certain laws and taking certain other measures and amending Act No 353 / 2003 Coll., on excise duties, as amended by Act No 479 / 2003 Coll., and Act No 338 / 1992 Coll., on property tax, as amended
Valid
10
FIND
The Constitutional Court
On behalf of the Republic
The Constitutional Court decided on 1 December 2009 in plenary in the composition of Stanislav Balík, František Duchoň, Vojen Güttler, Pavel Holländer, Ivana Janů, Vladimir Krůk, Dagmar Lastovecká, Jan Musil, Jiří Nykodým, Pavel Rychetský, Miloslav Excellent and Michaela Židlická on the proposal of the Supreme Administrative Court pursuant to Article 95 (2) of the Constitution of the Czech Republic to abolish part of the provisions of point 2 of Article XXIX of Act No. 237 / 2004 Coll., and Act No. 338 / 1992 Coll.
as follows:
Motion denied.
Reasons
1. In accordance with Article 95 (2) of the Constitution of the Czech Republic (hereinafter referred to as "the Constitution"), the appellant requested that the Constitutional Court of Inconsistencies with Articles 1 and 30 of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as "the Charter") repeal part of the provisions of point 2 of Article XXIX of Part-twenty-ninth Act No. 237 / 2004 Coll., which, in the context of the adoption of the Act on Value Added Tax, amends certain laws and adopts certain further measures and amends Act No. 353 / 2003 Coll., on Consumer Taxes, as amended by Act No. 479 / 2003 Coll., and Act No. 338 / 1992 Coll., on Real Estate Tax, as amended by the laws, "in Czech Pension Insurance." The appellant did so in the context of the appeal proceedings against the judgment of the Regional Court in České Budějovice of 2 February 2005 No. 2 Cad 144 / 2004-18, which rejected the action of PhDr. V. K. (Note: from 20 April 2004 a citizen of the Czech Republic) against the decision of the Czech Social Security Administration, which rejected the applicant's request to grant a one-off contribution of CZK 1,000 to a pensioner under Article XXIX of Act No. 237 / 2004 Coll.
2. The substance of the case is that, under Act No. 237 / 2004 Coll., amending certain laws in connection with the adoption of the Act on Value Added Tax and adopting certain other measures and amending Act No. 353 / 2003 Coll., on Excise Taxes, as amended by Act No. 479 / 2003 Coll., and Act No. 338 / 1992 Coll., on Real Estate Tax, as amended, a provision entitled "one-off pension allowance ', the purpose of which was to provide the State with a one-off assistance to pensioners in connection with changes in the amount of value added tax, was adopted in Part Twenty-ninth Article XXIX. According to the legislation adopted, a pensioner's contribution (amounting to CZK 1,000) is entitled to a pension (part of the pension) from Czech pension insurance for at least part of June 2004. In the event that the Supreme Administrative Court submitted the above proposal to the Constitutional Court, a person who did not receive a pension from Czech pension insurance but from Slovak pension insurance was entitled to a one-off contribution.
3. Proposer - The Supreme Administrative Court - said that in the present proceedings, it decides on the right to a single pension, that is to say, the right to physical protection in the old age, which falls within the broader framework of the right to physical security under Article 30 (1) of the Charter of Fundamental Rights and Freedoms. While the appellant realises that, by its nature, it is social law, where the understanding of the principle of equality is somewhat broader than that of fundamental rights and freedoms, he still considers that the contested part of that provision does not pass the constitutional test.
4. In fact, the appellant considered that, if the reason for granting a single contribution to a pensioner was a change in the amount of value added tax, the addressee of that one-off assistance was the person living in the territory of the State who accepted the changes in the amount of value added tax by law. In particular, pensioners living on the territory of the Czech Republic must be entitled to a pension (part of the pension) from Czech pension insurance or from foreign, e.g. Slovak pension insurance. Otherwise, in the appellant's view, legislation is brought into conflict with Regulation No 1408 / 1971 EEC, which is intended to prevent a citizen who is permanently resident in an EU Member State from being excluded from the benefits of the other residents of that Member State only because he is a beneficiary of a pension paid by the other Member State. He also took the view that, in the present case, Article 17 of the Treaty between the Czech Republic and the Slovak Republic on social security (No 228 / 1993 Coll.) and Article 11 of the Law on the implementation of the Treaty between the Czech Republic and the Slovak Republic on social security (Communication of the Ministry of Foreign Affairs No. 117 / 2002 Coll. p.) was also infringed, since the public social benefit within the meaning of Article 17 of the Treaty is, for its purpose, also the compensation in question from 2004. The fact that a group of pensioners who live permanently on the territory of the Czech Republic but are not entitled to a pension from Czech pension insurance is denied by the law to a one-off contribution, the appellant considers an inequality that lacks objective and reasonable reasons.
