Case No. 35/04-37/04-72/06
THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA
RULING
ON THE COMPLIANCE OF PARAGRAPH 3 OF ARTICLE 4
(WORDING OF 4 NOVEMBER 2004), PARAGRAPH 2 OF ARTICLE
8 (WORDING OF 4 NOVEMBER 2004) AND PARAGRAPHS 3 AND
4 (WORDINGS OF 4 JULY 2002 AND 7 OCTOBER 2003) OF
ARTICLE 34 OF THE REPUBLIC OF LITHUANIA LAW ON STATE
SOCIAL INSURANCE WITH THE CONSTITUTION OF THE
REPUBLIC OF LITHUANIA
26 September 2007
Vilnius
The Constitutional Court of the Republic of Lithuania,
composed of the Justices of the Constitutional Court Armanas
Abramavičius, Toma Birmontienė, Egidijus Kūris, Kęstutis
Lapinskas, Zenonas Namavičius, Ramutė Ruškytė, Vytautas
Sinkevičius, Stasys Stačiokas, and Romualdas Kęstutis Urbaitis,
with the secretary of the hearingDaiva Pitrėnaitė,
in the presence of the representatives of the Seimas of the
Republic of Lithuania, the party concerned, who were Jadvyga
Andriuškevičiūtė, Head of the Labour and Social Law Unit of the
Legal Department of the Office of the Seimas (who represented the
Seimas in the part of the case regarding petitions No. 1B-43/2004
and 1B-45/2004 of the Vilnius Regional Administrative Court, the
petitioner), and Algirdas Sysas, a Member of the Seimas (who
represented the Seimas in the part of the case regarding petition
No. 1B-63/2006 of the Vilnius Regional Administrative Court, the
petitioner),
pursuant to Articles 102 and 105 of the Constitution of the
Republic of Lithuania and Article 1 of the Law on the
Constitutional Court, in its public hearing on 18 September 2007
heard case No. 35/04-37/04-72/06 subsequent to the petitions of
the Vilnius Regional Administrative Court, the petitioner,
requesting to investigate whether:
1) Item 1 of Paragraph 3, Paragraph 4 and Item 1 thereof of
Article 34 (wording of 4 July 2002) of the Republic of Lithuania
Law on State Social Insurance are not in conflict with Paragraph
2 of Article 29, Article 52 of the Constitution of the Republic
of Lithuania and the constitutional principles of justice and a
state under the rule of law (petition No. 1B-43/2004);
2) Item 1 of Paragraph 3, Paragraph 4 of Article 34
(wording of 4 July 2002) of the Republic of Lithuania Law on
State Social Insurance, and Item 7 of the latter paragraph to the
extent that, according to the petitioner, it is established that
the obligation to pay social insurance contributions depends on
the annual sum of income received by the person, that the persons
who are insured by state social insurance and who have income
from individual activity have to pay contributions to receive a
pension, and that only those persons are exempted from payment of
social insurance contributions, who are insured by state social
insurance subsequent to laws of the Republic of Lithuania, the
annual sum of income of whom is smaller than 12 minimum monthly
salaries, are not in conflict with Paragraph 2 of Article 29,
Article 52 of the Constitution of the Republic of Lithuania and
the constitutional principles of justice and a state under the
rule of law (petition No. 1B-45/2004);
3) Paragraph 3 of Article 4 (wording of 4 November 2004),
Item 1 of Paragraph 2 of Article 8 (wording of 4 November 2004),
Item 1 of Paragraph 3 and Item 1 of Paragraph 4 of Article 34
(wording of 7 October 2003) of the Republic of Lithuania Law on
State Social Insurance to the extent that, according to the
petitioner, it is established that those self-employed persons
who receive old age social insurance pensions must pay social
insurance contributions in order to receive the main part and the
supplementary part of the pension and that this obligation is
related with 12 minimum monthly salaries calculated under
procedure established by the law, are not in conflict with
Paragraph 2 of Article 29, Paragraph 1 of Article 48, Article 52
of the Constitution of the Republic of Lithuania and the
constitutional principles of justice and a state under the rule
of law (petition No. 1B-63/2006).
By the 10 May 2006 Decision "On Joining Petitions into One
Case" of the Constitutional Court of the Republic of Lithuania,
petition No. 1B-43/2004 (Case No. 35/04) and petition No. 1B-45/
2004 (Case No. 37/04) of the Vilnius Regional Administrative
Court, the petitioner, were joined into one case and it was given
reference No. 35/04-37/04. By the 27 June 2007 Decision "On
Joining Petitions into One Case" of the Constitutional Court of
the Republic of Lithuania, petitions Nos. 1B-43/2004, 1B-45/2004
(Case No. 35/04-37-04) of the Vilnius Regional Administrative
Court, the petitioner, and petition No. 1B-63/2006 (Case No. 72/
06) of the Vilnius Regional Administrative Court, the petitioner,
were joined into one case and it was given reference No. 35/04-
37/04-72/06.
The Constitutional Court
has established:
I
1. The Vilnius Regional Administrative Court, the
petitioner, was investigating an administrative case. By its
ruling, the court suspended the investigation of the case and
applied to the Constitutional Court with a petition, requesting
to investigate whether Item 1 of Paragraph 3, Paragraph 4 and
Item 1 thereof of Article 34 (wording of 4 July 2002) of the Law
on State Social Insurance (hereinafter also referred to as the
Law) are not in conflict with Paragraph 2 of Article 29, Article
52 of the Constitution and the constitutional principles of
justice and a state under the rule of law (petition No. 1B-43/
2004).
2. The Vilnius Regional Administrative Court, the
petitioner, was investigating an administrative case. By its
ruling, the court suspended the investigation of the case and
applied to the Constitutional Court with a petition, requesting
to investigate whether Item 1 of Paragraph 3, Paragraph 4 of
Article 34 (wording of 4 July 2002) of the Law, and Item 7 of the
latter paragraph to the extent that, according to the petitioner,
it is established that the obligation to pay social insurance
contributions depends on the annual sum of income received by the
person, that the persons who are insured by state social
insurance and who have income from individual activity have to
pay contributions to receive a pension, and that only those
persons are exempted from payment of social insurance
contributions, who are insured by state social insurance
subsequent to laws of the Republic of Lithuania, the annual sum
of income of whom is smaller than 12 minimum monthly salaries
(hereinafter also referred to as the MMS), are not in conflict
with Paragraph 2 of Article 29, Article 52 of the Constitution
and the constitutional principles of justice and a state under
the rule of law (petition No. 1B-45/2004).
3. The Vilnius Regional Administrative Court, the
petitioner, was investigating an administrative case. By its
ruling, the court suspended the investigation of the case and
applied to the Constitutional Court with a petition, requesting
to investigate whether Paragraph 3 of Article 4 (wording of 4
November 2004), Item 1 of Paragraph 2 of Article 8 (wording of 4
November 2004), Item 1 of Paragraph 3 and Item 1 of Paragraph 4
of Article 34 (wording of 7 October 2003) of the Law to the
extent that, according to the petitioner, it is established that
those self-employed persons who receive old age social insurance
pensions must pay social insurance contributions in order to
receive the main part and the supplementary part of the pension
and that this obligation is related with 12 MMS calculated under
procedure established by the law, are not in conflict with
Paragraph 2 of Article 29, Paragraph 1 of Article 48, Article 52
of the Constitution and the constitutional principles of justice
and a state under the rule of law (petition No. 1B-63/2006).
II
1. The petition of the Vilnius Regional Administrative
Court, the petitioner, requesting to investigate whether Item 1
of Paragraph 3, Paragraph 4 and Item 1 thereof of Article 34
(wording of 4 July 2002) of the Law are not in conflict with
Paragraph 2 of Article 29, Article 52 of the Constitution and the
constitutional principles of justice and a state under the rule
of law (petition No. 1B-43/2004), is grounded on the following
arguments.
Under Paragraph 3 of Article 34 (wording of 4 November
2004) of the Law on State Social Insurance, the persons specified
in Item 6 of Paragraph 1 of Article 4 (wording of 20 November
2001) of the Law, including advocates, are compulsorily insured
to the basic pension and to supplementary parts of the pension.
Paragraph 4 of Article 34 (wording of 4 July 2002) of the Law
inter alia provides that the advocates who are pensioners of the
State Social Insurance Fund, may be exempted from payment of
social insurance contributions in cases the annual sum of their
income is smaller than 12 MMS. According to the petitioner, due
to such legal regulation advocates are treated unequally: some
advocates who are pensioners of the State Social Insurance Fund,
may be exempted from payment of social insurance contributions in
cases the annual sum of their income is smaller than 12 MMS,
while other advocates who are pensioners of the State Social
Insurance Fund, in cases the annual sum of their income is bigger
than 12 MMS must pay social insurance contributions to the
supplementary part of the pension; thus, one group of advocates
is distinguished against another one and the principle of equal
rights of persons entrenched in Article 29 of the Constitution is
violated. In the opinion of the petitioner, the disputed
provisions are in conflict with the Constitution also in the
aspect that these provisions do not ensure proper implementation
nor legal defence of the human right to receive pension or social
assistance, although Article 52 of the Constitution obliges the
state to establish sufficient measures of the implementation and
legal defence of the rights of citizens to pensionary maintenance
and social assistance.
2. The petition of the Vilnius Regional Administrative
Court, the petitioner, requesting to investigate whether Item 1
of Paragraph 3, Paragraph 4 of Article 34 (wording of 4 July
2002) of the Law, and Item 7 of the latter paragraph to the
extent that, according to the petitioner, it is established that
the obligation to pay social insurance contributions depends on
the annual sum of income received by the person, that the persons
who are insured by state social insurance and who have income
from individual activity have to pay contributions to receive a
pension, and that only those persons are exempted from payment of
social insurance contributions, who are insured by state social
insurance subsequent to laws of the Republic of Lithuania, the
annual sum of income of whom is smaller than 12 MMS, are not in
conflict with Paragraph 2 of Article 29, Article 52 of the
Constitution and the constitutional principles of justice and a
state under the rule of law (petition No. 1B-45/2004), is
grounded on the following arguments.
Under Article 52 of the Constitution, the state shall
guarantee to citizens the right to receive an old age pension,
therefore, in the opinion of the petitioner, a person, who pays
contributions of state social insurance and is insured by state
social insurance under laws of the Republic of Lithuania, should
not be made to pay additional contributions also from the income
received from individual activity in order to receive the
pension, since, according to the petitioner, he already is
carrying out the obligation to pay contributions of state social
insurance. Such a requirement, according to the petitioner, is in
conflict with the constitutional principles of justice and a
state under the rule of law. As a matter of fact, state social
insurance contributions are paid by the persons who have income
and to whom, according to the petitioner, this obligation is
established so that one of the pensions provided for in the Law
could be awarded in the future. The appearance of this
obligation, according to the petitioner, cannot be grounded by
the size of the income of one year: it is not fair to demand that
the persons whose income is bigger than 12 MMS within one year
pay contributions to the basic pension and to the supplementary
part of the pension and to exempt the persons whose income within
one year is less than 12 MMS. Nor is it fair to demand that the
persons who are insured by social insurance and who have income
pay such insurance contributions, and to exempt the persons, who
are insured by social insurance but who have no income, from such
payment. According to the petitioner, "the law cannot be
different to persons of different social status". Therefore, the
provision of the Law that only those persons who are self-
employed and have income must pay contributions for the basic
pension and the supplementary part of the pension, if the income
equals to the sum of 12 MMS within one year or if it is bigger
than the said sum, is to be regarded as a discriminatory one and
as conflicting with Paragraph 2 of Article 29 of the
Constitution, which prohibits to restrict the rights of the human
being, or grant him any privileges on the ground of gender, race,
nationality, language, origin, social status, belief,
convictions, or views.
3. The petition of the Vilnius Regional Administrative
Court, the petitioner, requesting to investigate whether
Paragraph 3 of Article 4 (wording of 4 November 2004), Item 1 of
Paragraph 2 of Article 8 (wording of 4 November 2004), Item 1 of
Paragraph 3 and Item 1 of Paragraph 4 of Article 34 (wording of 7
October 2003) of the Law to the extent that, according to the
petitioner, it is established that those self-employed persons
who receive old age social insurance pensions must pay social
insurance contributions in order to receive the main part and the
supplementary part of the pension and that this obligation is
related with 12 MMS calculated under procedure established by the
law, are not in conflict with Paragraph 2 of Article 29,
Paragraph 1 of Article 48, Article 52 of the Constitution and the
constitutional principles of justice and a state under the rule
of law (petition No. 1B-63/2006), is based on the following
arguments.
