Lithuania

THE RIGHT TO SOCIAL SECURITY IN THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

Dr. Vida Petrylaite

 

The fundamental human, social and citizen’s rights were formulated in the Constitution of the Republic of Lithuania adopted by referendum in 25 October 1992. The Constitution is a legal act of supreme legal power. No law or other legal act may be in conflict with it because the Constitution lays down the legal basis for the rest of all Lithuanian legislation and determines the nature of all legal branches, including social security law. Thus, the Constitution provides several legal norms that have great importance to the whole system of further legislation regulating specific social security rights in Lithuania. The constitutional jurisprudence concerning social security is linked with different global and national processes. The economic crisis has also asked to amend or even to reinterpret already existing practice.

This article aims at providing basic principles of social security rights established in the Constitution and their interpretation in constitutional jurisprudence. Some aspects of the constitutional doctrine of social security rights, which were determined by changes in the economy, are also discussed.

 

1. The constitutional guarantees of social security rights

Different provisions of social rights are included in Lithuanian Constitution. This inclusion has a strong historical background. Certain provisions concerning social rights were presented in the Constitutions of 1922, 1928 and 1938.

The Constitution of 1922[1] already contained in itself special chapter No XIII “Social Security”, which established different rights of social security: public health, social welfare for families with children, security in case of old-age, sickness, unemployment and accidents at work. Provisions concerning labour regulation, family matters and education guarantees also were set in this Chapter. The same provisions remained in the text of the Constitution of 1928. 

The Constitution of 1938[2] presented very similar provisions concerning social security rights in the chapter No IX “Social Security”, with the exception of right to social security in case of unemployment. Differently from previous Constitutions, the chapter “Social Security” was devoted only to the guarantees of social security. Provisions concerning labour regulation, family matters and education were set in different specific chapters.  

Together with restoration of independence, further restatement and elaboration of social rights took place in the Constitution of 1992[3]. The Lithuanian Constitution of 1992 provides broader list of guarantees of social rights if comparing to the first Constitutions.  Though, the very composition of the text of the Constitution is different – there is no single chapter which would be devoted to regulation of social rights. Specific rights to social security and related rights are distributed in different chapters of the Constitution.

Article 29 of the Constitution states that all people shall be equal before the law, the court and other state institutions and officers (Chapter II. The Human Being and the State).

Article 38 of the Constitution states that the family shall be the basis of society and the state. Family, motherhood, fatherhood and childhood shall be under the care and protection of the state (Chapter III. Society and the State).

Article 39 of the Constitution states that the state shall take care of families bringing up children at home and shall render them support in the manner established by law. The law shall provide for paid maternity leave before and after childbirth, as well as for favourable working conditions and other privileges (Chapter III. Society and the State).

Article 48 of the Constitution states that every person may freely choose an occupation or business and shall have the right to adequate, safe and healthy working conditions; adequate compensation for work; and social security in the event of unemployment.

Article 52 of the Constitution states that the state shall guarantee the right of citizens to old-age and disability pension as well as to social assistance in the event of unemployment, sickness, widowhood, loss of breadwinner and other cases provided by law.

Article 53 of the Constitution states that the state shall take care of people’s health and shall guarantee medical aid and services in the event of sickness. The procedure for providing medical aid to citizens free of charge at state medical facilities shall be established by law (Chapter IV. National Economy and Labour).

It should be noted, that the provisions of the Constitution without any initial intend, set almost the full list of ‘standard’ social risks provided in international legal acts[4]: medical care – Article 53; sickness benefit – Article 52; unemployment benefit – Article 52 and Article 48; old-age – Article 52; family benefit – Article39; maternity – Article 39; invalidity – Article 52; survivors' benefit - Article 52; with the exception of not mentioning directly employment injury – Article 48.

Upon restoration of the independent state of Lithuania, it became evident that the inherited system of social guarantees did not correspond the relations of market economy. Devising a social protection corresponding changed economic and social living conditions, a model of social protection was chosen according to which state social insurance acquires the main role.

