Top Court Rules in Favour of Partial Pensions for Working SPs

By , 03 Oct 2019, 11:03 AM Business
Top Court Rules in Favour of Partial Pensions for Working SPs CC-by-1.0

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STA, 2 October 2019 - The Constitutional Court has ruled in a close vote that the retirement and disability pension act is not unconstitutional in the part that prevents sole proprietors from receiving full pension if they decide to continue working after reaching retirement age.

The top court, which received the review request from the Ljubljana Labour and Social Court, said on Wednesday that intergenerational fairness, equality and financial sustainability took precedence over the interests of sole proprietors.

It ruled that the constitutional right to pension does not ensure that individuals receive old-age pension when they do not give up working. The Constitution guarantees the right to a pension to individuals who have paid their contributions if they also meet all other reasonable conditions.

It is reasonable to make full pension conditional on giving up work, considering the benefits pursued, said the court, which decided in a 4 to 5 vote that the act was not in violation of the constitutional right to social security. Two judges also submitted dissenting opinions.

Meanwhile, the court was unanimous in its decision that the act was not in contradiction of the constitutional principle of equality, comparing other groups who may also continue working after reaching retirement age.

It also said that the act followed the principle of protection of legitimate expectations and was not in conflict with the right to free economic incentive.

The court also said that there are a number of reasons why sole proprietors decide to either continue work or retire, adding that it was not the legislature's intention to encourage sole proprietors to stop working and also could not have foreseen such decisions being made.

Sole proprietors, who continue working have to give up up to 80% of their pension. Meanwhile, legislative changes are in the pipelines that would decrease this figure to 50%.

The Chamber of Crafts and Small Business (OZS) responded by stressing the decision had been made in a close vote and that dissenting opinions showed that the existing rules were neither appropriate nor just.

The OZS has been striving for Slovenia to introduce double status of pensioners who want to continue working, a solution that would enable them to receive full pension.

The chamber agrees with judge Etelka Korpič Horvat, who said in her dissenting opinion that double status would be beneficial for everybody. Retired proprietors would be able to continue working and would also contribute to the pension and health insurance purses.

"It is also far from insignificant that double status eliminates the poverty of those with low pensions. Double status strengthens the value of labour without preventing the young generations from working," the OZS quotes Korpič-Horvat's opinion.

The chamber also expressed the belief that the decision and the dissenting opinions would convey to the National Assembly that it could introduce a double system that would be much fairer and more reasonable than the existing provisions.

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