According to the disputed norms, not only those self-
employed persons who are engaged in individual activity and who
will receive the state social insurance old age pension in the
future, but also those who already meet the conditions
established in the Law in order to receive the state social
insurance old age pension, as well as those who have been awarded
this pension and receive it, are compulsorily insured by state
pensions social insurance for the main and supplementary part of
the pension; they are compulsorily insured for the main part of
the pension without any reservations, while they are insured for
the supplementary part of the pension provided the sum of their
income within one year is equal to or bigger than 12 MMS.
However, the fact that under the procedure established by laws
the person was awarded the state social insurance old age pension
from the budget of the State Social Insurance Fund of the
Republic of Lithuania means that the person meets all the
conditions established by the law in order to receive this
pension, while the state must execute this property commitment to
pay the pension. In the opinion of the petitioner, the fact that
the persons who receive the old age pension and who are self-
employed must continue to pay contributions for the main and
supplementary parts of the pension violates the principles of
equality, justice and a state under the rule of law, restricts
the right of the persons, who receive the state social insurance
old age pension, to freely choose a job and business (Paragraph 1
of Article 48 of the Constitution) and it distorts the provisions
of social assistance (Article 52 of the Constitution).
III
In the course of the preparation of the case for the
Constitutional Court hearing, written explanations were received
from the representatives of the Seimas, the party concerned, who
were Jadvyga Andriuškevičiūtė, the Member of the Seimas B.
Bradauskas (who represented the Seimas in the part of the case
regarding petition No. 1B-43/2004 of the Vilnius Regional
Administrative Court, the petitioner), D. Petrylaitė, a senior
advisor of the Legal Department of the Office of the Seimas (who
represented the Seimas in the part of the case regarding petition
No. 1B-45/2004 of the Vilnius Regional Administrative Court, the
petitioner), and the Member of the Seimas A. Sysas, in which it
is maintained that the disputed provisions of the Law are not in
conflict with the Constitution.
1. According to J. Andriuškevičiūtė (who represented the
Seimas in the part of the case regarding petition No. 1B-43/2004
of the Vilnius Regional Administrative Court, the petitioner),
the argument that allegedly the person who has acquired the right
to the old age pension is to be regarded as the one who has
already carried out the obligation to pay the contributions in
order to receive the pension is not in line with the essence and
purpose of state social insurance and denies the striving for a
harmonious civil society and state under the rule of law which is
entrenched in the Constitution, thus, it is constitutionally
groundless. The state, which has to take care of its citizens,
has created the system of state social insurance that is based on
the principles of universality and solidarity, in the course of
application of which the persons capable of working have to pay
the contributions, while the persons who due to objective reasons
cannot provide themselves have the right to assistance. One must
make distinction between state social insurance and private
insurance: in case of private insurance the person decides
himself whether to insure himself or not (the conditions of such
insurance is a matter of the agreement of the parties), while the
size of state social insurance contributions, the insurance
period, the procedure of establishment and payment of
contributions as well as other conditions of the insurance are
established by the state. Besides, the Law establishes not only a
duty to pay contributions of state social insurance, but also the
right to receive payouts; everyone who has the insured income,
must pay the contributions, while those who cannot receive income
due to the fact that they are not able to work because of the old
age or disability, have the right to receive payouts. The
disputed provisions of the Law are not discriminatory, since they
consolidate the socially important striving whereby the most
socially vulnerable persons who receive small income have the
right to be exempted from payment of insurance contributions.
2. B. Bradauskas, a Member of the Seimas, assented to these
arguments of J. Andriuškevičiūtė in writing.
3. According to D. Petrylaitė (who represented the Seimas
in the part of the case regarding petition No. 1B-45/2004 of the
Vilnius Regional Administrative Court, the petitioner), Lithuania
chose the state social insurance model which is based on the
social solidarity principle and which is dominant in the world.
Under this model young and healthy people allot part of the
income earned by them to those who cannot work and provide for
themselves due to old age, disability or who lost their job. The
Lithuanian state social insurance system is universal and
encompasses almost all residents of the Republic of Lithuania,
while the right to receive state social insurance payouts is
related first of all with the participation of the person in the
system of social insurance, i.e. with whether he paid state
social insurance contributions (or such contributions were paid
for him). The state, having created such system of social
security and guaranteeing such security, may and must demand that
a person carry out certain duties. When the provisions of Article
52 of the Constitution are implemented, one has to create a
mechanism so that the principle of equality of persons would not
be violated and that no unreasonably big exceptions would be
created to the system based on solidarity and unity; no one
should forget that he belongs to society; while making use of
social and legal assistance and guarantees provided by society, a
person should carry out those duties that appear due to the fact
that he belongs to society.
4. J. Andriuškevičiūtė, which was commissioned by Ordinance
of the Speaker of the Seimas No. 135 "On Amending Ordinance of
the Speaker of the Seimas No. 182 of 11 November 2004" of 13
March 2007 to represent the Seimas instead of D. Petrylaitė in
the part of the case regarding petition No. 1B-45/2004 of the
Vilnius Regional Administrative Court, the petitioner, assented
to the aforesaid arguments of D. Petrylaitė.
5. According to A. Sysas (who represented the Seimas in the
part of the case regarding petition No. 1B-63/2006 of the Vilnius
Regional Administrative Court, the petitioner), in the system of
social insurance of pensions based on the redistribution
principle all the insured persons pay social insurance
contributions on a compulsory basis from all remuneration of work
calculated to them, while the size of social insurance
contributions is proportionate to the taxed income. The state
established the system of social insurance pensions based on the
solidarity principle, in which state social insurance pensions
are financed by contributions made by working individuals,
precisely guaranteeing the right of citizens consolidated in
Article 52 of he Constitution to receive old age and disability
pensions as well as social assistance in the event of
unemployment, sickness, widowhood, loss of the breadwinner, and
in other cases provided for by laws. The disputed legal
regulation ensures social justice by applying the redistribution
principle and it guarantees collection of the funds necessary in
order to pay social insurance payouts and it discriminates no
one, it does not grant any privileges to anyone, and it does not
limit the right of the person to freely choose a job and
business.
IV
1. In the course of the case for judicial consideration
written explanations were received from P. Koverovas, State
Secretary of the Ministry of Justice of the Republic of
Lithuania, R. Kairelis, State Secretary of the Ministry of Social
Security and Labour of the Republic of Lithuania, M. Mikaila,
Director of the Board of State Social Insurance Fund under the
Ministry of Social Security and Labour, and V. Valeckaitė, Deputy
Director of the Institute of Law.
2. In the course of preparation of the case for judicial
consideration a paper of ten advocates (with attachmentsrulings
of the Klaipėda Regional Administrative Court) was received, from
which it is inter alia clear that courts (judges) also had doubts
as to the compliance of Item 1 of Paragraph 3 and Paragraph 4 (as
well as Item 1 thereof) of Article 34 (wording of 4 July 2004) of
the Law with the Constitution when they were considering other
cases in which, however, it was not decided to apply to the
Constitutional Court.
V
1. At the Constitutional Court hearing, J. Andriuškevičiūtė
and the Member of the Seimas A. Sysas, who were representatives
of the party concerned, virtually reiterated the arguments set
forth in their written explanations as well as presented
additional explanations.
2. At the Constitutional Court hearing a specialist took
the floor, who was L. Rudys, Head of the Contributions
Administration Division of the Board of State Social Insurance
Fund under the Ministry of Social Security and Labour.
The Constitutional Court
holds that:
I
1. The Vilnius Regional Administrative Court, the
petitioner, requests to investigate whether:
- Item 1 of Paragraph 3, Paragraph 4 and Item 1 thereof of
Article 34 (wording of 4 July 2002) of the Law are not in
conflict with Paragraph 2 of Article 29, Article 52 of the
Constitution and the constitutional principles of justice and a
state under the rule of law (petition No. 1B-43/2004);
- Item 1 of Paragraph 3, Paragraph 4 of Article 34 (wording
of 4 July 2002) of the Law, and Item 7 of the latter paragraph to
the extent that, according to the petitioner, it is established
that the obligation to pay social insurance contributions depends
on the annual sum of income received by the person, that the
persons who are insured by state social insurance and who have
income from individual activity have to pay contributions to
receive a pension, and that only those persons are exempted from
payment of social insurance contributions, who are insured by
state social insurance subsequent to laws of the Republic of
Lithuania, the annual sum of income of whom is smaller than 12
minimum monthly salaries, are not in conflict with Paragraph 2 of
Article 29, Article 52 of the Constitution and the constitutional
principles of justice and a state under the rule of law (petition
No. 1B-45/2004);
- Paragraph 3 of Article 4 (wording of 4 November 2004),
Item 1 of Paragraph 2 of Article 8 (wording of 4 November 2004),
Item 1 of Paragraph 3 and Item 1 of Paragraph 4 of Article 34
(wording of 7 October 2003) of the Law to the extent that,
according to the petitioner, it is established that those self-
employed persons who receive old age social insurance pensions
must pay social insurance contributions in order to receive the
main part and the supplementary part of the pension and that this
obligation is related with 12 minimum monthly salaries calculated
under procedure established by the law, are not in conflict with
Paragraph 2 of Article 29, Paragraph 1 of Article 48, Article 52
of the Constitution and the constitutional principles of justice
and a state under the rule of law (petition No. 1B-63/2006).
2. The Vilnius Regional Administrative Court, the
petitioner, had doubts as for the compliance of the aforesaid
articles (paragraphs thereof) of the Law on State Social
Insurance with the Constitution when the said court was
considering administrative cases regarding the fact that the Law
establishes a duty to the advocates who receive social insurance
old age pensions or who are insured by state social insurance
under the laws of the Republic of Lithuania, to pay social
insurance contributions to the main and supplementary parts of
the pension.
It needs to be noted that the legal regulation consolidated
in the disputed articles (paragraphs thereof) of the Law is
designated not only to the advocates who receive social insurance
old age pensions or who are insured by state social insurance
under the laws of the Republic of Lithuania, but also to the
other self-employed persons who are specified in these articles
(paragraphs thereof) of the Law. It is impossible to investigate
into the compliance of the articles (paragraphs thereof) of the
Law, which were specified by the Vilnius Regional Administrative
Court, the petitioner, by singling out only one group of persons,
i.e. advocates, with the Constitution.
3. The disputed legal regulation has been amended and/or
supplemented more than once, however, its essence (in the aspect
that its compliance with the Constitution is disputed by the
Vilnius Regional Administrative Court, the petitioner) has
remained the same: the corresponding articles (paragraphs
thereof) of the Law indicate the self-employed persons whose
annual sum of insured income calculated under Paragraph 3 of
Article 4 (wording of 4 November 2004) and Item 1 of Paragraph 3
of Article 34 (wordings of 4 July 2002 and 7 October 2003) of the
Law is smaller than 12 MMS and who are pensioners of the State
Social Insurance Fund or who are insured by state social
insurance under laws of the Republic of Lithuania, are exempted
from payment of state social insurance contributions for the main
and supplementary parts of the pension.
II
1. In laws and other legal acts of the Republic of
Lithuania such model of financing of state social insurance by
running income (so-called "pay as you go" model) is consolidated
under which state social insurance is based on compulsory
contributions and is guaranteed by the funds collected during the
current period from employed persons, who give part of the income
that they earned to the persons of society, who must be paid the
payouts provided for in the law due to the fact that they have
reached the pensionable age for old age pension, or disability in
their regard has been recognised, or there are other reasons
provided for in the law (inter alia when these members of society
cannot work and provide for themselves due to the objective
reasons provided for in the law).
2. Such model of state social insurance is also applied in
some other states as well; it is based on the principles of
universality and solidarity. The principle of universality means
that all working persons (with some exceptions) who receive
insured income from their activity, must pay state social
insurance contributions, while the principle of solidarity means
that the working (pursuing active economic activities) persons
who receive insured income contribute to accumulation of social
insurance funds, thus creating preconditions to pay payments to
those persons, who must be paid the payments provided for in the
law due to the fact that they have reached the pensionable age
for old age pension, disability in their regard has been
recognised or there are other reasons provided for in the law
(inter alia when these members of society cannot work and provide
for themselves due to the objective reasons provided for in the
law). On the other hand, the solidarity principle also implies
that the persons who pay state social insurance contributions
have the right to receive, in cases and under conditions provided
for in the law, to receive themselves state social insurance
pensions and/or other payments, thus, they acquire a
corresponding legitimate and reasonable expectation.