5. The appellant concluded that, in the present case, a positive intervention by the legislator would be necessary to eliminate the unjustified inequality between pensioners living in the Czech Republic; First, however, the contested provision of a discriminatory nature must be removed from the law. Therefore, it proposed that the Constitutional Court repeal the provision cited in the contested part.
6. The Constitutional Court requested comments from the Chamber of Deputies and the Senate of the Parliament of the Czech Republic on the submitted proposal.
A.
7. The Chamber of Deputies of the Parliament of the Czech Republic states in its observations that Law No 237 / 2004 Coll. was adopted in connection with the adoption of a new law on value added tax. As a result of changes in the amount of value added tax, measures were taken, on a proposal from the Committee on Budgets, to compensate for VAT-based changes to families with children receiving child allowances and pensioners. Social compensation, in the law entitled "one-off pension allowance," was paid from the state budget. The legislature has provided that all citizens who are, in particular in terms of their age or under other circumstances, no longer employed or only limited and who are still contributing or who have contributed to the State budget in the past in the form of social security contributions should be included in the list of beneficiaries. At the same time, the other criterion was that the beneficiaries fulfilled the legal conditions for the pension pension. It follows that, among the beneficiaries of the contribution, which represented one-off benefits and not recurring benefits having the character of pension benefits, those citizens who, although being a low-income group, did not fulfil the conditions for the payment of pensions, or those citizens or, respectively, the citizens of the Czech Republic who were physically provided with pension benefits, but from the foreign pension scheme to which they contributed, but not from the Czech pension scheme to which they did not participate for a period of time to meet the conditions for the provision of pensions.
8. The Chamber of Deputies added that the legislator entrusted the payment of the contribution to the social security authorities, mainly on the grounds that they have in their records the recipient (s) of the pension, so that it was not necessary to build a new and one-off record of the beneficiaries of the contribution only for the one-off payment of that contribution and in view of the economy. The fact that the legislator entrusted the payment of the contribution to the social security authorities does not mean that the contribution was part of the social security benefits. It is therefore wrong to invoke the Interstate Treaty between the Czech Republic and the Slovak Republic on social security (published under No 228 / 1993 Coll.), since this Treaty does not apply to that contribution.
9. The Chamber of Deputies therefore considers that the view of the appellant - the Supreme Administrative Court - of a one-off compensation contribution to a pensioner as a national social benefit within the meaning of the Treaty between the Czech Republic and the Slovak Republic on social security and the Law on the implementation of the Treaty and its reference to infringement of Regulation No 1408 / 1971 EEC and Articles 1 and 30 of the Charter of Fundamental Rights and Freedoms is incorrect; His proposal is therefore unfounded.
10. The Chamber of Deputies finally stated that it voted on Law No 237 / 2004 Coll. at its 27th meeting on 27 February 2004. The law was passed because of the 163 Members present, 83 and 66 voted against. The Chamber of Deputies voted on the law returned by the President of the Republic at its 30th meeting on 22 April 2004. Of the 184 Members present, 131 and 51 were opposed. In this state of affairs, the Chamber of Deputies says that the legislature has acted in the belief that the law adopted is in line with the Constitution, the constitutional order and our rule of law. It is for the Constitutional Court to examine the constitutionality of the contested provision.
B.
11. The Senate of the Parliament of the Czech Republic stated in its observations that the bill, part of which is proposed for annulment, was submitted by the Government to the Chamber of Deputies on 5 November 2003 and was delivered to the Senate on 12 March 2004 after its approval in the Chamber of Deputies. In the Senate, the bill as Senate Press No. 305 was discussed in two committees, namely the Committee on Economic, Agriculture and Transport and the Committee on European Integration. The Committee on Economic Affairs, Agriculture and Transport, as a guarantee committee in its resolution, recommended the Senate to return the draft law to the Chamber of Deputies with amendments adopted by the Committee (the amendments did not concern the part of the twenty-ninth to which the proposal of the Supreme Administrative Court is directed). The Committee on European Integration then recommended that the Senate adopt a resolution on the draft law not to deal with it if the Senate approved the draft law on value added tax. The Senate debated the draft law at its 14th meeting on 1 April 2004 and, after a statement by the representative of the petitioner and rapporteurs of the two committees, adopted a resolution not to deal with the draft law. This resolution, for which out of the 73 Senators present voted 39 and against 23 Senators, was adopted after the Senate approved the draft Value Added Tax Act when discussing the previous item.
