Minimum income threshold and its review procedures are unconstitutional
On 5 October, the Constitutional Court recognised the norms which establish the minimum income threshold and its review procedures as incompatible with Articles 1 and 109 of the Constitution.
The case was brought before the Constitutional Court on the basis of an application submitted by twenty members of the Saeima. It challenges the legal norms adopted by the legislator after the judgments of the Constitutional Court in cases No. 2019-24-03 and No. 2019-25-03. These norms set the minimum income threshold and also its review procedures.
The initially contested norms in the case were in force until 30 June 2023 and established the lowest minimum income threshold of EUR 109 for the first or only person in the household and EUR 76 for the other persons in the household, and also provided for the regularity of the review of that threshold, i.e. at least every three years. On 8 March 2023, the Saeima adopted amendments to the initially contested norms which entered into force on 1 July 2023. The contested norms, in the wording currently in force, establish the method for determining the minimum income threshold and the lowest limit, which is 20 per cent of the median income, and also the review of that threshold on an annual basis.
The Constitutional Court concluded that the initially contested norms had been expressed in a new wording and thus should be recognised as null and void. However, the Court had to ascertain whether the contested norms changed the legal situation in substance. The Constitutional Court recognised that the issue in question was of social significance and concerned substantial public interest. Although the legislator has amended the originally contested norms, they still provide for the procedures for determining the minimum income threshold. They therefore govern the same legal relationships. Consequently, the Constitutional Court decided that the proceedings in the case should not be discontinued and the compatibility of both the initially contested norms and the new contested norms with Articles 1 and 109 of the Constitution should be assessed.
The Constitutional Court recognised that the legislator itself, both in the initially contested norms and in the new contested norms, had regulated the most important issues related to determining the minimum income threshold and had provided for an objective method for determining the minimum income threshold.
When assessing whether the legislator had fulfilled the obligation to review the minimum income threshold on a regular basis, the Constitutional Court recognised that the new contested norms ensured regular review of the minimum income threshold, as it was based on the most up-to-date data available to the legislator on the median income. However, with the initially contested norms, the legislator had not ensured regular review of the minimum income threshold, as it had allowed the minimum income threshold to be based also on the data which had been obtained five years ago. Therefore, the Constitutional Court recognised the initially contested norms as incompatible with Articles 1 and 109 of the Constitution.
As regards the new contested norms, the Constitutional Court assessed whether the procedures for determining the minimum income threshold, together with other measures of the social security system, created an opportunity for every person in need to live a life consistent with human dignity, and examined whether the amount of the guaranteed minimum income benefit, together with other support measures, ensured satisfaction of the basic needs recognised by the Constitutional Court in its previous judgments, i.e. food, clothing, housing, medical assistance and basic education, and also the opportunity to participate in social, political, and cultural life. The Constitutional Court concluded that although the legislator had established support measures to ensure certain basic needs in a minimum amount, it could not be recognised that every person in need would have access to sufficient support to meet all his or her basic needs. Consequently, the procedures for determining the minimum income threshold provided for in the new contested norms, together with the measures of the social security system, do not ensure that every person in need has the opportunity to live a life consistent with human dignity. Therefore, the Constitutional Court recognised that the new contested norms were also incompatible with Articles 1 and 109 of the Constitution.
The Constitutional Court pointed out that a social assistance system that would ensure transparent provision of support had not yet been established, so that local governments, policy makers, and the legislator itself would have access to information on the amount and effectiveness of support provided to persons in need. Moreover, while the social assistance system is intended to help persons in need to escape from poverty on their own, it should not create conditions that undermine the desire of persons in need to participate in the social security system to meet their basic needs and improve their living conditions.
When deciding on the moment when the contested norms would become invalid, the Constitutional Court concluded that the recognition of the initially contested norms as null and void from the moment of their adoption would lead to legal instability and would be contrary to the purpose of social assistance. As regards the new contested norms, the Constitutional Court concluded that the legislator should introduce a system of social assistance that would ensure transparent, effective, and targeted provision of support, and the changes should be harmonised with the State budget for the next financial year. Therefore, the Constitutional Court recognised that it was necessary and permissible that the new contested norms remain in force for a certain period of time. Consequently, it was declared by the Constitutional Court that the new contested norms would become null and void as of 1 January 2025.
Linked case: 2022-34-01