Thus, in laws of the Republic of Lithuania and other legal
acts such model of state social insurance is established whereby
the working (pursuing active economic activities) persons who
receive insured income must pay social insurance contributions,
while the persons to whom payouts are provided for in the law
must be paid due to the fact that they have reached the
pensionable age for old age pension, or disability in their
regard has been recognised, or there are other reasons provided
for in the law (inter alia when these members of society cannot
work and provide for themselves due to the objective reasons
provided for in the law), have the right to receive state social
insurance payouts. By means of the funds collected during the
running period from compulsory state social insurance
contributions of working persons the pensionary payouts of the
persons who receive the old age pension at that time is financed,
but not the future old age pensions of the persons who pay such
contributions. The duty of the person to pay state social
insurance contributions is linked with reception of insured
income from active economic activitiesfrom labour relations or
individual activityand such a duty appears after one starts to
work provided from the corresponding economic activities the
insured income provided for in the law is received; this duty is
over when the person discontinues active economic activities or,
when he receives, without discontinuing economic activities, the
income which is smaller than the minimum insured income
established by the law (the law can also establish other grounds
for termination of the said duty or it can establish exceptions
to the said general rules). The said duty as a rule does not
depend on the age of the working person or on the number of the
sources of economic activities from which such person receives
income: the contributions are paid from the income received from
each economic activity. Thus one seeks to ensure the accumulation
of the funds necessary for pensions and social assistance and the
payment of corresponding payments. Thus, the general rule is
consolidated that the persons who participate in the labour
market, i.e. those who work under labour (or other) contracts,
state servants, as well as self-employed persons, in case they
have the insured income, are treated equally with regard to the
duty to pay state social insurance contributions; however, there
are certain exceptions to this rule, which must in all cases be
constitutionally reasonable.
3. The payment of state social insurance payouts is related
with the right of working persons to the payouts, including the
old age pension, established by the law. In order to implement
this and other social rights, the State Social Insurance Fund is
established, which is based on the funds of economically active
(working) persons, which are paid as compulsory state social
insurance contributions. State social insurance pensions are paid
from the Budget of the State Social Insurance Fund, which is
formed for one year and which is the basis of finance of state
social insurance. The size of state social insurance
contributions, the insurance period, the procedure for
establishing the size of the contributions and their payment,
other conditions of the insurance are established by the state
which, under the Constitution, must guarantee the right of
citizens to receive old age and disability pensions, social
assistance in the event of unemployment, sickness, widowhood,
loss of the breadwinner, and in other cases provided for by laws.
4. For a long time the state social insurance old age
pension consisted of two parts: the main and the supplementary
parts. The main part of the state social insurance old age
pension is the same to all recipients of pensions, who have the
state social insurance pension period, which is established by
the law and which is necessary for the old age pension. The main
part of the state social insurance old age pension performs the
function of redistribution of income or that of equalling the
sizes of pensions, it permits to implement the solidarity
principle upon which the state social insurance model is
consolidated in laws and other legal acts of the Republic of
Lithuania. While the supplementary part of the state social
insurance old age pension depends on the state social insurance
period of the person and the income from which state social
insurance contributions were paid; the purpose of this part of
the pension is to relate the income receive by the person at his
old age with his former income from work.
Such structure of the state social insurance old age
pension was established in the Republic of Lithuania Law on state
Social Insurance Pensions which was adopted as far back as on 18
July 1994 and which came into force on 1 January 1995. Under the
said law state social insurance old age pensions had to be
differentiated by relating them with the work record of the
person and with the received insured income; the said income was
composed of two parts: the basic pension of the same size (who
had the necessary insurance period) and the differentiated
supplementary part of the pension which depended on the work
period acquired by the person and the received insured income;
the size of the basic pension was related with the minimum
subsistence level (hereinafter referred to as the MSL) and that
size could not be less than 110 percent of the MSL.
In this context it needs to be mentioned that as from 1
July 2007, when (with the established exception) the Republic of
Lithuania Law on Amending and Supplementing Articles 5, 6, 32,
39, 42, 46, 52 and 64 of the Law on State Social Insurance
Pensions and Supplementing It with Articles 24-1, 42-1, 53-1 and
66-1 adopted by the Seimas on 10 May 2007 came into force, the
state social insurance pension is composed not only of its main
and supplementary parts, but also extras for work record years.
5. The variety of (active economic) activities is big one;
one can take part in the labour market on various grounds. As
mentioned, laws of the Republic of Lithuania and other legal acts
establish such state social insurance model, under which the
persons who participate in the labour market, i.e. those who work
under labour (or other) contracts, state servants, as well as
self-employed persons, in case they have the insured income, are
treated equally with regard to the duty to pay state social
insurance contributions. On the other hand, the economic (labour)
activity of self-employed persons is rather specific, since they
do not receive a "formal" monthly salary and guaranteed constant
income, therefore, the corresponding specificity should also be
characteristic of their state social insurance. Besides, this
specificity was reflected also in the Republic of Lithuania Law
on State Social Insurance, which was adopted by the Supreme
Council of the Republic of Lithuania on 21 May 1991 and which
came into force on 20 June 1991. The said law established, among
other things, the exceptions when the aforementioned self-
employed persons were exempted from payment of state social
insurance contributions.
6. It needs to be mentioned that in the course of passage
of the laws regulating the relations of state social insurance
pensions, one did not evade also such legal regulation which was
later recognised as being in conflict with the Constitution. In
the constitutional justice cases wherein one disputed the
compliance of the legal acts (parts thereof) regulating the
relations of pensions and social assistance with the
Constitution, the Constitutional Court, while formulating the
official constitutional doctrine of a socially oriented state,
has revealed the provisions of the legal regulation of state
social insurance, pensionary maintenance and social assistance
which are consolidated in the Constitution, inter alia it
revealed those constitutional imperatives which must be heeded in
the course of regulation of corresponding relations by means of
legal acts.
III
1. The petitioners doubts whether the disputed articles
(paragraphs thereof) of the Law are not in conflict with inter
alia Paragraph 2 of Article 29, Paragraph 1 of Article 48 and
Article 52 of the Constitution.
1.1. Paragraph 2 of Article 29 of the Constitution
provides: "The rights of the human being may not be restricted,
nor may he be granted any privileges on the ground of gender,
race, nationality, language, origin, social status, belief,
convictions, or views."
1.2. Paragraph 1 of Article 48 of the Constitution
provides: "Each human being may freely choose a job or business,
and shall have the right to have proper, safe and healthy
conditions at work, to receive fair pay for work and social
security in the event of unemployment."
1.3. Article 52 of the Constitution provides: "The State
shall guarantee to citizens the right to receive old age and
disability pensions as well as social assistance in the event of
unemployment, sickness, widowhood, loss of the breadwinner, and
in other cases provided for by laws."
2. Under the Constitution, the State of Lithuania is
socially oriented; thus, the sate is under constitutional
obligation and it must undertake the burden of fulfilment of
certain commitments. The social orientation of the sate is
expressed not only in the provisions of Article 52 of the
Constitution: it is reflected in various provisions of the
Constitution, which consolidate the human economic, social and
cultural rights, as well as civil and political rights, the
relations between society and the state, the bases of social
assistance and social security, the principles of the
organisation and regulation of the national economy, the bases of
the organisation and activity of state institutions, etc. When
the content of the constitutional principle of the social
orientation of the State of Lithuania is revealed, the provisions
of Paragraph 2 of Article 29 and Paragraph 1 of Article 48 of the
Constitution are also of importance.
It was also mentioned that in its acts the Constitutional
Court has formulated the official constitutional doctrine of
state social security, social maintenance and social assistance,
inter alia those constitutional imperatives which must be heeded
in the course of regulation of corresponding relations by means
of legal acts. In the context of the constitutional justice case
at issue in which it is decided, subsequent to the petitions of
the Vilnius Regional Administrative Court, the petitioner,
whether the articles (paragraphs thereof) of the Law, which are
designated for regulation of pensionary relations, are not in
conflict with the Constitution, the following provisions of the
official constitutional doctrine are to be mentioned, which were
formulated inter alia in the Constitutional Court rulings of 10
July 1996, 12 March 1997, 23 April 2002, 25 November 2002, 4 July
2003, 3 December 2003, 30 January 2004, 5 March 2004, 13 December
2004 and 7 February 2005 as well as in other Constitutional Court
acts adopted in previous constitutional justice cases:
- as mentioned, the provisions of Article 52 of the
Constitution express the social orientation (social character) of
the state, while the social maintenance, i.e. contribution of the
society to maintenance of such its members who are incapable of
providing themselves from work or other means or who are not
sufficiently provided due to important reasons provided by law,
is recognised as having the status of a constitutional value; the
measures of social protection express the idea of public
solidarity and help a person to protect himself from possible
social hazards; the provisions of Article 52 of the Constitution
guaranteeing citizens' right to social maintenance, obligate the
state to establish sufficient measures to implement and protect
the said rights;
- the state should create a system of social maintenance
which would help to maintain living conditions corresponding to
personal dignity, and, in case of need, would render a person
necessary social help; the constitutional solidarity principle
implies that the burden of fulfilment of certain obligations to
certain extent should be distributed also among members of
society, however, such distribution should be constitutionally
reasoned, it cannot be disproportionate, it cannot deny the
social orientation of the sate and the obligations to the state,
which arise from the Constitution;
- the principle of solidarity in the civil society does not
deny personal responsibility for one's own fate, therefore, the
legal regulation of the social security should be such as to
create preconditions for each member of the society to take care
for one's own welfare, but not to rely solely on the social
security guaranteed by the state; the recognition of mutual
responsibility of a person and the society is important in
ensuring social harmony, guaranteeing freedom of a person and
possibility to protect oneself from difficulties which could not
be overcome by one person alone;
- the right of a person to social assistance and to social
security at large is to be interpreted in accordance with the
imperatives of social harmony and justice which are entrenched in
the Constitution, as well as constitutional principles of equal
rights of persons and proportionality; the constitutional
principle of justice must also be heeded when the system of
pensionary maintenance is reorganised, inter alia if in the
course of reorganisation of the system of pensions the pensions
established in laws and which are not directly indicated in
Article 52 of the Constitution were no longer there or the legal
regulation of these pensions were amended in essence, the
legislator would have to establish a just mechanism of
compensation of incurred losses to the persons, to whom such a
pension had been awarded and paid;
- the formula "the state shall guarantee" as employed in
Article 52 of the Constitution means inter alia that pensions and
various types of social assistance are guaranteed for the persons
on the bases and by the amounts that are established in laws,
while the persons who meet the conditions provided by the law,
have the right to demand that the state grant and pay this
pension to them; after the types of pensions, the persons
entitled to the pension, the bases of granting and payment of
pensions, their amounts, and the conditions have been established
by laws, a duty arises for the state to follow the constitutional
principles of the protection of legitimate expectations and legal
certainty in the area of pensionary maintenance relations; even
in exceptional cases (for example, when due to an economic
crisis, natural disaster etc. there is objective lack of funds
which are necessary for the payment of pensions) the reduced (by
paying heed to the constitutional principle of proportionality)
pensions can be paid only on a temporary basis (i.e. only when
there is an extraordinary situation in the sate);
- the provisions of Article 52 of the Constitution
guaranteeing citizens' right to social maintenance, obligate the
state to establish sufficient measures to implement and legally
protect the said right; these provisions imply a duty of the
legislator to establish the legal regulation which would ensure
the accumulation of funds necessary for pensions and social
assistance and the payment of these pensions and rendering of
social assistance;
- the creation of material preconditions of the payment of
old age pensions is determined both by the time period during
which a person pays state social insurance contributions himself
or someone pays contributions for him, and by the total amount of
state social pension insurance contributions paid to the state
social insurance budget; the total contribution of a person
(total amount of the obligatory state social pension insurance
contributions of a person) while creating material preconditions
for the payment of a state social insurance pension, when the
system of old age pensions is based on social insurance, could
also be one of the criterion which is to be taken account of
while establishing the conditions for the receiving of the state
social insurance pension;
- it is impossible to construe the solidarity principle as
establishing the discretion of the legislator to regulate the
awarding and payment of old age pensions so that the amounts of
old age pensions, when the system of old age pensions is based on
social insurance, while creating the material preconditions of
payment of such pensions, will not or will insignificantly depend
on the amounts of contributions that have been paid; payment of
social insurance contributions implies the right of a person to
receive an old age pension of the correspondent amount, and this
amount may not depend on the paid social insurance contributions;
- the legislator, while establishing which persons are
granted and paid the state pension, the grounds and conditions
for granting and payment of the state pension, as well as the
amounts of this pension, is bound by the constitutional
imperative of social harmony, the principles of justice,
reasonableness and proportionality; also, it is necessary to pay
heed to the constitutional principle of equality of all persons,
which prohibits discrimination and privileges, which obligates to
legally assess the same facts equally and which prohibits
virtually the same facts to arbitrarily assess differently,
however, which does not deny the fact that with regard to certain
categories of persons that are in a different situation
differentiated legal regulation may be established;
differentiated legal regulation when it is applied to certain
groups of persons which are distinguished by the same signs, and
in case one strives for positive and socially meaningful goals,
is not regarded as discrimination or privileges; the
constitutional principle of equality of all persons before the
law would be violated when a certain group of people to which the
legal norm is ascribed, if compared to other addressees of the
same legal norm, were treated differently, even though there are
not any differences in their character and extent between these
groups that such an uneven treatment would be objectively
justified;
- while regulating the pensionary relations, one must heed
Paragraph 1 of Article 48 of the Constitution, which provides for
the opportunity of a human being to choose the type of occupation
at his own discretion (i.e. by its own free decision); the
constitutional freedom of each human being to choose a job and
business implies a duty of the legislator to create legal
preconditions to implement this freedom; under the Constitution
it is not permitted to establish the legal regulation under which
an opportunity for the person who has been awarded and paid old
age pension, would be restricted, due to this, to freely choose
an occupation and business, although he meets the conditions
provided for by law so that he would have a certain occupation or
conduct certain business; the legal regulation under which the
person cannot freely choose an occupation and business due to the
fact that upon the implementation of this right he would not be
paid the awarded old age pension or part thereof which was paid
until then, also must be considered as a restriction of an
opportunity to freely choose an occupation or business.