The principles of the relations of state social maintenance are consolidated by the Law on Principles of State Social Maintenance System[5] passed on 23 October 1990 whereby it is established that State Social Maintenance System is the basis of State Social Welfare. The law also provides that along with this system, other public and private systems of social maintenance may exist.

 

2. The scope of the material and personal social security rights guaranteed by the Constitution

Constitutional case law gives an explicit understanding of the meaning of principal constitutional provisions. The jurisprudence of the Constitutional Court established quite a broad understanding of specific social rights mentioned in the Constitution.

           

The social nature of the state

The social nature of the state is very important. Even though there is no such direct notion of the social nature of the state of Lithuania in the Constitution, the Constitutional Court has developed that principle in its jurisprudence. The main constitutional provision allowing recognizing the social state’s conception is set in the article 52 of the constitution.

Article  52  of  the  Constitution stipulates that the State shall  guarantee  the right of citizens to old age and disability pension,  as  well  as  to  social assistance  in  the  event of unemployment, sickness, widowhood, loss of breadwinner, and other cases provided by law. These provisions express social character of the state, while social maintenance, i.e. contribution of the society to maintenance of such its members who are incapable to provide themselves from work or other means or who are not sufficiently provided due to important reasons provided by law, is recognised as having the status of a constitutional value.

This is in line with the contemporary concept of functions of  the  state, as  well  as the constitutional tradition of the Lithuanian State of the 20th century, the origins of which is in  the 1922 Constitution which provided that the state, pursuant to certain laws, shall protect employees in the event of sickness, old age, accident or unemployment.

Alongside, it should be noted that the provisions of Article 52 of the Constitution guaranteeing citizens' right to social maintenance, are in line with the principles of social protection consolidated in international legal acts, too.

The solidarity

Measures of social protection express the idea of public solidarity. They help a person to protect himself from possible social risks. Of course, in a civic society the principle of solidarity does not deny personal responsibility for one's destiny. This is the most important condition of the expression of a free human being. The recognition of mutual responsibility of a person and  the society is important in ensuring social harmony, guaranteeing freedom of a person and possibility to protect oneself  from difficulties  which could not be overcome by  one person alone. Therefore the state creates a system of social maintenance which would   help to maintain living conditions corresponding to personal dignity, and, in case of need, would render a person necessary social help.

 

Forms of social security

As a rule, social maintenance is rendered in 2 forms - social insurance and social assistance - for persons who due to the reasons that do not depend on them are incapable to provide themselves with sufficient means for the living.

The sources of social insurance are associated with the recognition of the right of employees to certain payments, as well as to old age pension. To implement this right social insurance funds are founded which are formed from contributions of employers and employees. As a rule, a certain part of means are allotted to these funds by the state. The contributions of employers and employees are calculated taking account of remuneration for work while sizes of would-be pensions or benefits are associated with the said contributions. This is an essential characteristic of social insurance. In this it differs from social assistance which is rendered to persons who need it but who are not entitled to get maintenance from a social insurance fund, or who get some means from it but they are insufficient for living. The source of social assistance is budgets of either the state or local governments.

 

Importance of social insurance as form of social security

A special place in the relations of social insurance is occupied by the ensured working persons. First, with their work they create material preconditions for social insurance. The main portion of the budget of the Social Insurance Fund is comprised of deductions from calculated remuneration for work. On the other hand, the purpose of social insurance is to provide these persons with finances and services necessary for living if, for reasons established by law, they are unable to subsist on their earned income or other income, or for valid reasons established by law, they have additional expenditures.

Therefore the social insurance system established by legal norms is meaningful only in such a case when it ensures the constitutional right to social maintenance of the aforesaid persons.

It  should be noted that the purpose of the designed social insurance system is  not only to pay social insurance pensions and benefits but, first of all, to collect all  the means provided by the law. 

 

Implementation of constitutional guarantees of social security

Under Article 52 of the Constitution, persons entitled to receive benefits must be indicated in the law. The wording "the State shall guarantee" as employed therein means that the pensions and other social benefits must necessarily be provided for.

