Information Note on the Court’s case-law No. 167
October 2013
Da Conceição Mateus and Santos Januário v. Portugal (dec.) - 57725/12 and 62235/12
Decision 8.10.2013 [Section II]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Peaceful enjoyment of possessions
Reduction in benefits payable to public-sector pensioners: inadmissible

Facts – The applicants, who were pensioners affiliated to Portugal’s State pension scheme, asked the Court to rule that the cuts imposed on certain of their pension entitlements (holiday and Christmas bonuses) as a result of a programme of austerity measures had breached their rights under Article 1 of Protocol No. 1.
Law – Article 1 of Protocol No.1: Both applicants were legally entitled to holiday and Christmas subsidies, which they received as usual in 2012, although with a reduction amounting to 10.8% of the total annual pension benefits in the case of the first applicant and to 10.7% in the case of the second applicant. Accordingly, they had a proprietary interest falling within the ambit of Article 1 of Protocol No. 1. Although the relevant provisions of the 2012 State Budget Act had been declared unconstitutional, on the basis that no equivalent effort had been required of citizens employed in the private sector, a decision to allow the cuts for 2012 had nevertheless been adopted by the Constitutional Court on the basis of a constitutional provision which allowed the effects of a finding of unconstitutionality to be restricted in exceptional circumstances. The cuts had therefore been allowed in accordance with the domestic law. 
The cuts had been intended to reduce public spending and were part of a broader programme designed by the national authorities and their counterparts in the European Union and International Monetary Fund to allow Portugal to secure the necessary short-term liquidity to the State budget with a view to achieving medium-term economic recovery. The very fact that a programme of such magnitude had had to be put in place showed that the economic crisis and its effect on the State budget balance had been exceptional in nature. As it had recently done in similar circumstances relating to austerity measures in Greece*, the Court considered that the cuts in social-security benefits provided by the 2012 State Budget Act had clearly been in the public interest. As in Greece, the measures had been adopted in an extreme economic situation, but unlike the position in Greece, they were transitory. While it had reduced the applicants’ subsidies by EUR 1,102.40 and EUR 1,368.04 respectively, the State Budget Act had left unchanged the rate of their basic pension, which they had continued to receive for the full twelve months of 2012. In addition, the cuts had only been applicable for a period of three years (2012-14). The interference of the 2012 State Budget Act with the applicants’ right to the peaceful enjoyment of their possessions had therefore been limited both in time and in quantitative terms (less than 11% of their total social-security benefits). 
In those circumstances, it had not been disproportionate to reduce the State budget deficit on the expenditure side, by cutting salaries and pensions paid in the public sector, when no equivalent cuts had been made in the private sector. Moreover, since the legislature had remained within the limits of its margin of appreciation and previous measures involving “remuneratory reductions” contained in the State Budget Act for 2011 had proved to be insufficient, it was not for the Court to decide whether better alternative measures could have been envisaged in order to reduce the State budget deficit. In the light of the exceptional economic and financial crisis faced by Portugal at the material time and given the limited extent and the temporary effect of the reduction of their holiday and Christmas subsidies, the applicants had not borne a disproportionate and excessive burden.
Conclusion: inadmissible (manifestly ill-founded).

* Koufaki and Adedy v. Greece (dec.), 57665/12 and 57657/12, 7 May 2013, Information Note 163.

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