Administrative Law – lifelong monthly allowances attributed to former political officeholders
Legislator’s discretionary power;
Principle of proportionality;
Principle of the protection of trust (legal certainty).
RULING Nº 3/16
13 of January of 2016
The Constitutional Court declared the unconstitutionality with generally binding force of norms in the 2014 State Budget Law (LOE2014) regarding lifelong monthly allowances attributed to ex-political officeholders. The grounds for the Court’s decision were that the norms were in violation of the principle of the protection of trust (legal certainty). The new regime subjected payment of these allowances to rules designed for benefits that are intended to respond to cases of hardship, where one of the logical conditions is that the recipient be subjected to a means test.
Application of these rules to lifelong allowances ran contrary to the latter’s inherent nature. Requiring the beneficiary and the other members of his/her household to account for their other incomes and causing these to affect the lifelong monthly allowance meant depriving the latter of the nature of a benefit that is awarded to former political officeholders in return for their services to the country and in the light of the special demands placed on such public servants and the potential consequences holding political office may have for their life paths. The allowances instead took on the nature of a common non-contributory payment designed, like other types of benefit, to prevent recipients from experiencing economic hardship. The Court considered that although the legislator is not obliged to rigidly maintain past choices, and could legitimately continue to revise and strengthen the applicable regime such as to make it more restrictive, it was necessary to gauge whether the new legislative solution was appropriate in the light of the requirements imposed by the Constitution – i.e. whether the reasons for changing the law were proportionate in relation to the sacrifice imposed on the persons affected by the amendments.
The Court said that legislation evolves and dominant social ideas change with time. In the present case this meant there was no basis for saying beneficiaries were entitled to expect the previous regime to be perpetuated ad infinitum. However, it was legitimate for them to trust that any legislative amendment would maintain the essential nature of the original allowance – a trust that was deserving of protection.
This abstract ex post facto review case was brought before the Constitutional Court by a group of Members of the Assembly of the Republic. They challenged norms in the State Budget Law for 2014 (LOE2014) that changed the regime governing lifelong monthly allowances for former political officeholders. This regime was originally created in 1985, was itself amended five times (the last in 2005), and was then modified by successive Budget Laws. These changes gradually tightened the conditions for the award of the allowances and reduced their amount, but retained their unusual nature. The allowances were intended to dignify people who committed themselves to working in politics, by creating the conditions needed for them do that work in a stable way. They were lifelong, monthly, non-contributory benefits payable to everyone who exercised certain functions or political offices for a certain period of time. The idea was to reward the beneficiary’s commitment to the res publica, compensate him/her for the sacrifice derived from the expectable future loss of professional opportunities, and protect him/her from future uncertainties that might undermine his/her living conditions. Their lifelong monthly nature differentiated these allowances from any other non-contributory benefit, because the purpose of all the others is to ensure that people enjoy minimally dignified living conditions. The beneficiaries’ trust (certainty) was based precisely on the circumstance that the legislator never questioned this unusual nature, which allowed them to expect that if the state ever did modify or even restrict these allowances, it would create a transitional regime for existing recipients which respected the allowances’ specific nature.
The Court’s position was that the legislative solution before it was also capable of generating a dependent relationship on the part of ex-political officeholder vis-à-vis the members of his/her household with incomes of their own, and that in doing so it created uncertainties as to whether the beneficiary would be able to maintain a dignified material situation. The Court considered that the first requisite for the applicability of constitutional protection based on the principle of the protection of trust (legal certainty) was fulfilled, not so much because of what the legislator did – it had already amended various aspects of the legal regime governing these allowances in the past – but because of what it didn’t do. By never changing the nature of the allowances, even when it did away with them for the future, the state fuelled the beneficiaries’ expectations that that nature would continue to characterise the allowances for as long as they were due. The Constitutional Court’s jurisprudence is that the second requisite if trust is to warrant protection is that the expectations which have been created are legitimate and based on reasons which are judged to be good in terms of the constitutional-law axiological framework. In this respect the Court said that it is the Constitution itself which requires the ordinary legislator to determine the rights, benefits and immunities of political officeholders, thereby legitimating the latter’s expectations. Turning to the third requisite – that the citizen in question must have oriented his/her life and made decisive choices on the basis of expectations that a given legal regime would be maintained – the Court recalled that this was exactly why the allowances were established in the first place: to create room for individuals to feel free to embrace the public cause, because they felt reassured about their future.
The Court then weighed up the opposing value: that of the public interest underlying the legislator’s decision to pass the norms in question – i.e. the need to adopt budgetary consolidation measures and reduce and rationalise public spending. It said it was possible to argue that the public-interest objectives (linked to the savings the public purse would make as a result of the difference in the amount of the allowances payable if those incomes were taken into account) pursued by the norms that subjected payment of the allowances to a means test – i.e. to conditions in terms of the recipient and his/her household’s other incomes – suggested that the normative solution before it was excessive, compared to the consequences the norms produced in the legal sphere of former political officeholders. This was particularly true of the way in which the norm downgraded the personal nature of the benefit in favour of a means-related status, which was unacceptable because that personal quality was an essential characteristic of the benefit’s Constitutional-Law status.
The Ruling was the object of five dissenting and one concurring opinion. The concurring Justice agreed with the Court’s decision, but disagreed with the grounds given by the rest of the majority.
See Rulings nos. 128/09 (12-03-2009); 353/12 (05-07-2012); and 413/14 (30-05-2014).