3. It needs to be held that the legislator not only may,
but also must establish the legal regulation which would create
preconditions for the state to implement its constitutional
obligation to guarantee the right to social security of citizens,
to ensure the accumulation of the funds necessary for pensions
and social assistance and the payment of these pensions and
rendition of social assistance. On the other hand, the burden of
the obligations undertaken by the state falls upon entire society
(Constitutional Court ruling of 23 August 2005), therefore the
said legal regulation should create preconditions to distribute
(of course, by taking account inter alia of the constitutional
principle of solidarity, the constitutional imperatives of social
harmony and justice) the corresponding burden that has fallen
upon the state among members of society, however, it must be
distributed in such a manner that the fulfilment of the duty to
pay state social insurance contributions would not become an
overly heavy burden and the person, due to the fact that he is
fulfilling this duty, would not become the one who needs social
assistance. Also, it needs to be emphasised that the fact that
the person, when being capable of working and economically
active, contributed to the accumulation of the funds of state
social insurance should be of significance to the size of his own
state social insurance old age pension; a person, who by his
contributions contributed to accumulation of the funds of state
social insurance more than others, should have tangible benefit.
4. The content of the legal regulation of social security,
social maintenance, and social assistance is determined by
various factors, inter alia resources and material and financial
capabilities of the state and society. The legislator, while
paying heed to the Constitution, enjoys broad discretion in this
area, inter alia to choose a system of pensions. The fact that in
Lithuania one chose such a system of pensions in which the funds
collected from the compulsory state social insurance
contributions is the main source of financing the system of
pensions cannot be questioned with regard to its compliance with
the Constitution.
IV
On the compliance of Item 1 of Paragraph 3, Items 1 and 7
of Paragraph 4 of Article 34 (wording of 4 July 2002) of the Law
on State Social Insurance with Paragraph 2 of Article 29, Article
52 of the Constitution and the constitutional principles of
justice and a state under the rule of law.
1. As mentioned, the Vilnius Regional Administrative Court,
the petitioner, requests to investigate whether Item 1 of
Paragraph 3, Items 1 and 7 of Paragraph 4 of Article 34 (wording
of 4 July 2002) of the Law are not in conflict with Paragraph 2
of Article 29, Article 52 of the Constitution and the
constitutional principles of justice and a state under the rule
of law (petitions Nos. 1B-43/2004 and 1B-45/2004).
2. It was established in Paragraph 3 of Article 34 (wording
of 4 July 2002) of the Law:
"The state social insurance contributions of the persons
enumerated in Items 6, 7, and 8 of Paragraph 1 of Article 4 of
this Law shall be paid in the following manner: individual
(personal) enterprises pay the contributions for the owners and
tenants of these enterprises, general partnership pay for their
members, commandite partnerships pay for their actual members,
advocates, assistants of advocates, notaries, the persons who
have acquired patents pay for themselves, farmers pay for
themselves and full-age members of their farms who work on their
farms:
1) state social insurance contributions of the owners of
individual (personal) enterprises, tenants of individual
(personal) enterprises, advocates, assistants of advocates,
notaries, members of general partnerships, actual members of
commandite partnerships are paid for the basic pension and the
supplementary part of the pension under procedure and terms
established by the Government; the contributions to the
supplementary part of the pension are paid from the annual sum
(chosen by themselves) of the income declared to state social
insurance, while this sum may not be smaller than 12 minimum
monthly salaries; the persons enumerated in this Item are insured
for the supplementary part of the pension only in the case that
the annual sum of income of the owners of individual (personal)
enterprises, tenants of individual (personal) enterprises,
advocates, assistants of advocates, notaries, members of general
partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of notaries,
calculated from the taxed income that is calculated on the basis
of the Provisional Law on Income Tax of Natural Persons, by
subtracting the tax sum of the tax of the income of natural
persons of the tax year, is equal to or is bigger than 12 minimum
monthly salaries;
2) the persons who acquired patents insure themselves for
the basic pension of state social insurance;
3) farmers ensure themselves and full-age members of their
farms who work on their farms for the basic pension of state
social insurance; the farmers of economically weak farms, when
they insure themselves and full-age members of their farms who
work on their farms under procedure established by the
Government, shall have the right to pay part of the contribution
to state social insurance; another part of state social insurance
contribution shall be covered from funds of the state budget."
It was established in Paragraph 4 of Article 34 (wording of
4 July 2002) of the Law:
"It is permitted that the state social insurance
contributions of the persons enumerated in Item 6 of Paragraph 1
of Article 4 of this Law be not paid (and this period will not be
included in the state social insurance period) only in the cases
when the annual sum of the income of the owners of individual
(personal) enterprises, tenants of individual (personal)
enterprises, advocates, assistants of advocates, notaries,
members of general partnerships, actual members of commandite
partnerships, calculated from the taxed income that is calculated
under the Law on Income Tax and by subtracting the sum of the tax
of the income of tax year, while the annual sum of the income of
notaries, calculated from the taxed income that is calculated on
the basis of the Provisional Law on Income Tax of Natural
Persons, by subtracting the tax sum of the tax of the income of
natural persons of the tax year, is smaller than 12 minimum
monthly salaries, and the said persons are:
1) pensioners of the State Social Insurance Fund;
2) disabled persons of the I and II groups, who are
disabled from childhood and who receive the (social) assistance
pension;
3) those who have reached the age for the old age pension
and receive the (social) assistance pension or compensation under
the Law on (Social) Assistance Pensions;
4) receive the state social insurance pension from a
country, with which the Republic of Lithuania has concluded the
international agreement, which has come into force;
5) in places of confinement;
6) those who registered the status of a liquidated
individual (personal) enterprise or partnership in the Register
of Enterprises, where all the employees of the enterprise or
partnership were dismissed from work;
7) insured by state social insurance under laws of the
Republic of Lithuania."
3. The legal regulation established in Paragraphs 3 and 4
of Article 34 (wording of 4 July 2002) of the Law is to be
construed in the context of other provisions of this law; one
must inter alia take account of Paragraph 1 of Article 4 (wording
of 20 November 2001) of the Law, the provisions of which are
referred to in disputed Paragraphs 3 and 4 of Article 34 (wording
of 4 July 2002) of the Law.
It was inter alia established in Paragraph 1 of Article 4
(wording of 20 November 2001) of the Law:
"The following persons shall be insured by state social
insurance on a compulsory basis: <
>
6) the owners of individual (personal) enterprises, tenants
of individual (personal) enterprises, advocates, assistants of
advocates, notaries, members of general partnerships, actual
members of commandite partnerships <
>."
It was inter alia established in Paragraph 3 of Article 4
(wording of 20 November 2001) of the Law: "The persons specified
in Items 3-14 of Paragraph 1 of Article 4 of this Law are insured
by state social pensions insurance (the persons specified in Item
6 are compulsorily ensured to the basic pension and the
supplementary part of the pension under procedure established in
Article 34 <
>)."
4. Although Vilnius Regional Administrative Court, the
petitioner, requests to investigate whether inter alia Paragraph
4 (and Items 1 and 7 thereof) of Article 34 (wording of 4 July
2002) of the Law was not in conflict with Paragraph 2 of Article
29, Article 52 of the Constitution and the constitutional
principles of justice and a state under the rule of law, it is
clear from the petitions (Nos. 1B-43/2004 and 1B-45/2004) of the
petitioner as well as from the material of the administrative
cases attached to these petitions, wherein it was decided to
apply to the Constitutional Court, that the petitioner had doubts
only whether Items 1 and 7 of Paragraph 4 of Article 34 (wording
of 4 July 2002) of the Law are not in conflict with the
Constitution, but not whether entire Paragraph 4 (wording of 4
July 2002) of Article 34 of the Law is not in conflict with the
Constitution.
5. Under disputed Item 1 of Paragraph 3, Items 1 and 7 of
Paragraph 4 of Article 34 (wording of 4 July 2002) of the Law,
the owners of individual (personal) enterprises, tenants of
individual (personal) enterprises, advocates, assistants of
advocates, notaries, members of general partnerships, actual
members of commandite partnerships (i.e. the self-employed
persons specified in Item 6 of Paragraph 1 of Article 4 (wording
of 20 November 2001) and Item 1 of Paragraph 3 of Article 34
(wording of 4 July 2002) of the Law):
- whose annual sum of income (calculated by subtracting the
sum of the of the tax of the annual income from the taxed income,
calculated under the Law on Income Tax, while the annual sum of
income of notaries, calculated from the taxed income calculated
under the Provisional Law on Income Tax of Natural Persons by
subtracting the tax sum of the tax of the income of natural
persons of the tax year) declared to the state social insurance
was not smaller than 12 MMS, had to pay state social insurance
contributions both to the basic pension and to the supplementary
part of the pension; the contributions to the supplementary part
of the pension had to be paid from the annual sum (chosen by
these self-employed persons) of the declared income to state
social insurance, which could not be smaller than 12 MMS; the
corresponding period had to be included into the state social
insurance period;
- whose annual sum of income (calculated by subtracting the
sum of the of the tax of the annual income from the taxed income,
calculated under the Law on Income Tax, while the annual sum of
income of notaries, calculated from the taxed income calculated
under the Provisional Law on Income Tax of Natural Persons by
subtracting the tax sum of the tax of the income of natural
persons of the tax year) declared to the state social insurance
was smaller than 12 MMS, who were not pensioners of the State
Social Insurance Fund and were not insured by state social
insurance under laws of the Republic of Lithuania (and did not
meet any other of the conditions specified in Paragraph 4 of
Article 34 (wording of 4 July 2002) of the Law, i.e. they were
not disabled persons of the I and II groups, who had been
disabled from childhood and who received the (social) assistance
pension, they were not those who had reached the age for the old
age pension and received the (social) assistance pension or
compensation under the Law on (Social) Assistance Pensions, they
were not those who received the state social insurance pension
from a country, with which the Republic of Lithuania concluded
the international agreement, which had come into force, they were
not in places of confinement, and they were not those who
registered the status of a liquidated individual (personal)
enterprise or partnership in the Register of Enterprises, where
all the employees of the enterprise or partnership were dismissed
from work) had to pay state social insurance contributions to the
basic pension; the corresponding period had to be included into
the state social insurance period;
- whose annual sum of income (calculated by subtracting the
sum of the of the tax of the annual income from the taxed income,
calculated under the Law on Income Tax, while the annual sum of
income of notaries, calculated from the taxed income calculated
under the Provisional Law on Income Tax of Natural Persons by
subtracting the tax sum of the tax of the income of natural
persons of the tax year) declared to the state social insurance
was smaller than 12 MMS, and who were pensioners of the State
Social Insurance Fund and/or were insured by state social
insurance under laws of the Republic of Lithuania (and/or met one
or several of the other conditions specified in Paragraph 4 of
Article 34 (wording of 4 July 2002) of the Law, i.e. they were
disabled persons of the I and II groups, who had been disabled
from childhood and who received the (social) assistance pension,
they were those who had reached the age for the old age pension
and received the (social) assistance pension or compensation
under the Law on (Social) Assistance Pensions, they were those
who received the state social insurance pension from a country,
with which the Republic of Lithuania has concluded the
international agreement, which had come into force, they were in
places of confinement, and they were those who registered the
status of a liquidated individual (personal) enterprise or
partnership in the Register of Enterprises, where all the
employees of the enterprise or partnership were dismissed from
work) were exempted from the payment of state social insurance
contributions (both to the basic pension and to the supplementary
part of the pension).