               Alongside, Article 52 of the Constitution pre-supposes the fact that the relations pointed out therein must be regulated by laws[6]. It is only the law that may establish the bases on the grounds of which state pensions are granted as well as the sizes of such pensions and conditions of their granting and payment. It is not permitted to establish any conditions  of  appearance of the right to social security benefits of  individuals and to limit the extent of this right by a sub statutory regulation[7].

               In its rulings, the Constitutional Court has held more than once that by sub statutory legal acts (thus, the Government resolutions as well) one may establish solely the procedure of implementation of laws regulating relations of social protection and social assistance. The  sub statutory legal regulation of relations of social protection and social assistance may   comprise the establishment of respective procedures, as well as the legal regulation based on laws, where  the  need  to provide more details about and particularise the  legal  regulation  in sub statutory legal acts is objectively caused  by  the  necessity in the law-making process to lean upon special knowledge and special (professional) competence in a certain area.  However, as the Constitutional Court has held more than once in its rulings, one may not establish any conditions of appearance of person's right to social assistance, nor to restrict the scope of  this  right  by sub statutory legal regulation.

Principle of the right to property 

The Constitutional Court consolidated that social right to receive pension (and other social benefits) has also close link with right to ownership. This position seemingly was influenced by the jurisprudence of the European Court of Human Rights[8].

               A complex analysis of case-law of the Constitutional Court leads to a conclusion that in Lithuania the right to protection of property may be recognised in respect of all social security benefits whether falling within the categories of social insurance or social assistance, or special non-contributory benefits. Attribution of social benefits to the principle of protection of the right to property does not, by itself, contradict solidarity and public character typical of social security. Though the jurisprudence of the Constitutional Court distinguishes pensions (old-age, invalidity, survivor, special state pensions) as more significant object of the property.

               The  inviolability of  property and the protection of the rights of ownership  mean  inter alia that the owner as the possessor of  the rights to property has the right to demand that other persons do not violate his rights, also, it means that the state has a duty to ensure the  protection and safeguarding the rights of ownership.

               In  the  case that the collection of funds necessary to pay pensions and  the  payment  of the pensions themselves are based on social insurance (on social insurance contributions), the human being, to a certain extent, takes part in the creation of the material  preconditions  of payment of these pensions. While establishing the amounts of old age pensions by law, one is to take into consideration the fact as to the amount of contributions that had been paid   when the material preconditions for the payment of these pensions are created.

               Concerning the payment of pension, the Constitutional Court stated, that the person who meets the conditions established by law in order to receive the old age pension, and who has been awarded and paid this pension, has the right to a monetary payment of a respective amount, i.e. the right to possession. This right must be protected and safeguarded.

               Though evaluating different type of social insurance benefits – maternity and paternity benefits, The Constitutional Court held that financial support  rendered during  leave  granted for raising and bringing up children at home (maternity (paternity) benefits),  by  its  nature, temporary (time-limited) character and purpose, differs from the pensions guaranteed in Article 52 of the Constitution, as well as from the other payments of pensionary  maintenance provided for by laws, the right to  which is related to the protection of ownership rights, consolidated in Article 23 of the Constitution.

               The said difference is particularly distinct in the light of the fact that the financial support provided for by law is a targeted one, i.e. it should be linked to a concrete period of raising and bringing up a child at home as well as to such an amount of support that depends on the capabilities of the state and society.

               Thus, the right acquired under law to the financial support of an amount provided for by law during leave granted for raising and bringing up children at home may not be equated with the right to  the  pensions guaranteed in Article 52 of  the Constitution, nor with the right acquired under law to any other pensionary maintenance payment provided for by law, both of which have the aspects of the ownership right according to Article  23 of the Constitution.

Changes in the system

A person who meets the conditions established by the law acquires the right to a pension established by the law. This person may reasonably expect that this right will be protected and defended by the state. When the pension established by the law which is not in conflict with the Constitution is granted and paid, this right and legitimate expectation acquired by the person  are  also to be linked to the protection of the rights of ownership of this person.

