Pl. ÚS 30/23
The Constitutional Court today rejected a motion by a group of deputies who sought to have the Court annul provisions related to the extraordinary indexation of pensions. Therefore, the legal regulation remains in force.
The petitioner argued before the Constitutional Court that, due to the challenged legal regulation for extraordinary pension increases, the standard mechanism, which was anticipated by the relevant laws at the time the conditions for pension indexation were met in June 2023, was not used. Instead, a one-time different mechanism was employed, leading to a lower indexation. The reasons considered for the unconstitutionality of the legal regulation included the misuse of the state of legislative emergency, repeated violations of the procedural rules during the consideration of the draft act, and the impermissible retroactive effect, which resulted in the violation of the legitimate expectations of pension recipients.
The Plenum of the Constitutional Court (Justice Rapporteur Vojtěch Šimíček) did not grant the motion to repeal the contested legislation.
The Constitutional Court examined the process of adopting the challenged regulation and found that the declaration of a state of legislative emergency was not unconstitutional. This state can only be declared under extraordinary circumstances that pose a real and immediate threat. However, such circumstances may not only include natural disasters, epidemics, wars, etc., but also “shock” disruptions to the economic or financial situation of the state, as was the case here. Significant economic damage also constitutes a major deterioration in the state of public finances, which the State cannot address with regular means, such as budget cuts or using reserves.
The limitation of parliamentary discussion on the draft act proposed by the petitioner also withstood scrutiny. It was proven that the opposition had an adequate opportunity to express its views on the draft act. The parliamentary opposition has a certain right to delay or block decisions made by the majority to achieve its political goals. However, the abuse of these rights should not prevent the effective exercise of power by the governing majority. Therefore, the Constitutional Court does not provide protection to the political minority where it uses its rights for purposes other than those for which they were incorporated into the procedural rules.
Furthermore, by reducing the indexation of pensions, the legislature did not commit impermissible retroactivity of the law. The reduction in extraordinary indexation was made before the legal claim of pension recipients arose. Designating the month from which the subsequently determined extraordinary increase in pensions is derived does not yet constitute the creation of a legal claim for its payment. This claim arises only upon the due date of a specific benefit (in this case, not until June 2023).
The Constitutional Court acknowledged that the challenged legal regulation affected the legitimate expectations of pension recipients. However, the legislature amended the legal regulation before the pension recipients acquired a subjective public law claim to the payment of a higher monthly pension amount [Act No 71/2023 Sb. was approved in the Chamber of Deputies on 4 March 2023, and in the Senate on 8 March 2023; the President signed it on 16 March 2023, and it became effective upon its publication in the Collection of Laws on 20 March 2023, whereas both the original and the new claim (would) have arisen only in June 2023]. Therefore, this legitimate expectation of pension recipients was relatively short and ended no later than 20 March 2023, when Act No 71/2023 Sb. became valid.
The challenged statutory provisions did not lead to a nominal reduction in the already granted pensions, nor to their freezing, as happened to other categories of income-earning individuals during the same period. They led “only” to an extraordinary indexation of pensions at a lower than previously anticipated amount.
The Constitutional Court also stated that there is no fundamental right to permanent increases in pensions or increases mirroring inflation. The essence of the fundamental right to adequate material security in old age is a guarantee of a dignified life. This means a fair and adequate pension, not its ongoing automatic increase. The increase itself falls within the competence of the legislature, which should adopt such legal solutions that reflect the outcome of specific policies and also take into account the current state of public finances. From the Constitutional Court’s perspective, it is crucial that the implementation of pension policy does not lead to the emptying of the very essence of the fundamental right to adequate provision in old age. However, this did not happen in this case.
The Constitutional Court is acutely aware of the difficult situation currently faced by pension recipients as vulnerable individuals. It recognises the specific living costs of pensioners and the intense impact of inflation on them. At the same time, it cannot overlook that, due to past repeated pension increases (four times in 2022 alone), inflation impacts them somewhat less intensely than some other groups. Nor can it overlook the perspective of intergenerational solidarity, i.e., the solidarity of current pension recipients with future generations, whose contributions currently finance the pension system. There is, therefore, a common interest in ensuring that the pension insurance system as a whole is balanced, fair, and sustainable not only currently but also in the future.
The stability and balance of the State budget and public finances are not just a political interest but a legal obligation of State authorities. Stable and balanced public finances are particularly in the interest of the socially weaker and vulnerable individuals, as these groups are most dependent on assistance from the State budget.
The Constitutional Court’s task is not to find specific solutions for consolidating public finances or reducing the pension account deficit. It is the legislature who must come up with a systemic and comprehensive solution to the pension issue. The Constitutional Court decided only in this specific case, finding no violation of the constitutional order.
Justices Jan Svatoň, Pavel Šámal, and Josef Fiala issued dissenting opinions on the judgment.