6. It needs to be emphasised that the Vilnius Regional
Administrative Court, the petitioner, did not present any
arguments which would substantiate the position that the legal
regulation established in Paragraphs 3 and 4 of Article 34
(wording of 4 July 2002) of the Law designed for the legal
situations where the annual sum declared by the owners of
individual (personal) enterprises, tenants of individual
(personal) enterprises, advocates, assistants of advocates,
notaries, members of general partnerships, actual members of
commandite partnerships (i.e. the self-employed persons specified
in Item 6 of Paragraph 1 of Article 4 (wording of 20 November
2001) and Article 34 (wording of 4 July 2002) of the Law) for the
state social insurance was smaller than 12 MMS, while these
persons themselves met one of the conditions specified in Items
2-6 of Paragraph 4 of Article 34 (wording of 4 July 2002) of the
Law (i.e. they were disabled persons of the I and II groups, who
had been disabled from childhood and who received the (social)
assistance pension, they were those who had reached the age for
the old age pension and received the (social) assistance pension
or compensation under the Law on (Social) Assistance Pensions,
they were those who received the state social insurance pension
from a country, with which the Republic of Lithuania has
concluded the international agreement, which had come into force,
they were in places of confinement, and they were those who
registered the status of a liquidated individual (personal)
enterprise or partnership in the Register of Enterprises, where
all the employees of the enterprise or partnership were dismissed
from work), who, however, were not pensioners of the State Social
Insurance Fund and were not insured by state social insurance
under laws of the Republic of Lithuania. It needs to be held that
the Vilnius Regional Administrative Court, the petitioner, does
not dispute the compliance of this regulation with the
Constitution.
7. Thus, the petition of the petitioner requesting to
investigate whether Item 1 of Paragraph 3, Paragraph 4 (and Items
1 and 7 thereof) of Article 34 (wording of 4 July 2002) of the
Law are not in conflict with Paragraph 2 of Article 29, Article
52 of the Constitution and the constitutional principles of
justice and a state under the rule of law is to be treated as the
petition requesting to investigate whether the following was not
in conflict with Paragraph 2 of Article 29, Article 52 of the
Constitution and the constitutional principles of justice and a
state under the rule of law:
- Item 1 (which, as mentioned, provided that state social
insurance contributions of the owners of individual (personal)
enterprises, tenants of individual (personal) enterprises,
advocates, assistants of advocates, notaries, members of general
partnerships, actual members of commandite partnerships are paid
for the basic pension and the supplementary part of the pension
under procedure and terms established by the Government; the
contributions to the supplementary part of the pension are paid
from the annual sum (chosen by themselves) of the income declared
to state social insurance, while this sum may not be smaller than
12 MMS; the persons enumerated in this item are insured for the
supplementary part of the pension only in the case that the
annual sum of income of the owners of individual (personal)
enterprises, tenants of individual (personal) enterprises,
advocates, assistants of advocates, members of general
partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of notaries,
calculated from the taxed income that is calculated on the basis
of the Provisional Law on Income Tax of Natural Persons, by
subtracting the tax sum of the tax of the income of natural
persons of the tax year, is equal to or is bigger than 12 MMS) of
Paragraph 3;
- the provision "it is permitted that the state social
insurance contributions <
> be not paid (and this period will not
be included in the state social insurance period) only in the
cases when the annual sum of the income of the owners of
individual (personal) enterprises, tenants of individual
(personal) enterprises, advocates, assistants of advocates,
members of general partnerships, actual members of commandite
partnerships, calculated from the taxed income that is calculated
under the Law on Income Tax and by subtracting the sum of the tax
of the income of tax year, while the annual sum of the income of
notaries, calculated from the taxed income that is calculated on
the basis of the Provisional Law on Income Tax of Natural
Persons, by subtracting the tax sum of the tax of the income of
natural persons of the tax year, is smaller than 12 minimum
monthly salaries, and the said persons are: (1) pensioners of the
State Social Insurance Fund" of Paragraph 4;
- the provision "it is permitted that the state social
insurance contributions <
> be not paid (and this period will not
be included in the state social insurance period) only in the
cases when the annual sum of the income of the owners of
individual (personal) enterprises, tenants of individual
(personal) enterprises, advocates, assistants of advocates,
members of general partnerships, actual members of commandite
partnerships, calculated from the taxed income that is calculated
under the Law on Income Tax and by subtracting the sum of the tax
of the income of tax year, while the annual sum of the income of
notaries, calculated from the taxed income that is calculated on
the basis of the Provisional Law on Income Tax of Natural
Persons, by subtracting the tax sum of the tax of the income of
natural persons of the tax year, is smaller than 12 minimum
monthly salaries, and the said persons are: <
> (7) insured by
state social insurance under laws of the Republic of Lithuania"
of Paragraph 4.
8. Under Item 1 of Paragraph 3 and Paragraph 4 of Article
34 (wording of 4 July 2002) of the Law (to the extent disputed by
the Vilnius Regional Administrative Court, the petitioner), the
duty of the corresponding self-employed person to pay state
social insurance contributions depended on the income that he
received and which was insured by state social insurance, as well
as on the legal situation of the person, i.e. on whether he met
one or several conditions specified in Paragraph 4 of Article 34
(wording of 4 July 2002) of the Law.
9. The Vilnius Regional Administrative Court, the
petitioner, questions the compliance of Item 1 of Paragraph 3 of
Article 34 (wording of 4 July 2002) of the Law and that of the
disputed provisions of Paragraph 4 of the same article with
Article 52 of the Constitution in the aspect that a duty to pay
state social insurance contributions to the basic and
supplementary parts of the pension is established with regard to
those advocates (as well as other self-employed persons specified
in the said paragraphs) who are pensioners of the State Social
Insurance Fund or who are insured by state social insurance under
laws of the Republic of Lithuania, provided their annual sum
(calculated in the manner specified in these not paragraphs) of
the income declared for their state social insurance is not
smaller than 12 MMS.
10. While deciding, subsequent to the petitions (Nos. 1B-
43/2004 and 1B-45/2004) of the Vilnius Regional Administrative
Court, the petitioner, whether Item 1 of Paragraph 3 of Article
34 (wording of 4 July 2002) of the Law and the disputed
provisions of Paragraph 4 of the same article were not in
conflict with Article 52 of the Constitution, it needs to be held
that there is not a single provision specified in Items 5 and 7
of Chapter IV of the reasoning part of this Constitutional Court
ruling that denies the fact that the persons who meet the grounds
of awarding and payment of the old age pension will receive the
pension of the established sized and under established procedure.
Thus, there are not any legal grounds to assert that,
allegedly, the legal regulation established in Item 1 of
Paragraph 3 and Paragraph 4 of Article 34 (wording of 4 July
2002) of the Law denied the constitutional duty of the state to
guarantee the right of citizens to receive the old age pension,
or the constitutional duty of the state to guarantee social
security of the other type that is established in Article 52 of
the Constitution.
11. Taking account of the arguments set forth, one is to
draw a conclusion that Item 1 of Paragraph 3 of Article 34
(wording of 4 July 2002) of the Law and the provisions "it is
permitted that the state social insurance contributions <
> be
not paid (and this period will not be included in the state
social insurance period) only in the cases when the annual sum of
the income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, advocates,
assistants of advocates, members of general partnerships, actual
members of commandite partnerships, calculated from the taxed
income that is calculated under the Law on Income Tax and by
subtracting the sum of the tax of the income of tax year, while
the annual sum of the income of notaries, calculated from the
taxed income that is calculated on the basis of the Provisional
Law on Income Tax of Natural Persons, by subtracting the tax sum
of the tax of the income of natural persons of the tax year, is
smaller than 12 minimum monthly salaries, and the said persons
are: (1) pensioners of the State Social Insurance Fund" and "it
is permitted that the state social insurance contributions <
> be
not paid (and this period will not be included in the state
social insurance period) only in the cases when the annual sum of
the income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, advocates,
assistants of advocates, members of general partnerships, actual
members of commandite partnerships, calculated from the taxed
income that is calculated under the Law on Income Tax and by
subtracting the sum of the tax of the income of tax year, while
the annual sum of the income of notaries, calculated from the
taxed income that is calculated on the basis of the Provisional
Law on Income Tax of Natural Persons, by subtracting the tax sum
of the tax of the income of natural persons of the tax year, is
smaller than 12 minimum monthly salaries, and the said persons
are: <
> (7) insured by state social insurance under laws of the
Republic of Lithuania" of Paragraph 4 of the same article were
not in conflict with Article 52 of the Constitution.
12. The Vilnius Regional Administrative Court, the
petitioner, questions the compliance of Item 1 of Paragraph 3 of
Article 34 (wording of 4 July 2002) of the Law and that of the
disputed provisions of Paragraph 4 of the same article with
Paragraph 2 of Article 29 of the Constitution and the
constitutional principle of justice in the aspect that, in its
opinion, the advocates (as well as the other self-employed
persons specified in these paragraphs) are treated unequally, one
group of advocates is distinguished against another one and is
discriminated: some advocates who are pensioners of the State
Social Insurance Fund, may be exempted from payment of social
insurance contributions in cases the annual sum of their income
is smaller than 12 MMS, while other advocates who are pensioners
of the State Social Insurance Fund in cases the annual sum of
their income is equal to or bigger than 12 MMS must pay social
insurance contributions to the supplementary part of the pension;
in addition, according to the petitioner, "it is unfair to demand
that the persons who are insured by social insurance and who have
income, pay the said contributions, and to exempt the persons,
who are insured by social insurance but who do not have income,
from the said contributions."
13. It has been mentioned that the legislator not only may,
but also must establish the legal regulation which would create
preconditions for the state to implement its constitutional
obligation to guarantee the right to social security to citizens,
to ensure the accumulation of the funds necessary for pensions
and social assistance and the payment of these pensions and
rendition of social assistance. The said legal regulation should
create preconditions to distribute (by taking account inter alia
of the constitutional principle of solidarity, the constitutional
imperatives of social harmony and justice) the corresponding
burden that has fallen upon the state among members of society,
however, it must be distributed in such a manner that the
fulfilment of the duty to pay state social insurance
contributions would not become an overly heavy burden and the
person, due to the fact that he is fulfilling this duty, would
not become the one who needs social assistance.
While the duty is established to working persons (those who
pursue active economic activities) to pay state social insurance
contributions, various conditions are possible, which determine
the appearance of this duty, as well as various criteria defining
these conditions are possible. It goes without saying, it is also
possible to relate the payment of state social insurance
contributions with the fact that the person receives the insured
income and it is possible to establish, by means of a law, the
corresponding minimum size of such income; in the context of the
constitutional justice case at issue, it needs to be emphasised
that this size can also be equal to the MMS. Taking account of
this, one is to note that the per definitionem purpose of the
legal institute of the minimum monthly salary is establishment
and consolidation (in legal acts) of such minimum monthly
remuneration for work of a working person which, when paid
periodically, would permit to ensure minimum socially accepted
needs of the said person and of the family members who are
dependent on him (Constitutional Court ruling of 20 March 2007 of
the Constitutional Court).
It also needs to be mentioned that in the course of
establishing the minimum size of the received insured income,
when receiving which there appears a duty to pay state social
insurance contributions, one seeks to attain constitutionally
important objectives (especially, if the said size is equal to
the MMS which, as mentioned, when paid periodically, would permit
to ensure minimum socially accepted needs of the said person and
of the family members who are dependent on him): on the one hand,
one seeks to create preconditions to form the State Social
Insurance Fund so that the state would be materially capable of
rendering social assistance and guaranteeing social security; on
the other hand, it is sought that the duty to pay state social
insurance contributions would not become an overly heavy burden
for the persons who receive very little income and these persons
themselves, due to the fact that they are fulfilling this duty,
would not become the ones who need social assistance. Thus, there
are two groups of working persons: those who must pay state
social insurance contributions and those who are exempted from
state social insurance contributions. These persons are grouped
on the objective basis, which is the size of the received insured
income. Such grouping neither discriminates anyone, nor
establishes any privileges.
14. It is precisely such legal regulation established in
Item 1 of Paragraph 3 of Article 34 (wording of 4 July 2002) of
the Law and the disputed provisions of Paragraph 4 of the same
article that raised doubts to the Vilnius Regional Administrative
Court, the petitioner.