12. The Senate further stated that the draft law submitted by the Government to the Chamber of Deputies did not include an amendment concerning the one-off pension contribution to which the proposal of the Supreme Administrative Court is directed. This amendment was only added to the draft law in the form of an amendment when it was discussed in the Chamber of Deputies, together with some other adjustments to address certain social compensation in connection with changes in the amount of value added tax. Therefore, no reasoned report was submitted for these amendments to clarify the proposed adjustment. In the general position, the proposed adjustment was only mentioned in the debate when the draft law on value added tax (i.e. other than the press to which it should have been added) was discussed and the content of several speeches showed that it was an amendment initiated by the outcome of the negotiations of the parties to the then Government Coalition in Kolodys on 1 February 2004. It follows from the available data concerning this negotiation that the parties to the coalition of governments agree that, in the context of the second phase of the reform of public finances, they will jointly enforce at government and parliamentary level certain measures, including two measures relating to the matter in question; the measure was implemented under points 6 and 8 of the following wording:
13.6. The following measures will be taken to mitigate the effects of harmonisation and other changes in VAT: (a) as from 1 May 2004, the parental allowance will be increased by CZK 1,000 per month, (b) as of 1 June 2004, a one-off child allowance of CZK 2,000 per child to families who qualify for child allowance, (c) as of 1 June 2004, a one-off special pension of CZK 1,000 per pensioner (including pensions for widows, orphans and disabled persons) will be paid. 8. The tax changes made will be taken into account in the indexation of pensions in 2005.
14. The Senate added that, in this sense, the arrangements for pensioners were also presented as a one-off compensatory measure for the remainder of 2004, with the fact that during the year pensions could not be averaged and that the consequences of changes in VAT would be addressed for pensioners in the context of the indexation of pensions for further periods. According to the Senate, it is quite clear that if tax changes for the period following 2004 were dealt with in the framework of the indexation of pensions (and this was certainly the case, since the increase in pensions is made in view of the increase in consumer prices and the increase in VAT affects their growth), then this subsequent compensation concerned only pension recipients receiving a pension from the Czech pension scheme, as was the case with a single pension scheme. In the light of the above, it can be concluded that the compensation for pensioners has been taken from the outset not as a State social benefit outside the pension scheme but as a cash benefit within the framework of the pension benefits provided, which is in the nature of an increase in pensions (whether in the form of a one-off benefit or an increase in periodic benefits); to this end, it would be useful - in the opinion of the Senate - to assess the merits of the proposal. In fact, it can be disputed that, in cases where the Czech Republic intends to compensate certain economic effects of tax adjustments for certain groups of citizens, such as pensioners, it cannot only tie the corresponding compensation to cases where the pensioner is a Czech pensioner. It is quite clear that such compensation is accepted in view of the amount of pensions provided under the legislation in force in the Czech Republic, and this is precisely what is taken into account when deciding on the compensation and its amount. As regards pensioners living on the territory of the Czech Republic who receive pensions provided under the regulations of another State, the amount of their pensions depends, of course, on the legislation of the competent State concerning the conditions of entitlement to the pension and its amount. In many cases, pension recipients from abroad have pensions that are several times higher than the average rate of pensions in the Czech Republic, and in many cases their pension is lower. From this point of view, it can be considered that, when the compensation is accepted in view of the amount of pensions provided under the legislation in force in the Czech Republic, such an approach is based on objective and reasonable grounds, and is an adjustment that meets the constitutional principle of equality.
15. The Senate further concluded, on the grounds of the non-compliance with Regulation No 1408 / 1971 EEC, that, if the adjustment is considered to be a cash benefit provided under pension benefits which are in the nature of an increase in pension provision (indexation of pensions), this is hardly a contradiction with that Regulation; This is because Article 11 states that "the rules on indexation laid down by the legislation of a Member State shall apply to benefits belonging to them, taking account of the provisions of this Regulation '.
