A Case Initiated regarding Recalculation of Disability Pension
On 12 February 2014 the 1st Panel of the Constitutional Court initiated a case “On the Compliance of Section 16(4) of the law “On State Pensions” (in the wording, which was in force from 7 January 1997 to 30 September 2013, and in the wording of 17 July 2013), insofar it applies to the formula for recalculating the disability pension if the disability group is changed, if the recipient of the disability pension prior to the change of the disability group had been an employee and had made social insurance contributions, with Article 91 and Article 109 of the Satversme of the Republic of Latvia.”
Contested Norm
Section 16(4) of the law “On State Pensions”: “In the event that the disability group changes, the amount of Group I and Group II disability pension shall be recalculated from the day the repeated determination of disability in accordance to the procedures prescribed in this Section, taking into account the insured person’s individual and the maximum possible length of period of insurance and the average wage subject to insurance contributions as was taken into account in calculating (recalculating) the disability pension, and parts of recalculation of pension, which has been calculated in accordance with Section 24(5) of this Law. If the disability group is changed from a less severe to a more severe one or the more severe disability group, which was determined previously, is reinstated, then the recalculated disability pension benefit may not be less than the previously received amount of disability pension.”
Until 30 September 2013 the aforementioned norm provided: “In the event that the disability group changes, the amount of the disability pension shall be recalculated from the day the repeated determination of disability in accordance to the procedures prescribed in this Section, taking into account the insured person’s individual and the maximum possible length of period of insurance and the average (updated) wage subject to insurance contributions as was taken into account in calculating (recalculating) the disability pension up until the day the disability group was changed. If the disability group is changed from a less severe to a more severe one, the recalculated disability pension benefit may not be less than the previously received amount of disability pension.”
Norm of Higher Legal Force
Article 91 of the Satversme: “All human beings in Latvia shall be equal before the law and the courts. Human rights shall be realised without discrimination of any kind. “
Article 109 of the Satversme: “Everyone has the right to social security in old age, for work disability, for unemployment and in other cases as provided by law. “
The Facts
The case has been initiated having regard to an application by the Administrative District Court. The court is hearing a case in connection with pension recalculation in connection with changing of the disability group. In 2000 a person was granted the third disability group and the disability pension was calculated. In 2013 the person was granted the second disability group and the disability pension was calculated in accordance with the contested norm.
The court notes that the contested norm both in its current wording and the wording, which was in force until 30 September 2013, allows differential treatment of persons with disability, i.e., the formula for calculating pensions differs, depending upon whether the second disability group was granted immediately or whether another disability group had been granted prior to it. With regard to persons, who previously have had another disability group, the social insurance contributions, made prior the disability was granted for the first time, are taken into account in recalculating the pension. Whereas, with regard to persons, to whom the disability is granted for the first time, the social insurance contributions made before granting the disability status, are taken into consideration.
In the case under review the social insurance contributions, which the person had made prior the third disability group was granted, i.e., prior to 2000, were taken into consideration. However, the person continued to work following the granting of the disability, and continued to make social insurance contributions. If, in calculating the pension of the second disability group, the social insurance contributions made in the recent years had been taken into account, the amount of the pension would be twofold.
Thus, the Administrative District Court holds that the contested norm is incompatible with the principle of equality and the right to social security.
Legal Proceedings
The Constitutional Court has asked the Saeima to provide a reply on the facts of the case and legal substantiation by 14 April 2014.
The term for preparing the case is 14 July 2014. The Court shall decide upon the procedure and the date for hearing the case after the case has been prepared.
Linked case: 2014-05-01