15. Taking account of the arguments set forth, one is to
hold that Item 1 of Paragraph 3 of Article 34 (wording of 4 July
2002) of the Law and the provision "it is permitted that the
state social insurance contributions <
> be not paid (and this
period will not be included in the state social insurance period)
only in the cases when the annual sum of the income of the owners
of individual (personal) enterprises, tenants of individual
(personal) enterprises, advocates, assistants of advocates,
notaries, members of general partnerships, actual members of
commandite partnerships, calculated from the taxed income that is
calculated under the Law on Income Tax and by subtracting the sum
of the tax of the income of tax year, while the annual sum of the
income of notaries, calculated from the taxed income that is
calculated on the basis of the Provisional Law on Income Tax of
Natural Persons, by subtracting the tax sum of the tax of the
income of natural persons of the tax year, is smaller than 12
minimum monthly salaries, and the said persons are: (1)
pensioners of the State Social Insurance Fund" and "it is
permitted that the state social insurance contributions <
> be
not paid (and this period will not be included in the state
social insurance period) only in the cases when the annual sum of
the income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, advocates,
assistants of advocates, notaries, members of general
partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of notaries,
calculated from the taxed income that is calculated on the basis
of the Provisional Law on Income Tax of Natural Persons, by
subtracting the tax sum of the tax of the income of natural
persons of the tax year, is smaller than 12 minimum monthly
salaries, and the said persons are: <
> (7) insured by state
social insurance under laws of the Republic of Lithuania" of
Paragraph 4 of the same paragraph were not in conflict with
Paragraph 2 of Article 29 of the Constitution and the
constitutional principle of justice.
16. Having held that Item 1 of Paragraph 3 of Article 34
(wording of 4 July 2002) of the Law and the provision "it is
permitted that the state social insurance contributions <
> be
not paid (and this period will not be included in the state
social insurance period) only in the cases when the annual sum of
the income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, advocates,
assistants of advocates, notaries, members of general
partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of notaries,
calculated from the taxed income that is calculated on the basis
of the Provisional Law on Income Tax of Natural Persons, by
subtracting the tax sum of the tax of the income of natural
persons of the tax year, is smaller than 12 minimum monthly
salaries, and the said persons are: (1) pensioners of the State
Social Insurance Fund" and it is permitted that the state social
insurance contributions <
> be not paid (and this period will not
be included in the state social insurance period) only in the
cases when the annual sum of the income of the owners of
individual (personal) enterprises, tenants of individual
(personal) enterprises, advocates, assistants of advocates,
notaries, members of general partnerships, actual members of
commandite partnerships, calculated from the taxed income that is
calculated under the Law on Income Tax and by subtracting the sum
of the tax of the income of tax year, while the annual sum of the
income of notaries, calculated from the taxed income that is
calculated on the basis of the Provisional Law on Income Tax of
Natural Persons, by subtracting the tax sum of the tax of the
income of natural persons of the tax year, is smaller than 12
minimum monthly salaries, and the said persons are: <
> (7)
insured by state social insurance under laws of the Republic of
Lithuania" of Paragraph 4 of the same paragraph were not in
conflict with Paragraph 2 of Article 29, Article 52 of the
Constitution and the constitutional principle of justice, one is
also to hold that Item 1 of Paragraph 3 of Article 34 (wording of
4 July 2002) of the Law and the said provisions of Paragraph 4 of
the same article were not in conflict with the constitutional
principle of a state under the rule of law.
V
On the compliance of Item 1 of Paragraph 3, Item 1 of
Paragraph 4 of Article 34 (wording of 7 October 2003) of the Law
on State Social Insurance with Paragraph 2 of Article 29,
Paragraph 1 of Article 48, Article 52 of the Constitution and the
constitutional principles of justice and a state under the rule
of law.
1. As mentioned, the Vilnius Regional Administrative Court,
the petitioner, requests to investigate whether Item 1 of
Paragraph 3 and Item 1 of Paragraph 4 of Article 34 (wording of 7
October 2003) of the Law to the extent that, according to the
petitioner, it is established (in both items) that those self-
employed persons who receive old age social insurance pensions
must pay social insurance contributions in order to receive the
main part and the supplementary part of the pension and that this
obligation is related with 12 minimum monthly salaries calculated
under procedure established by the law, are not in conflict with
Paragraph 2 of Article 29, Paragraph 1 of Article 48, Article 52
of the Constitution and the constitutional principles of justice
and a state under the rule of law (petition No. 1B-63/2006).
2. It was established in Paragraph 3 of Article 34 (wording
of 7 October 2003) of the Law:
"The state social insurance contributions of the persons
enumerated in Items 6 and 8 of Paragraph 1 of Article 4 of this
Law shall be paid in the following manner: individual (personal)
enterprises pay the contributions for the owners and tenants of
these enterprises, general partnership pay for their members,
commandite partnerships pay for their actual members, while the
persons who are engaged in individual activities in pursuance
with the Law on Personal Income Tax pay state social insurance
contributions themselves:
1) state social insurance contributions of the owners of
individual (personal) enterprises, tenants of individual
(personal) enterprises, members of general partnerships, actual
members of commandite partnerships, as well as the persons who
are engaged in individual activities save those who earn their
living while holding business certificates, are paid for the
basic pension and the supplementary part of the pension under
procedure and terms established by the Government. The
contributions to the supplementary part of the pension are paid
from the annual sum (chosen by themselves) of the income declared
to state social insurance, while this sum may not be smaller than
12 minimum monthly salaries. The persons enumerated in this Item
are insured for the supplementary part of the pension only in the
case that the annual sum of income of the owners of individual
(personal) enterprises, tenants of individual (personal)
enterprises, members of general partnerships, actual members of
commandite partnerships, calculated from the taxed income that is
calculated under the Law on Income Tax and by subtracting the sum
of the tax of the income of tax year, while the annual sum of the
income of the persons who are engaged in individual activities
save those who earn their living while holding business
certificates, calculated from the taxed income that is calculated
on the basis of the Law on Personal Income Tax, by subtracting
the tax sum of the tax of the income of natural persons of the
tax year, is equal to or is bigger than 12 minimum monthly
salaries;
2) the persons who are engaged in individual activities
while holding business certificates, insure themselves for the
basic pension of state social insurance."
It was established in Paragraph 4 of Article 34 (wording of
7 October 2003) of the Law:
"It is permitted that the state social insurance
contributions of the persons enumerated in Item 6 of Paragraph 1
of Article 4 of this Law be not paid (and this period will not be
included in the state social insurance period) only in the cases
when the annual sum of the income of the owners of individual
(personal) enterprises, tenants of individual (personal)
enterprises, members of general partnerships, actual members of
commandite partnerships, calculated from the taxed income that is
calculated under the Law on Income Tax and by subtracting the sum
of the tax of the income of tax year, while the annual sum of the
income of the persons who are engaged in individual activities
save those who earn their living while holding business
certificates, calculated from the taxed income that is calculated
on the basis of the Law on Personal Income Tax, by subtracting
the tax sum of the tax of the income of natural persons of the
tax year, is smaller than 12 minimum monthly salaries, and the
said persons:
1) are pensioners of the State Social Insurance Fund;
2) are disabled persons of the I and II groups, who are
disabled from childhood and who receive the (social) assistance
pension;
3) are those who have reached the age for the old age
pension and receive the (social) assistance pension or
compensation under the Law on (Social) Assistance Pensions;
4) receive the state social insurance pension from a
country, with which the Republic of Lithuania has concluded the
international agreement, which has come into force;
5) are in places of confinement;
6) are those who registered the status of a liquidated
individual (personal) enterprise or partnership in the Register
of Enterprises, where all the employees of the enterprise or
partnership were dismissed from work;
7) are insured by state social insurance under laws of the
Republic of Lithuania."
3. The legal regulation established in Paragraphs 3 and 4
of Article 34 (wording of 7 October 2003) of the Law is to be
construed in the context of other provisions of this law; one
must inter alia take account of Paragraph 1 of Article 4 (wording
of 7 October 2003) of the Law, the provisions of which are
referred to in disputed Paragraphs 3 and 4 of Article 34 of the
Law.
It was inter alia established in Paragraph 1 of Article 4
(wording of 7 October 2003) of the Law:
"The following persons shall be insured by state social
insurance on a compulsory basis: <
>
6) the owners of individual (personal) enterprises, tenants
of individual (personal) enterprises, members of general
partnerships, actual members of commandite partnerships, as well
as the persons who are engaged in individual activities in
pursuance with the Law on Personal Income Tax, save the
individual activities which are pursued by those who possess
business certificates <
>."
It was inter alia established in Paragraph 3 of Article 4
(wording of 7 October 2003) of the Law: "The persons specified in
Items 3-14 of Paragraph 1 of Article 4 of this Law are insured by
state social pensions insurance (the persons specified in Item 6
are compulsorily ensured to the basic pension and the
supplementary part of the pension under procedure established in
Article 34 <
>)."
4. Under disputed Item 1 of Paragraph 3, Item 1 of
Paragraph 4 of Article 34 (wording of 7 October 2003) of the Law,
the owners of individual (personal) enterprises, tenants of
individual (personal) enterprises, members of general
partnerships, actual members of commandite partnerships, as well
as the persons who are engaged in individual activities in
pursuance with the Law on Personal Income Tax, save the
individual activities which are pursued by those who possess
business certificates (i.e. the self-employed persons specified
in Item 6 of Paragraph 1 of Article 4 (wording of 7 October 2003)
and Item 1 of Paragraph 3 of Article 34 (wording of 7 October
2003) of the Law):
- whose annual sum of income (calculated by subtracting the
sum of the of the tax of the annual income from the taxed income,
calculated under the Law on Income Tax, while the annual sum of
income of the persons who are engaged in individual activities
save those who earn their living while holding business
certificates, calculated from the taxed income calculated under
the Law on Personal Income Tax by subtracting the tax sum of the
tax of the income of natural persons of the tax year) declared to
the state social insurance was not smaller than 12 MMS, had to
pay state social insurance contributions both to the basic
pension and to the supplementary part of the pension; the
contributions to the supplementary part of the pension had to be
paid from the annual sum (chosen by these self-employed persons)
of the declared income to state social insurance, which could not
be smaller than 12 MMS; the corresponding period had to be
included into the state social insurance period;
- whose annual sum of income (calculated by subtracting the
sum of the of the tax of the annual income from the taxed income,
calculated under the Law on Income Tax, while the annual sum of
income of the persons who are engaged in individual activities
save those who earn their living while holding business
certificates, calculated from the taxed income calculated under
the Law on Personal Income Tax by subtracting the tax sum of the
tax of the income of natural persons of the tax year) declared to
the state social insurance was smaller than 12 MMS, who were not
pensioners of the State Social Insurance Fund (and did not meet
any other of the conditions specified in Paragraph 4 of Article
34 (wording of 7 October 2003) of the Law, i.e. they were not
disabled persons of the I and II groups, who had been disabled
from childhood and who received the (social) assistance pension,
they were not those who had reached the age for the old age
pension and received the (social) assistance pension or
compensation under the Law on (Social) Assistance Pensions of the
Republic of Lithuania, they were not those who received the state
social insurance pension from a country, with which the Republic
of Lithuania has concluded the international agreement, which had
come into force, they were not in places of confinement, they
were not those who registered the status of a liquidated
individual (personal) enterprise or partnership in the Register
of Enterprises, where all the employees of the enterprise or
partnership were dismissed from work, and they were not insured
by state social insurance under the laws of the Republic of
Lithuania) had to pay state social insurance contributions to the
basic pension; the corresponding period had to be included into
the state social insurance period;
- whose annual sum of income (calculated by subtracting the
sum of the of the tax of the annual income from the taxed income,
calculated under the Law on Income Tax, while the annual sum of
income of the persons who are engaged in individual activities
save those who earn their living while holding business
certificates, calculated from the taxed income calculated under
the Law on Personal Income Tax by subtracting the tax sum of the
tax of the income of natural persons of the tax year) declared to
the state social insurance was smaller than 12 MMS, and who were
pensioners of the State Social Insurance Fund (and/or met one or
several of the other conditions specified in Paragraph 4 of
Article 34 (wording of 7 October 2003) of the Law, i.e. they were
disabled persons of the I and II groups, who had been disabled
from childhood and who received the (social) assistance pension,
they were those who had reached the age for the old age pension
and received the (social) assistance pension or compensation
under the Law on (Social) Assistance Pensions, they were those
who received the state social insurance pension from a country,
with which the Republic of Lithuania has concluded the
international agreement, which had come into force, they were in
places of confinement, they were those who registered the status
of a liquidated individual (personal) enterprise or partnership
in the Register of Enterprises, where all the employees of the
enterprise or partnership were dismissed from work, and they were
insured by state social insurance under the laws of the Republic
of Lithuania) were exempted from the payment of state social
insurance contributions (both to the basic pension and to the
supplementary part of the pension).