16. The Senate continued and objected to the contravention of Article 17 of the Treaty between the Czech Republic and the Slovak Republic on social security and Article 11 The legal arrangement has stated that it is an international agreement which has not been applied since the Czech Republic joined the European Union, as is apparent from Article 6 of Regulation No 1408 / 1971 EEC. Within the meaning of Article 7 (2) (c) of the Regulation, that Treaty applies only to Article 20 (concerning the period of security obtained before the division of the CSFR), which is listed in Annex III to the Regulation as a provision of the Convention on Social Security, which remains in force regardless of Article 6 of the Regulation. From this point of view, the appellant's argument that the measure in question is contrary to the Treaty is somewhat misleading.
17. The Senate concluded that it was up to the Constitutional Court to examine the constitutionality of the contested part of Article XXIX of Part 22 of Law No 237 / 2004 Coll. by proposing the contested part of the provision of the Act, and to decide, in case of compliance with the submitted proposal, at what date the contested part of the provision of the Act is repealed, as this would require appropriate amendments to be made in other provisions of Article XXIX of Law No 237 / 2004 Coll.
C.
18. The Constitutional Court also requested the opinions of the Ministry of Labour and Social Affairs and of the Ministry of Finance (§ 49 (1) of Act No. 182 / 1993 Coll., on the Constitutional Court).
19. The Ministry of Labour and Social Affairs stated, first of all, that part of the twenty-ninth (one-off pension contribution) was added to the Act in the Chamber of Deputies, following a resolution of the Committee of Budgets (Resolution 339 of the 25th meeting of the Committee of Budgets of 11 February 2004), and that part of the Act was therefore not accompanied by a reasoned report. The basis (i.e. the paragraph text) for this resolution was prepared by the Ministry of Labour and Social Affairs, including a one-off contribution to the child (part twenty-eighth of Act No. 237 / 2004 Coll.).
20. On the substance of the case, the Ministry stated that Council Regulation (EEC) No 1408 / 71 (hereinafter referred to as "the Regulation ') defines the term" benefits' and "pensions' in Article 1 (t). The contribution under Act No 237 / 2004 Coll. clearly has the character of the benefit referred to in this provision, as it constitutes a form of indexation of pension (in the present case one-off payment), and therefore it is necessary to treat this contribution according to the principles contained in this Regulation as a pension (i.e., for example, the contribution must also be paid abroad). However, it is for each State to determine how its pensions will be constructed and what indexation (including forms of indexation) of pensions will be carried out. The Regulation does not provide anywhere that adjustments made to own pensions (including indexation) must be made to foreign pensions if the recipients of a foreign pension live in the territory of the state (here in the Czech Republic). Article 3 of the Regulation lays down the principle of equality of treatment which provides that persons established in the territories of Member States subject to the provisions of the Regulation shall be subject to the same obligations and benefit from the same advantages under the legislation of a Member State as nationals of that State; in accordance with this principle is therefore the adjustment of the contribution in Act No. 237 / 2004 Coll., which is not linked to residence or nationality but to another condition, i.e. the payment of pension from Czech pension insurance. The Czech Republic has therefore not infringed EU law (i.e. that Regulation) unless it has granted a contribution to foreign pensions. The legality of the view that the contribution must be treated as a pension and that the contribution (as a form of indexation) does not belong to foreign pensions, but must be provided for all own pensions (i.e. also to pensions paid abroad, if resident abroad), is evidenced by the Ministry and by the fact that the Slovak Republic - after a long period of time and after consultation with the EU institutions - has recognised its obligation to pay a similar Slovak contribution under EU law (under national law limited to recipients of Slovak pensions with permanent residence in the Slovak Republic) as well as to Slovak pensions paid abroad (i.e. also to the Czech Republic). The dispute with the quoted regulation is therefore not in the opinion of the Ministry of Labour and Social Affairs.
21. The Ministry - on Article 17 of the Treaty between the Czech Republic and the Slovak Republic on social security (hereinafter referred to as "the Treaty") - stated that the contract covers state social benefits. However, Article XXIX of Law No 237 / 2004 Coll. does not imply that the contribution is a State social benefit, i.e. benefits paid from a separate system, as foreseen in Article 2 (1) of the Treaty. On the contrary, it follows from the Regulation (see above) that, given its conditions, the contribution is a pension scheme. It added that Act No. 237 / 2004 Coll. came into force on the date of entry into force of the Treaty of Accession of the Czech Republic to the EU (i.e. 1 May 2004); on that date, the contract was replaced by Community law (i.e. also by a regulation, as expressly stated in Article 6, with the exceptions set out in Annex III to the Regulation, possibly in Annex 5 to Regulation No 574 / 72, with Article 17 not included in those Annexes / exemptions). This means that since the Czech Republic's accession to the EU, the Treaty (including Article 17) has not been applicable since it was replaced by a regulation and could therefore not be contrary to the Treaty in June 2004.