               Alongside, it needs to be noted that the constitutional protection of acquired rights and legitimate expectations does not mean that the system of pensionary maintenance established by law may not be reorganised. While reorganising this system, the Constitution must be observed in every case. The system of pensions may be reorganised only by law, only guaranteeing the old age and disability pensions provided for by the Constitution, as well as observing undertaken obligations by the state, which are not in conflict with Constitution, to pay corresponding payments to persons who meet the requirements established by the law. If, while reorganising the pensionary system, the pensions established  by  the  laws which are not directly specified in Article 52 of the Constitution were eliminated, or the legal  regulation of these pensions were amended in essence, the  legislator would  be  obligated  to establish a just mechanism for compensation of the existing losses to the persons who had  been granted and paid such pensions.

               The legislator, while reorganising the system of pensions so that the bases for pensionary  maintenance, persons to whom the pension is granted and  paid, the conditions of granting and payment of pensions, the amounts of pensionary maintenance are changed, must provide for a sufficient transitional time period during which the persons who have a  corresponding job or perform corresponding service which entitles  them to a respective pension under the previous regulation, would  be able to prepare for these changes.

3. The limitation of social rights during an economic crisis

The Constitutional Court jurisprudence has been forming the doctrine on limitation of social rights during an economic crisis. The period of formation of this doctrine could be divided into two stages. First, from 2002 till 2006, when the Constitutional Court was deciding on the constitutionality of legal acts narrowing the social guarantees, when this had been determined by the impact of the effects of the so-called Russian economic crisis on the development of the economy of the State of Lithuania (during this period the Constitutional Court adopted several decisions which began the formation of doctrine on reduction of guarantees of social rights at the time of an economic crisis). Second, since 2009 until now where the Constitutional Court has been forming the constitutional doctrine on limitation of social rights, which has been determined by the effects of the global economic crisis on the economy of the State of the Lithuania[9].

               The main principles of the limitation of social security rights were established by the Constitutional Court with regard to social insurance and state pensions. There might occur such an extreme situation in the state (economic crisis, natural disaster etc.) when there is objective lack funds for the fulfilment of the state functions and satisfying of public interests,   as well as the payment of pensions. According to the Constitutional Court, in such extraordinary cases the legal regulation of pensionary relations may be corrected also by reducing pensions to the extent that it is necessary to ensure vitally important interests of  society  and  protect other constitutional values. The reduced pensions may only be paid on a temporary basis, i.e. only when there is an extraordinary situation in the state. 

               The doctrinal provisions on limitation of social guarantees, which were formulated in the jurisprudence of the Constitutional Court, were subsequently developed upon emergence of the global crisis in 2009. 

               In December 2009 the special Provisional Law on Recalculation and Payment of Social Payments was adopted[10]. By the provisions of the Provisional Law, was intended to ensure payment of the benefits in the period of economic crisis and to create a possibility to at least partially balance the budget of the State Social Insurance Fund. While taking account of the grave economic situation that emerged in the state the recalculation procedure of social insurance benefits as well as social assistance benefits and special state pensions was established. 

               The Law was applied to persons who were receiving the following social payments:

              1) the state pensions awarded and paid under the Republic of Lithuania Law on State Pensions, the Republic of Lithuania Law on the State Pensions of Officials and Servicemen, the Republic of Lithuania Law on the State Pensions of Judges, and the Republic of Lithuania Provisional Law on the State Pensions of Scientists;

              2) the compensatory payments awarded and paid under the Republic of Lithuania Law on Theatres and Concert Establishments;

              3) the annuities awarded and paid under the Law on the State Annuity of the President of the Republic of Lithuania, the Republic of Lithuania Law on the Status of the Signatories of the Act of the Independence of Lithuania and the Republic of Lithuania Law on Physical Education and Sport;

              4) the relief compensations for the persons of working age who are capable of working <...> and target compensations for nursing or attendance (assistance) expenses awarded and paid under the Republic of Lithuania Law on State Relief Payments;