5. The Vilnius Regional Administrative Court, the
petitioner, questions the compliance of Item 1 of Paragraph 3 and
Item 1 of Paragraph 4 of Article 34 (wording of 7 October 2003)
of the Law (to the extent specified by the petitioner) with the
Constitution in the aspect that, in its opinion, the persons who
do not work and receive old age pensions according to
corresponding legal regulation and the persons who receive old
age pensions, but who work at the same time and receive
additional income (i.e. self-employed persons), find themselves
in an unequal legal situation and this restricts the right of the
persons who receive social insurance old age pensions to freely
choose a job and business.
6. Thus, the petition of the petitioner requesting to
investigate whether Item 1 of Paragraph 3 and Item 1 of Paragraph
4 of Article 34 (wording of 7 October 2003) of the Law are not in
conflict with Paragraph 2 of Article 29, Paragraph 1 of Article
48, Article 52 of the Constitution and the constitutional
principles of justice and a state under the rule of law is to be
treated as the petition requesting to investigate whether the
following was not in conflict with Paragraph 2 of Article 29,
Paragraph 1 of Article 48, Article 52 of the Constitution and the
constitutional principles of justice and a state under the rule
of law:
- Item 1 (which, as mentioned, provided that state social
insurance contributions of the owners of individual (personal)
enterprises, tenants of individual (personal) enterprises,
members of general partnerships, actual members of commandite
partnerships, as well as the persons who are engaged in
individual activities save those who earn their living while
holding business certificates, are paid for the basic pension and
the supplementary part of the pension under procedure and terms
established by the Government. The contributions to the
supplementary part of the pension are paid from the annual sum
(chosen by themselves) of the income declared to state social
insurance, while this sum may not be smaller than 12 MMS. The
persons enumerated in this Item are insured for the supplementary
part of the pension only in the case that the annual sum of
income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, members of general
partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of the persons
who are engaged in individual activities save those who earn
their living while holding business certificates, calculated from
the taxed income that is calculated on the basis of the Law on
Personal Income Tax, by subtracting the tax sum of the tax of the
income of natural persons of the tax year, is equal to or is
bigger than 12 minimum monthly salaries) of Paragraph 3 of
Article 34 (wording of 7 October 2003) of the Law;
- the provision "it is permitted that the state social
insurance contributions of the persons enumerated in Item 6 of
Paragraph 1 of Article 4 of this Law be not paid (and this period
will not be included in the state social insurance period) only
in the cases when the annual sum of the income of the owners of
individual (personal) enterprises, tenants of individual
(personal) enterprises, members of general partnerships, actual
members of commandite partnerships, calculated from the taxed
income that is calculated under the Law on Income Tax and by
subtracting the sum of the tax of the income of tax year, while
the annual sum of the income of the persons who are engaged in
individual activities save those who earn their living while
holding business certificates, calculated from the taxed income
that is calculated on the basis of the Law on Personal Income
Tax, by subtracting the tax sum of the tax of the income of
natural persons of the tax year, is smaller than 12 minimum
monthly salaries, and the said persons are: (1) pensioners of the
State Social Insurance Fund" of Paragraph 4 of Article 34
(wording of 7 October 2003) of the Law.
7. While deciding, subsequent to the petition (No. 1B-63/
2006) of the Vilnius Regional Administrative Court, the
petitioner, whether Item 1 of Paragraph 3 of Article 34 (wording
of 7 October 2003) of the Law and the disputed provisions of
Paragraph 4 of the same article were not in conflict with
Paragraph 1 of Article 48 of the Constitution, it needs to be
held that there is not a single provision specified in Items 4
and 6 of Chapter V of the reasoning part of this Constitutional
Court ruling that regulated the relations linked with the right
of persons to choose a certain job and/or engage in certain
business; thus, these provisions did not limit this right in any
way, let alone prohibited its implementation.
8. Taking account of the arguments set forth, one is to
draw a conclusion that Item 1 of Paragraph 3 and of Article 34
(wording of 7 October 2003) of the Law and the provision "it is
permitted that the state social insurance contributions <
> be
not paid (and this period will not be included in the state
social insurance period) only in the cases when the annual sum of
the income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, members of general
partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of the persons
who are engaged in individual activities save those who earn
their living while holding business certificates, calculated from
the taxed income that is calculated on the basis of the Law on
Personal Income Tax, by subtracting the tax sum of the tax of the
income of natural persons of the tax year, is smaller than 12
minimum monthly salaries, and the said persons are: (1)
pensioners of the State Social Insurance Fund" of Item 1 of
Paragraph 4 of the same article were not in conflict with
Paragraph 1 of Article 48 of the Constitution.
9. It needs to be noted that the legal regulation (when it
is construed systemically) established in Item 1 of Paragraph 3
and Paragraph 4 of Article 34 (wording of 7 October 2003) of the
Law (to the extent that it is disputed by the Vilnius Regional
Administrative Court, the petitioner), in the aspect that the
compliance of this legal regulation with the Constitution is
disputed by the petitioner, was identical to the legal regulation
that was established in Item 1 of Paragraph 3 and Item 1 of
Article 34 (wording of 4 July 2002) of the Law and in the
provision "it is permitted that the state social insurance
contributions <
> be not paid (and this period will not be
included in the state social insurance period) only in the cases
when the annual sum of the income of the owners of individual
(personal) enterprises, tenants of individual (personal)
enterprises, advocates, assistants of advocates, members of
general partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of notaries,
calculated from the taxed income that is calculated on the basis
of the Provisional Law on Income Tax of Natural Persons, by
subtracting the tax sum of the tax of the income of natural
persons of the tax year, is smaller than 12 minimum monthly
salaries, and the said persons are: (1) pensioners of the State
Social Insurance Fund" of Paragraph 4 of the same article.
10. It has been held in this Constitutional Court ruling
that Item 1 of Paragraph 3 of Article 34 (wording of 4 July 2002)
of the Law and the provision "it is permitted that the state
social insurance contributions <
> be not paid (and this period
will not be included in the state social insurance period) only
in the cases when the annual sum of the income of the owners of
individual (personal) enterprises, tenants of individual
(personal) enterprises, advocates, assistants of advocates,
members of general partnerships, actual members of commandite
partnerships, calculated from the taxed income that is calculated
under the Law on Income Tax and by subtracting the sum of the tax
of the income of tax year, while the annual sum of the income of
notaries, calculated from the taxed income that is calculated on
the basis of the Provisional Law on Income Tax of Natural
Persons, by subtracting the tax sum of the tax of the income of
natural persons of the tax year, is smaller than 12 minimum
monthly salaries, and the said persons are: (1) pensioners of the
State Social Insurance Fund" of Paragraph 4 of the same article
were not in conflict with Paragraph 2 of Article 29, Article 52
of the Constitution and the constitutional principles of justice
and a state under the rule of law.
11. On the grounds of the arguments which are analogous to
those due to which the conclusion was made in this Constitutional
Court ruling that Item 1 of Paragraph 3 of Article 34 (wording of
4 July 2002) of the Law and the provision "it is permitted that
the state social insurance contributions <
> be not paid (and
this period will not be included in the state social insurance
period) only in the cases when the annual sum of the income of
the owners of individual (personal) enterprises, tenants of
individual (personal) enterprises, advocates, assistants of
advocates, members of general partnerships, actual members of
commandite partnerships, calculated from the taxed income that is
calculated under the Law on Income Tax and by subtracting the sum
of the tax of the income of tax year, while the annual sum of the
income of notaries, calculated from the taxed income that is
calculated on the basis of the Provisional Law on Income Tax of
Natural Persons, by subtracting the tax sum of the tax of the
income of natural persons of the tax year, is smaller than 12
minimum monthly salaries, and the said persons are: (1)
pensioners of the State Social Insurance Fund" of Paragraph 4 of
the same article were not in conflict with Paragraph 2 of Article
29, Article 52 of the Constitution and the constitutional
principles of justice and a state under the rule of law, one is
also to draw a conclusion that Item 1 of Paragraph 3 and of
Article 34 (wording of 7 October 2003) of the Law and the
provision "it is permitted that the state social insurance
contributions <
> be not paid (and this period will not be
included in the state social insurance period) only in the cases
when the annual sum of the income of the owners of individual
(personal) enterprises, tenants of individual (personal)
enterprises, members of general partnerships, actual members of
commandite partnerships, calculated from the taxed income that is
calculated under the Law on Income Tax and by subtracting the sum
of the tax of the income of tax year, while the annual sum of the
income of the persons who are engaged in individual activities
save those who earn their living while holding business
certificates, calculated from the taxed income that is calculated
on the basis of the Law on Personal Income Tax, by subtracting
the tax sum of the tax of the income of natural persons of the
tax year, is smaller than 12 minimum monthly salaries, and the
said persons are: (1) pensioners of the State Social Insurance
Fund" of Item 1 of Paragraph 4 of the same article were not in
conflict with Paragraph 2 of Article 29, Article 52 of the
Constitution and the constitutional principles of justice and a
state under the rule of law, either.
VI
On the compliance of Paragraph 3 of Article 4 and Item 8 of
Paragraph 2 of Article 8 of the Law on State Social Insurance
(wording of 4 November 2004) with Paragraph 2 of Article 29,
Paragraph 1 of Article 48, Article 52 of the Constitution and the
constitutional principles of justice and a state under the rule
of law.
1. It was mentioned that the Vilnius Regional
Administrative Court, the petitioner, requests to investigate
whether Paragraph 3 of Article 4 (wording of 4 November 2004),
Item 1 of Paragraph 2 of Article 8 (wording of 4 November 2004)
of the Law, both to the extent that, according to the petitioner,
it is established that those self-employed persons who receive
old age social insurance pensions must pay social insurance
contributions in order to receive the main part and the
supplementary part of the pension and that this obligation of
self-employed persons to pay social insurance contributions to
the main part and the supplementary part of the pension is
related with 12 MMS calculated under procedure established by the
law, are not in conflict with Paragraph 2 of Article 29,
Paragraph 1 of Article 48, Article 52 of the Constitution of the
Republic of Lithuania and the constitutional principles of
justice and a state under the rule of law (petition No. 1B-63/
2006).
2. Paragraph 3 of Article 4 (wording of 4 November 2004) of
the Law provides:
"Self-employed persons, with the exception of the persons
engaged in individual activities under business certificates,
shall be covered on a compulsory basis only by pension social
insurance to receive the main and supplementary parts of a
pension. These persons shall be insured on a compulsory basis to
receive the supplementary part of the pension where the annual
sum of their income as calculated by deducting the sum of income
tax for the tax year from the taxable profit calculated according
to the Law on Income Tax or the annual sum of income as
calculated by deducting the sum of income tax for the tax year
from the taxable income calculated according to the Law on
Personal Income Tax is equal to or exceeds the amount of 12
minimum monthly salaries. Where the persons listed in this
paragraph are covered by pension social insurance to receive the
supplementary part of a pension, they may take out insurance for
the pension benefits provided for in the Law on the Accumulation
of Pensions."
Paragraph 2 of Article 8 (wording of 4 November 2004) of
the Law provides:
"The persons indicated in Paragraph 3 of Article 4 of this
Law shall be allowed not to pay social insurance contributions
(this period will not be included in social insurance period)
only where the annual sum of income of these persons as
calculated by deducting the sum of (personal) income tax for the
tax year from the taxable (personal) income calculated under the
Law on Income Tax (the Law on Personal Income Tax) is less than
the sum of 12 minimum monthly salaries and these persons:
1) receive the social insurance old age or social insurance
work disability pension as awarded under the Law on State Social
Insurance Pensions;
2) receive the social assistance pension or compensation,
with the exception of the orphan's social assistance pension
awarded under the Law on State Social Assistance Benefits;
3) receive the old age or work disability pension related
to social insurance relations (social insurance pension) from an
EU Member State and from a state with which the Republic of
Lithuania has concluded an international agreement on social
security;
4) are in places of confinement or have been imposed, by a
court's judgement in accordance with the procedure laid down by
the Criminal Code, compulsory medical treatment measures of in-
patient observation or reformative sanctions in specialised
mental health care institutions;
5) have registered the status of a liquidated individual
(personal) enterprise or partnership in the Register of Legal
Persons, where all the employees of the enterprise or partnership
were dismissed from work;
6) are compulsorily covered by social insurance under laws
of the Republic of Lithuania;
7) have the obligatory social insurance period to receive
the social insurance old age pension under the Law on State
Social Insurance Pensions."