22. The Ministry - on the allegation of a breach of the principle of equality and of the absence of objective and reasonable reasons for the condition of receiving pensions from Czech pension insurance - declared that the purpose of Act No 237 / 2004 Coll. was, inter alia, to compensate for the cost of living in the context of changes in the amount of value added tax or to facilitate (mitigate) the transition to a one-off price increase due to a new rate of value added tax, in the form of a one-off provision of a fixed amount of money, i.e. a contribution. This contribution was not intended (particularly for high financial and technical demands) for all populations (as was the time when its introduction of the State Compensation allowance), but only for certain groups of persons who do not normally have income from their own gainful activities are linked to social benefits and are thus most affected by the rise in prices. The legislature therefore granted a contribution to offset the price increases for uninsured children (Article XXVIII of Act No. 237 / 2004 Coll., i.e. on the condition of the payment of a child allowance under the Act on State Social Support, i.e. children receiving this benefit from the Czech system, which is set at a certain income situation of the family), and also to pensioners of pensions from the Czech pension insurance, i.e. pensions that are linked to a previous professional activity in the Czech Republic and which are validated according to the development of income and prices in the Czech Republic (note: contribution, as mentioned above, is not flat and is not linked, for example, to age or other facts). Pensions are generally the result of past economic activity in a given state and are further responding to the current income and price level of that State. The level of income of persons who are beneficiaries of pensions from other countries should, first and foremost, be guaranteed by the State in whose pension system they have contributed in the past and from which they are now drawing. The indexation of pensions (including increases by a fixed amount) is set according to the evolution of income and prices in the State which pays the pension and never (and this is true in all countries) is taken into account in the development of income and prices in the State where the pension is paid (i.e. there is no differentiated indexation according to the State of residence of the pensioner; income paid abroad is thus increased even if income or prices do not rise abroad); if the indexation had to be carried out even in the light of this development in the State of residence of the recipient of the pension paid by another State, there would have been double indexation and technical difficulties as the State of residence of the pensioner did not pay a foreign pension, and in particular there is no legal or factual reason.
23. The Ministry added that the existence of the contribution and its amount were designed with the knowledge of the average income of persons to whom a Czech pension is paid; the level of income of persons receiving a pension from a foreign state did not deal with the legislator or could not deal with it (in addition, the pensions of those persons are in some cases several times higher than the average Czech pensions). Persons who have not been associated with the Czech pension scheme and have not paid taxes or contributions to the Czech social insurance scheme should therefore not be entitled to the allowance simply because they are paid a pension from the foreign pension scheme which is not linked in any way to the tax or insurance contributions to the state budget of the Czech Republic. Pensions are always subject to the legal regime of that State, including the indexation of pensions, i.e. they do not increase or on the contrary they do not limit pensions paid by another State. The purpose of the contribution and the fact that the foreign pension is not linked in any way to the previous or current level of income and prices in the Czech Republic are therefore reasons for the existence of the above-mentioned condition for receiving pension from Czech pension insurance.
24. The Ministry continued and stated that the entire construction of the contribution in Article XXIX of Act No. 237 / 2004 Coll. is therefore linked to the payment of pension from Czech pension insurance and the deletion of the words in question would become Article XXIX of Act No. 237 / 2004 Coll. essentially inapplicable. For example, according to Article XXIX (5), the social security body responsible for the payment of the allowance was responsible for the payment of the pension in June 2004; if the pension is not paid from the Czech pension insurance, the determination of the payer of the allowance would be missing. In addition, if the condition for the payment of the pension from the Czech pension insurance were to lapse, the number of beneficiaries would become very vague (there is no condition, for example, permanent residence in the Czech Republic, which would be problematic in relation to EU countries and contract states), which would mean legal uncertainty. In view of Article XXIX (8) (entitlement to payment of the contribution expired on 30 June 2005), the deletion of the words in question from Act No 237 / 2004 Coll. would also create an inequality between persons who have brought an action in a timely manner (and who would have been helped by the deletion of the words in question) and the proceedings have not yet ended, and persons who have not brought an action and who have therefore ceased to be entitled to a contribution under these provisions.
