Constitutional Court petition concerning the Act on the termination of early retirement pension, on allowances paid before reaching the old age pension age limit, and on service allowance

Press release:

Constitutional Court petition concerning the Act on the termination of early retirement pension, on allowances paid before reaching the old age pension age limit, and on service allowance  

According to the Commissioner for Fundamental Rights certain provisions of the Act on the termination of early retirement pension (paid before reaching the old age pension age limit), on allowances paid before reaching the old age pension age limit, and on service allowance are contrary to the principle of the rule of law, to the right to the protection of personal data, as well as to the right to social security. Taking into account the submissions of nearly 30 individuals and of two civil society organisations, Máté Szabó has initiated with the Constitutional Court the ex post review of the compliance of the Act with the Basic Law.

The Act in question entered into force on 1 January 2012 and terminated early retirement pensions. Allowances established earlier are continued to be paid under another legal title, as so-called early retirement allowances, for example as transitional miners' allowance, or in the case of the armed forces as service allowance.

The monthly amount of certain allowances (e.g. early retirement allowance to Members of Parliament, or service allowance) has to be reduced by the amount of personal income tax. However, the relevant provisions of the Act are contrary to the requirement of the rule of law, since as a way of public burden sharing they effect a deduction from the nominal amount of old age pensions.

In the Ombudsman's opinion the Act is arbitrary in stipulating the suspension of the payment of service allowance as an automatic legal consequence similar to accessory penalties. It follows from the Basic Law that the State may not use the instruments of criminal law in an arbitrary way; therefore Máté Szabó has proposed that this provision be annulled.

A new provision of the Act provides that, in the interest of determining the reason for the suspension of the service allowance, the organ establishing the pension has to forward electronically the data of the entitled person to the organ keeping the register of criminal records, which then compares these data with the data of convicted persons contained in the criminal records. In view of the fact that the Ombudsman has proposed the annulment of the entire provision relating to the suspension of service allowance, this would also mean the disappearance of the legitimate objective, on the basis of which any related data processing would be lawful.  

Pursuant to the Act the payment of old age pension is terminated if the person entitled to it engages in undeclared gainful activities. According to the Ombudsman the Act makes a link between two unrelated issues: the payment of the old age pension-type allowance to the entitled person and failure to comply with the obligation to pay tax on income originating from such undeclared work. Consequently, this provision also infringes the requirement of the rule of law.

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