              5) the state social insurance pensions of old-age, early old-age and of lost capacity to work (disability), the state social insurance orphans’ pensions (pensions of loss of the breadwinner) exceeding half of the marginal amount of the state social insurance pension, the state social insurance survivors’ pensions and compensations for special working conditions awarded under the Republic of Lithuania Law on State Social Insurance Pensions  and the Republic of Lithuania Law on the Early Payment of State Social Insurance Old-age Pensions;

              6) the sickness, professional rehabilitation, maternity, paternity, maternity (paternity) social insurance benefits awarded and paid under the Republic of Lithuania Law on Sickness and Maternity Social Insurance;

              7) the sickness social insurance benefits awarded and paid under the Republic of Lithuania Law on Social Insurance of Accidents at Work and Occupational Diseases;

              8) the maternity (paternity) payments awarded and paid for statutory state servants (officials) and servicemen of the national defence system from funds of the state budget under the special legal acts regulating their professional activities;

              9) the child benefit awarded and paid under the Republic of Lithuania Law on State Benefits to Families Raising Children;

              10) the unemployment social insurance payment awarded and paid under the Republic of Lithuania Law on Unemployment Social Insurance.”

              The general principle of such a limitation of social benefits was accepted by the Constitutional Court quite positively, as established by taking into account the economic and financial situation that had emerged in the state. From the intentions of the legislator recorded in the travaux préparatoires it was clear that by means of the said Provisional law it was sought to reduce the expenditures from the state budget and the budget of the State Social Insurance Fund, by establishing, for that purpose, such legal regulation whereby state and social insurance pensions would be reduced alongside with other benefits.

              The Constitutional Court approved several aspects of the said regulation. Firstly, certain marginal (minimal) amount of the pension was established and the pensions not exceeding that amount was not recalculated. That corresponded to the position of The Constitutional Court, that the state and state social insurance pensions not exceeding the marginal amount of pensions may not be reduced even when there is an extremely difficult economic and financial situation in the state.

              Secondly, the Provisional Law established a time-limited validity of provisions of this law, i.e. the fact that the procedure, laid down by this law, for the recalculation and payment of social benefits, inter alia state and state social insurance pensions, which implied the reduction of these payments, was applicable from 1 January 2010 to 31 December 2011.

              Thirdly, in addition, in the Provisional Law the Government was proposed to prepare and approve the inventory schedule of the procedure for the compensation for reduced state social insurance pensions of old-age and of lost capacity to work. According to the Constitutional Court, the Provisional Law must to be construed as meaning that the Government is proposed to prepare and approve the inventory schedule of a such procedure for the compensation for reduced state social insurance pensions of old-age and of lost capacity to work that would include no essential elements of compensation for pensions: grounds, sizes, etc.; these elements of compensation for reduced pensions must be established by means of the law by the legislator; only if understood in this way the said legal regulation is not in conflict with the Constitution.

              Though, not all provisions of the Provisional Law were accepted by the Constitutional Court as corresponding constitutional principles.

              The jurisprudence of the Constitutional Court adopted already from 2000 held more than once that while regulating the pensionary relations, one must heed Article 48 of the Constitution, which enshrines the opportunity of a human being to choose a job and business at his own discretion. Under the Constitution, one may not establish any such legal regulation whereby a person, while implementing one constitutional right, would lose the possibility to implement another constitutional right. Thus, under the Constitution, it is not permitted to establish the legal regulation under which an opportunity for the person who has been awarded and paid an old-age pension, would be restricted, due to this, to freely choose a job and business.

              According to the Provisional Law, pensions for those persons who were engaged in paid employment of self-employment were limited in the greater amount comparing to „non-working” pensioners. This provision was declared by of the Constitutional Court as contradictive to the Constitution. The opinion of the Constitutional Court was strict; the legal regulation under which the person cannot freely choose a job and business due to the fact that upon the implementation of this right he would not be paid the awarded old-age pension or part thereof which was paid until then, also must be considered as a restriction of an opportunity to freely choose a job or business; this provision is to be applied mutatis mutandis to other kinds of pensions, inter alia the state pensions provided for in the law.