25. Finally, the Ministry pointed out the appellant's view that, in this case, a positive intervention by the legislator is needed to eliminate the unjustified inequality between pensioners living in the Czech Republic. In this respect, given the time gap, the original purpose of the contribution has already expired (the purpose of the contribution was to help cope with price increases due to changes in value added tax in 2004). Implement the amendment of Act No. 237 / 2004 Coll. at the earliest with effect in 2008, changing the retroactive range of beneficiaries and addressing technical issues (e.g. determining the payee's contribution in the case of foreign pensions and the payout technique in relation to Article XXIX point 6 of Act No. 237 / 2004 Coll.) as well as the claim issues under Article XXIX point 8 of Act No. 237 / 2004 Coll. would no longer be relevant, taking into account the purpose and amount of the contribution (CZK 1 000); In addition, the condition referred to in point 2 of Article XXVIII should be assessed by analogy in this situation in order not to create inequality in the child's contribution and the pensioner's contribution). The Ministry of Labour and Social Affairs therefore considers this amendment to be unrealistic and proposes that the Constitutional Court reject the appellant's proposal - the Supreme Administrative Court -.
D.
26. The Ministry of Finance stated in its brief comments on the proposal that the provision in question may be discriminatory; Considers, however, that it is necessary to take account of the fact that it is already "consumed" (according to Article XXIX (8) of the Act under examination, the right to pay the pension allowance to a pensioner on 30 June 2005) and the possible abolition of the words "from Czech pension insurance" would not solve anything. However, the Ministry stressed that any change that would mean extending the pension entitlement to pensioners not only from Slovak, but also from other pension schemes in the Czech Republic would mean increasing expenditure from the state budget, which is unacceptable for the Ministry of Finance in view of the need to stabilise public budgets. The Ministry of Finance therefore does not agree with the appellant's proposal.
27. The Constitutional Court first examined, in accordance with Article 68 (2) of the Law on the Constitutional Court, whether the law in respect of which the appellant contests the unconstitutionality of part of its provisions was adopted and issued within the limits of the Constitution laid down by competence and by a constitutional procedure. It found (inter alia, from the observations of the Chamber of Deputies and the Senate of the Parliament of the Czech Republic, as well as from the relevant Parliament's press, shorthand reports, resolutions and data on the course of the vote of the two chambers) that the contested law was adopted and issued by the Constitution in the prescribed manner and within the limits of the Constitution provided for in the provisions of Article 39 (1) and (2) of the Constitution. The Act was published on 23 April 2004 in the Collection of Laws in the amount of 78 under the number 237 / 2004 Coll.
28. However, the Constitutional Court found, on the other hand, that the contested legislation was added to the draft law in the form of an amendment only when discussing Act No 237 / 2004 Coll. in the Chamber of Deputies. Having regard to the principles set out in the decision of the Constitutional Court in Case 77 / 06 Pl. However, the Constitutional Court has applied here a proportionality test in relation to further constitutional order protected principles, in particular the principle of legitimate trust of citizens in law, legal certainty and the principle of acquired law. In this context, it also concluded that it was an ad hoc legislation already consumed. Therefore, he did not proceed to the annulment of the contested part of the Act for that formal reason.
29. Point 2 of Article XXIX of Part twenty-ninth Act No. 237 / 2004 Coll., amending certain laws in the context of the adoption of the Law on Value Added Tax and adopting certain other measures and amending Act No. 353 / 2003 Coll., on Consumer Taxes, as amended by Act No. 479 / 2003 Coll., and Act No. 338 / 1992 Coll., on Real Estate Tax, as amended, reads (the proposal for the contested part of the Act No. 353 / 2003 Coll.): The right to the pension contribution of the pensioner shall be exercised by a natural person who is entitled to the pension (part of the pension) from Czech pension insurance ("pension") for at least part of June 2004. If the pensioner is entitled to more than one pension in that month, the pension allowance shall be payable only once.
30. The Constitutional Court considers that the application is not justified.
31. The task of the Constitutional Court was, in particular, to assess whether the contested legislation is not capable of violating the principle of equality in rights, generally expressed in Article 1 of the Charter of Fundamental Rights and Freedoms, according to which people are free and equal in dignity (as laid down in Article 3 of the Charter in paragraph 1) and whether, in the context of those articles, there is no discrimination affecting the right to adequate material protection in the old age referred to in Article 30 (1) of the Charter.
