a)  Hungary / b)  Constitutional Court / c) / d)  27-05-1997 / e)  277/B/1997 / f) / g)  Alkotmánybíróság Határozatai (Official Digest), 5/1997 / h) .
Keywords of the systematic thesaurus:
General Principles - Vested and/or acquired rights.
General Principles - Prohibition of arbitrariness.
Fundamental Rights - Equality - Scope of application - Social security.
Fundamental Rights - Civil and political rights - Right to property.
Fundamental Rights - Economic, social and cultural rights - Right to social security.
Fundamental Rights - Economic, social and cultural rights - Right to a pension.
In Hungary the social security system is a so-called mixed system in which, in addition to elements of insurance, welfare elements (based on the principle of solidarity) are also present. This system is not unconstitutional unless it violates the principles of the protection of acquired rights and the right to social security.
The petitioner requested constitutional review of Article 38/A.3 of Law II of 1975 on Social Security, according to which pensions and accident pensions must be increased twice a year in proportion to the increase in the average net salary. The Government has the right to fix the maximum and the minimum of the increase. The petitioner claimed that this provision contravenes the prohibition on discrimination declared by Article 70/A of the Constitution.
The Court found the claim to be without foundation. In its reasoning the Court recalled one of the previous decisions on social security. In 1992, Parliament decided to raise old-age pensions and other allowances, but fixed the maximum of the increase both in terms of percentage and nominal sum. The petitioners at that time held that this law violated their right to social assistance. In the relevant decision (26 of 1993-IV.29.), the Constitutional Court declared that social security is of a mixed nature: it is part an insurance, part social benefit. This mixed system of social security is not in itself unconstitutional, as long as it infringes neither an acquired right nor the right to social security. However, an arbitrary change in the ratios of the insurance and solidarity elements (e.g. reducing the higher pensions in order to increase the lower ones) is constitutionally prohibited. In that decision, the Court also stated that the State's discretion to increase pensions did not derive from Article 70/A of the Constitution (the anti-discrimination clause). However, it did declare that the determination of a minimum increase in terms of a nominal sum constituted a kind of positive discrimination, in accordance with Articles 70/A.3 of the Constitution (promotion of the realisation of equality before the law through measures arising to eliminate inequalities of opportunity) and 70/E.1 of the Constitution (right to social security, and in the case of old age, illness, disability, being widowed or orphaned, and in the case of unemployment through no fault of their own, entitlement to the provisions necessary for subsistence).
In the course of interpreting Article 70/E of the Constitution, the Court pointed out several times that the state meets the obligation specified in this article if it organises and operates a system of social security and welfare benefits such that adequate welfare provisions are made. Concerning this article, the Court also declared that the citizen’s right to social security does not exclude the possibility that the achieved living standard of citizens could deteriorate.
In the instant case, the Court held it to be in accordance with the Constitution that the Law entitles the Government to fix the maximum and the minimum of the increase, since it is merely a technical question. It would be unconstitutional only if the legislator had not taken into account the social security’s insurance element, or had done so inappropriately.
Supplementary information:
In this case, three justices out of nine wrote dissenting opinions.
According to one, the state has the right to increase pensions in the case of pensioners in a lower pension bracket, but does not have the right to deprive any pensioner of their acquired rights in order to effect such an increase. Determining the upper limit of an increase in pensions therefore infringes the right to property and the anti-discrimination clause of the Constitution.
According to the other two justices, the protection of property as a basic right should be extended to social security benefits and expectations, and thus, no one should be deprived of a social benefit, without taking into account the relevant Constitutional provision on property rights.
However, the right to social assistance to a level necessary for subsistence is based upon the principle of solidarity. The State meets its obligation specified in Article 70/E of the Constitution if it organises and operates a system of social security and welfare benefits such that adequate welfare provisions are made. The state has wide-ranging rights with respect to changes, regroupings and transformations of the welfare benefit system depending on economic conditions.
The elements of solidarity and insurance can be applicable in determining the level of pensions. It is the pensioners’solidarity, but the solidarity of society which has to ensure a sufficient standard of living. The challenged provision does not contain a guarantee to protect the property rights of pensioners getting higher pensions.