 

4. The impact of the constitutional jurisprudence on the legal regulation of the system of social security

 

The Constitutional Court passing the rulings during the periods of crisis has revealed quite a few requirements which stem from the Constitution and which must be heeded while correcting the legal regulation of pensionary maintenance relations in an extremely difficult economic and financial situation in the state. It is obvious that the main interest of the Constitutional Court was regulation of pensions. Though, the same principles, maybe with the more open interpretation must be applied to the whole system of social security.

There might occur such an extreme situation in the state (economic crisis, etc.) when there is objective lack of funds for the payment of pensions and that in such extraordinary cases the legal regulation of pensionary relations may be corrected also by reducing pensions to the extent that it is necessary to ensure vitally important interests of society and protect other constitutional values. The reduced pensions may only be paid on a temporary basis.

In itself the occurrence of an especially grave economic and financial situation (due to an economic crisis) in the state does not presuppose the right of the legislator to correct the legal regulation of pensionary relations—to reduce the awarded and paid pensions; when there is an especially grave economic and financial situation, the state must take all possible measures in order to overcome the economic crisis and to secure the accumulation of the funds necessary for payment of pensions; only in an exceptional case, when it is impossible to accumulate (one does not succeed in accumulating) the amount of the funds necessary to pay the pensions after all internal and external opportunities have been used, the pensionary legal regulation may be corrected by reducing the pensions.

The principle of proportionality implies that the reduction of awarded and paid pensions must be in line with the legitimate objectives which are important to society, such reduction must be necessary to reach the said objectives and may not restrict the rights and freedoms of a person clearly more than necessary in order to reach these objectives.

The peculiarities of state pensions, which, in their nature and character are different from old-age pensions, as well as from disability pensions, imply that the legislator may correct the legal regulation of such pensions of different nature by reducing these pensions to greater extent than old-age and disability pensions; however, while doing so, the proportions of the amounts of state pensions established prior to the occurrence of the particularly grave economic and financial situation in the state may not be violated.

The constitutional imperatives of a state under the rule of law, justice, proportionality, equality of rights, as well as social solidarity inter alia mean that the burden of the economic and financial crisis should be evenly and proportionately shared among the entire society.

Under the Constitution, it is not allowed to establish any such legal regulation whereby the pension becomes reduced to an amount, where the person receiving the pension would not be secured the minimal socially acceptable needs and the living conditions compatible with human dignity; the pension which secures only minimal socially acceptable needs and the living conditions compatible with human dignity to the person who receives the pension, may not be reduced at all.

It should be noted that the basis of the jurisprudence of the Constitutional Court were also motivated by the international legal provisions. According to the Constitutional Court, even though each state itself establishes the concrete means whereby the social rights of a human being are implemented, inter alia the right to social security, when using this competence, the state must comply with the obligations and means for coordination of the national social security systems which are entrenched in the international legal acts.    

References:

Ruling of the Constitutional Court

 

Ruling of 12 March 1997 on State Social Insurance Pensions;

Ruling of 10 February 2000 on Granting State Pensions;

Ruling of 30 October 2001 on State Pensions to Officials and Soldiers of the Systems of Internal Affairs, State Security, Defence and Prosecutor's Office;

Ruling of 25 November 2002 on State Social Insurance Pensions;

Ruling of 4 July 2003 on State Pensions of Officials and Servicemen;

Ruling of 3 December 2003 on the Law on State Social Insurance Pensions and the Law on State Pensions;

Ruling of 7 February 2005 on Social Insurance Indemnities for Occupational Diseases;

Ruling of 20 April 2010 on the Construction of the Provisions of the Acts of the Constitutional Court Related to Reduction of Pensions and Remunerations during an Economic Crisis;

Ruling of 29 June 2010 on State pensions to Judges;

Ruling of 6 February 2012 on the Recalculation and Payment of Pensions upon Occurrence of an Especially Difficult Economic and Financial Situation in the State;

Ruling of 5 March 2013 on the Reduction of awarded maternity (paternity) benefits and payments.