32. The Constitutional Court already in a number of its decisions (e.g. in the sp. zn. Pl. ÚS 33 / 96, Collection of finds and orders of the Constitutional Court, Volume 8, Found No 67, p. 163 et seq., published under No. 185 / 1997 Coll.) further interpreted the content of the constitutional principle of equality. First of all, it should be reiterated that it was in agreement with the understanding of equality, as already stated by the Constitutional Court of the CSFR in its finding of 8 October 1992 sp. zn. But even here, he must not go any further... If the law determines the benefit of one group and thereby imposes disproportionate obligations on another, it may do so only by referring to public values. 'The Constitutional Court thus rejected the absolute understanding of the principle of equality and considered equality as a relative category, which in particular requires the elimination of unjustified differences and the exclusion of arbitrarily. The content of the principle of equality has thus shifted into the area of constitutional acceptance of the aspects of the distinction between entities and law. Therefore, the distinction in access to certain rights must not be an expression of pleasure, but it does not imply that everyone should be granted any right (cf. Moreover, Article 1 of the Charter of Fundamental Rights and Freedoms cannot be interpreted in isolation from other general Articles 2 to 4 of the Charter, but on the contrary, it must be considered as a single whole. It is clear from the adaptation of this general provision that even the basic protected values listed in Article 3 of the Charter did not propose the constitution as absolute. In case sp. zn. Pl. ÚS 4 / 95 (Collection of finds and orders of the Constitutional Court, Volume 3, Found No 29, p. 209 et seq., published under No. 168 / 1995 Coll.) The Constitutional Court noted, inter alia, that inequality in social relations, if it is to affect fundamental human rights, must achieve an intensity challenging, at least in a certain way, to the very essence of equality. This is usually the case when a breach of equality is also linked to another fundamental right.
33. As also stated by the Constitutional Court in the find sp. zn. Equality is not a fixed category, as it undergoes development, which is particularly marked in the area of political and social rights. Also, international human rights instruments and many decisions of international control bodies are based on the fact that not every unequal treatment of different entities can be classified as a breach of the principle of equality, i.e. as unlawful discrimination against one entity compared to other entities. In order for a breach to occur, several conditions must be met; in particular, the situation that different entities in the same or comparable situations are treated differently without objective and reasonable grounds for different approaches being applied. It can be added here - as is apparent from the above finding - that the European Court of Human Rights, in its established case-law, states mutatis mutandis that the difference in treatment between persons in comparable or comparable situations is discriminatory if it has no objective and reasonable justification, i.e. if it does not pursue a legitimate objective or if the resources used are not proportionate to the objective pursued. The United Nations Committee on Human Rights, in applying Article 26 of the International Covenant on Civil and Political Rights, has also repeatedly expressed the view that the exclusion of arbitrarily lies in the fact that discrimination cannot be applied beyond reasonable and objective criteria.
34. However, the legislator has some scope to consider whether preferential treatment in the area of social rights will take place. In doing so, it must ensure that the favourable approach is based on the abovementioned objective and reasonable grounds (legitimate objective of the legislator) and that there is a relationship of proportionality between that objective and the means of achieving it (legal advantage). In the area of civil and political rights and freedoms, which immanently characterises the obligation of the State to refrain from intervening in them, there is only a minimal scope for preferential treatment of certain entities in general. On the other hand, in the area of economic, social, cultural and minority rights in which the State is obliged to take active action - because it is intended to remove certain aspects of the inequality between different groups of companies which are intrinsically socially, culturally, professionally or otherwise stratified - the legislator logically has much greater scope to apply its view of the permissible limits of the actual inequality within it (cf.
35. In the light of the above-mentioned fundamental principles and the conclusions previously adopted by the Constitutional Court, the Constitutional Court has therefore assessed whether the contested legislation is an unjustified manifestation of a state's desire, or whether it is a legitimate pursuit of a legitimate preferential approach and not an unconstitutional distinction between the parties concerned, which is not based on objective and reasonable grounds and considerations. In particular, the exclusion of libel is that any privilege or discrimination cannot be exercised beyond reasonable and objective criteria. While the postulate of equality does not, as has already been stated above, imply a requirement for general equality between all and all, it implies a requirement that the law does not, without justification, favour or disadvantage one before the others.
36. Meritum of the case consists, as detailed above, in the rules according to which (in the sense of the passage in question of Act No 237 / 2004 Coll.), the purpose was, inter alia, to compensate for the increase in cost of living in relation to changes in the amount of value added tax, or to facilitate the transition to a single price increase due to a new rate of value added tax, in the form of a one-off grant of a fixed amount of money, i.e. a contribution. This contribution was not meant to be a flat-rate contribution for all residents of the Czech Republic, but only for certain groups of persons who, as a rule, no longer have income from their own gainful activities and may be most affected by the rise in prices. The legislator therefore admitted it to the pensioners from Czech pension insurance.
37. In view of the evidence collected on the case and the observations of the relevant authorities concerned (cf. above), the Constitutional Court also agrees that the one-off compensation for pensioners in question was taken from the outset not as a social benefit outside the pension scheme, but as - albeit somewhat non-standard - performance within the framework of the Czech pension insurance benefits provided (note: the contribution had therefore to be paid abroad), thus taking into account the amount of pensions provided under the legislation in force in the Czech Republic; it could not relate to the recipients of foreign pensions living in the Czech Republic. This approach could be considered as a one-off quasi indexisation of pension. Logically and by definition, the same applies, as the Ministry of Labour and Social Affairs pointed out, that its amount was designed with the knowledge of the average income of persons to whom a Czech pension is paid; the level of income of persons receiving a pension from a foreign state, often with a level significantly different from that of the Czech Republic, was not addressed by the legislator or could not deal with it.
38. In that procedure, no unjustified discrimination can be found by the legislator, according to the opinion of the Constitutional Court; It is indeed and undoubtedly for each State to determine which indexation of pensions responding to the current income and price level of a particular State will be implemented. The procedure chosen may be considered legitimate and implemented in a manner appropriate to its purpose. Ad absurdum, in the event of compliance with the proposal, i.e. in the case of the granting of this one-off compensation to citizens of Slovak (and other foreign) pensions living in the Czech Republic, on the contrary, other groups of persons could legitimately feel discriminated against, and not just pensioners, unless a flat-rate solution was adopted.
39. In view of this, the appellant's alleged non-compliance with the contested legislation with Article 17 of the Treaty between the Czech Republic and the Slovak Republic on social security will not stand up because the contract concerned only the area of state social benefits, but that contribution had, as explained above, the character of pension payments. It is also necessary to agree with the views of the Senate of the Parliament of the Czech Republic and of the Ministry of Labour and Social Affairs, which in their observations pointed out, inter alia, that this is an international agreement which has not been applied since the Czech Republic joined the European Union, as is apparent from Article 6 of Regulation No 1408 / 1971 EEC. As regards the appellant's objections regarding the non-compliance of the legislation with this Regulation, it is sufficient to reiterate that that Regulation does not provide anywhere that the arrangements applied to own pensions (including indexation) must also be applied to foreign pensions if the beneficiaries of the foreign pension reside in the territory of that particular State. It is in accordance with the principle of equal treatment as set out in this Regulation if the adjustment of the contribution in Act No. 237 / 2004 Coll. is not linked to residence or nationality, but to another condition, i.e. the payment of pension from Czech pension insurance. After all, it cannot be overlooked that European Union law is not the reference criterion for assessing the constitutionality of laws and other legislation for the Constitutional Court.
40. The Constitutional Court also points out that the amount of the sum in question, namely CZK 1 000 (approx. 40 Euro), plus one-off payments, can hardly create, as far as individuals are concerned, an inequality so unfounded that it could affect the constitutional plane, even if it is not a negligible amount in relation to the state budget. The efficient management of the funds intended to pay pensions at the level laid down by law can certainly be regarded as a public interest.
41. Therefore, the Constitutional Court rejected the proposal.
42. The Constitutional Court concluded that further clarification of the case could not be expected from oral proceedings and therefore, with the consent of the parties, abandoned it.
President of the Constitutional Court:
JUDr. Rychetský v. r.
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Regulation Information
| Citation | The Constitutional Court found No 10 / 2010 Coll., on the application for annulment of part of the provision of point 2 of Article XXIX of Part 29 of Act No 237 / 2004 Coll., amending certain laws and taking certain further measures in connection with the adoption of the Act on Value Added Tax and amending Act No 353 / 2003 Coll., on Consumer Taxes, as amended by Act No 479 / 2003 Coll. |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 14.01.2010 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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