3. The legal regulation established in Paragraph 3 of
Article 4 (wording of 4 November 2004), Item 1 of Paragraph 2 of
Article 8 (wording of 4 November 2004) of the Law is to be
construed in the context of other provisions of this law; one
must inter alia take account of Paragraph 8 (wording of 4
November 2004) of Article 2 of the Law wherein the notion of
self-employed persons is defined, as well as of Paragraph 1 of
Article 6 (wording of 4 November 2004) and Paragraph 2 of Article
7 (wording of 4 November 2004) of the Law.
Paragraph 8 (wording of 4 November 2004) of Article 2 of
the Law provides: "Self-employed persons mean owners of
individual enterprises, members of general partnerships, actual
members of commandite partnerships; the persons who are engaged
in individual activities as defined in the Law on Personal Income
Tax (advocates, assistants of advocates, notaries, bailiffs, the
persons holding business certificates and other persons)."
Paragraph 1 of Article 6 (wording of 4 November 2004) of
the Law inter alia provides: "Social insurance period of self-
employed persons shall be established according to the periods
for which social insurance contributions have been paid."
Paragraph 2 of Article 7 (wording of 4 November 2004) of
the Law provides:
"The social insurance contributions of the persons
indicated in Paragraph 3 of Article 4 of this Law to receive the
supplementary part of a pension shall be calculated from the
annual sum of income as selected by them and declared for social
insurance. It may not be less than the amount of 12 minimum
monthly salaries over a calendar year."
4. Under Paragraph 3 of Article 4 (wording of 4 November
2004) and Item 1 of Paragraph 2 of Article 8 (wording of 4
November 2004) of the Law, the self employed persons:
- whose annual sum of income (calculated by subtracting the
sum of the of the tax of the annual income from the taxed income,
calculated under the Law on Income Tax, or calculated from the
taxed income calculated under the Law on Personal Income Tax by
subtracting the tax sum of the tax of the income of the tax year)
declared to the state social insurance is not smaller than 12
MMS, have to pay state social insurance contributions both to the
main part and to the supplementary part of the pension; the
contributions to the supplementary part of the pension have to be
paid from the annual sum (chosen by these self-employed persons)
of the declared income to state social insurance, which cannot be
smaller than 12 MMS; the corresponding period has to be included
into the state social insurance period;
- whose annual sum of income (calculated by subtracting the
sum of the of the tax of the annual income from the taxed income,
calculated under the Law on Income Tax, or calculated from the
taxed income calculated under the Law on Personal Income Tax by
subtracting the tax sum of the tax of the income of natural
persons of the tax year) declared to the state social insurance
is smaller than 12 MMS, who do not receive the social insurance
old age pension or social insurance disability pension awarded
under the Law on State Social Insurance Pensions (and do not meet
any other of the conditions specified in Paragraph 4 of Article 8
(wording of 4 November 2004) of the Law, i.e. they do not receive
the assistance pension or compensation save the assistance
pension of orphans awarded under the Law on State Social
Insurance Benefits; they do not receive the old age or work
disability pension related to social insurance relations (social
insurance pension) from an EU Member State and from a state with
which the Republic of Lithuania has concluded an international
agreement on social security; they are not in places of
confinement and they have not been imposed, by a court's
judgement in accordance with the procedure laid down by the
Criminal Code, compulsory medical treatment measures of in-
patient observation or reformative sanctions in specialised
mental health care institution; they are not those who registered
the status of a liquidated individual (personal) enterprise or
partnership in the Register of Legal Persons, where all the
employees of the enterprise or partnership were dismissed from
work; they are not compulsorily covered by social insurance under
laws of the Republic of Lithuania; they do not have the
obligatory social insurance period to receive the social
insurance old age pension under the Law on State Social Insurance
Pensions) have to pay state social insurance contributions to the
main part of the pension; the corresponding period has to be
included into the state social insurance period;
- whose annual sum of income (calculated by subtracting the
sum of the of the tax of the annual income from the taxed income,
calculated under the Law on Income Tax, or calculated from the
taxed income calculated under the Law on Personal Income Tax by
subtracting the tax sum of the tax of the income of the tax year)
declared to the state social insurance is smaller than 12 MMS and
who receive the social insurance old age pension or social
insurance disability pension awarded under the Law on State
Social Insurance Pensions (and/or meet any other of the
conditions specified in Paragraph 4 of Article 8 (wording of 4
November 2004) of the Law, i.e. they receive the assistance
pension or compensation save the assistance pension of orphans
awarded under the Law on State Social Insurance Benefits; they
receive the old age or work disability pension related to social
insurance relations (social insurance pension) from an EU Member
State and from a state with which the Republic of Lithuania has
concluded an international agreement on social security; they are
in places of confinement and they have been imposed, by a court's
judgement in accordance with the procedure laid down by the
Criminal Code, compulsory medical treatment measures of in-
patient observation or reformative sanctions in specialised
mental health care institution; they are those who registered the
status of a liquidated individual (personal) enterprise or
partnership in the Register of Legal Persons, where all the
employees of the enterprise or partnership were dismissed from
work; they are compulsorily covered by social insurance under
laws of the Republic of Lithuania; they have the obligatory
social insurance period to receive the social insurance old age
pension under the Law on State Social Insurance Pensions) are
exempted from the payment of state social insurance contributions
(both to the basic pension and to the supplementary part of the
pension).
5. The Vilnius Regional Administrative Court, the
petitioner, disputes the compliance of the provisions of
Paragraph 3 of Article 4 (wording of 4 November 2004), Item 1 of
Paragraph 2 of Article 8 (wording of 4 November 2004) of the Law
with the Constitution in the aspect that, in its opinion, the
Constitution allegedly does not permit to demand that those self-
employed persons who receive the old age pension must continue to
pay contributions for the main and supplementary parts of the
pension.
6. Thus, the petition of the petitioner requesting to
investigate whether Paragraph 3 of Article 4 (wording of 4
November 2004), Item 1 of Paragraph 2 of Article 8 (wording of 4
November 2004) of the Law (to the extent disputed by the Vilnius
Regional Administrative Court, the petitioner) are not in
conflict with Paragraph 2 of Article 29, Paragraph 1 of Article
48, Article 52 of the Constitution and the constitutional
principles of justice and a state under the rule of law, is to be
treated as the petition requesting to investigate whether the
following is not in conflict with Paragraph 2 of Article 29,
Paragraph 1 of Article 48, Article 52 of the Constitution and the
constitutional principles of justice and a state under the rule
of law:
- the provisions "self-employed persons, with the exception
of the persons engaged in individual activities under business
certificates, shall be covered on a compulsory basis only by
pension social insurance to receive the main and supplementary
parts of a pension" and "these persons shall be insured on a
compulsory basis to receive the supplementary part of the pension
where the annual sum of their income as calculated by deducting
the sum of income tax for the tax year from the taxable profit
calculated according to the Law on Income Tax or the annual sum
of income as calculated by deducting the sum of income tax for
the tax year from the taxable income calculated according to the
Law on Personal Income Tax is equal to or exceeds the amount of
12 minimum monthly salaries" of Paragraph 3 of Article 4 (wording
of 4 November 2004) of the Law;
- the provision "The persons indicated in Paragraph 3 of
Article 4 of this Law shall be allowed not to pay social
insurance contributions (this period will not be included in
social insurance period) only where the annual sum of income of
these persons as calculated by deducting the sum of (personal)
income tax for the tax year from the taxable (personal) income
calculated under the Law on Income Tax (the Law on Personal
Income Tax) is less than the sum of 12 minimum monthly salaries
and these persons: (1) receive the social insurance old age or
social insurance work disability pension as awarded under the Law
on State Social Insurance Pensions" of Paragraph 2 of Article 8
(wording of 4 November 2004) of the Law.
7. It needs to be noted that the legal regulation (when it
is construed systemically) consolidated in Paragraph 3 of Article
4 (wording of 4 November 2004) and Paragraph 2 of Article 8
(wording of 4 November 2004) of the Law (to the extent that it is
disputed by the Vilnius Regional Administrative Court, the
petitioner) in the aspect that the compliance of this legal
regulation with the Constitution is disputed by the petitioner,
is, regardless of the amendments made, identical to the legal
regulation that was established in Item 1 of Paragraph 3 of
Article 34 (wording of 4 July 2002) of the Law, the provision "it
is permitted that the state social insurance contributions <
> be
not paid (and this period will not be included in the state
social insurance period) only in the cases when the annual sum of
the income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, advocates,
assistants of advocates, members of general partnerships, actual
members of commandite partnerships, calculated from the taxed
income that is calculated under the Law on Income Tax and by
subtracting the sum of the tax of the income of tax year, while
the annual sum of the income of notaries, calculated from the
taxed income that is calculated on the basis of the Provisional
Law on Income Tax of Natural Persons, by subtracting the tax sum
of the tax of the income of natural persons of the tax year, is
smaller than 12 minimum monthly salaries, and the said persons
are: (1) pensioners of the State Social Insurance Fund" of
Paragraph 4 of the same article, and identical to the legal
regulation established in Item 1 of Paragraph 3 of Article 34
(wording of 7 October 2003) of the Law and the provision "it is
permitted that the state social insurance contributions <
> be
not paid (and this period will not be included in the state
social insurance period) only in the cases when the annual sum of
the income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, members of general
partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of the persons
who are engaged in individual activities save those who earn
their living while holding business certificates, calculated from
the taxed income that is calculated on the basis of the Law on
Personal Income Tax, by subtracting the tax sum of the tax of the
income of natural persons of the tax year, is smaller than 12
minimum monthly salaries, and the said persons are: (1)
pensioners of the State Social Insurance Fund" of Paragraph 4 of
the same article.
8. It has been held in this Constitutional Court ruling
that:
- Item 1 of Paragraph 3 of Article 34 (wording of 4 July
2002) of the Law and the provision "it is permitted that the
state social insurance contributions <
> be not paid (and this
period will not be included in the state social insurance period)
only in the cases when the annual sum of the income of the owners
of individual (personal) enterprises, tenants of individual
(personal) enterprises, advocates, assistants of advocates,
members of general partnerships, actual members of commandite
partnerships, calculated from the taxed income that is calculated
under the Law on Income Tax and by subtracting the sum of the tax
of the income of tax year, while the annual sum of the income of
notaries, calculated from the taxed income that is calculated on
the basis of the Provisional Law on Income Tax of Natural
Persons, by subtracting the tax sum of the tax of the income of
natural persons of the tax year, is smaller than 12 minimum
monthly salaries, and the said persons are: (1) pensioners of the
State Social Insurance Fund" of Paragraph 4 of the same article
were not in conflict with Paragraph 2 of Article 29, Article 52
of the Constitution and the constitutional principles of justice
and a state under the rule of law.
- Item 1 of Paragraph 3 of Article 34 (wording of 7 October
2003) of the Law and the provision "it is permitted that the
state social insurance contributions <
> be not paid (and this
period will not be included in the state social insurance period)
only in the cases when the annual sum of the income of the owners
of individual (personal) enterprises, tenants of individual
(personal) enterprises, members of general partnerships, actual
members of commandite partnerships, calculated from the taxed
income that is calculated under the Law on Income Tax and by
subtracting the sum of the tax of the income of tax year, while
the annual sum of the income of the persons who are engaged in
individual activities save those who earn their living while
holding business certificates, calculated from the taxed income
that is calculated on the basis of the Law on Personal Income
Tax, by subtracting the tax sum of the tax of the income of
natural persons of the tax year, is smaller than 12 minimum
monthly salaries, and the said persons are: (1) pensioners of the
State Social Insurance Fund" of Paragraph 4 of the same article
were not in conflict with Paragraph 2 of Article 29, Paragraph 1
of Article 48 and Article 52 of the Constitution and the
constitutional principles of justice and a state under the rule
of law.
9. On the grounds of the arguments which are analogous to
those due to which it was recognised in this Constitutional Court
ruling that Item 1 of Paragraph 3 of Article 34 (wording of 7
October 2003) of the Law and the provision "it is permitted that
the state social insurance contributions <
> be not paid (and
this period will not be included in the state social insurance
period) only in the cases when the annual sum of the income of
the owners of individual (personal) enterprises, tenants of
individual (personal) enterprises, members of general
partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of the persons
who are engaged in individual activities save those who earn
their living while holding business certificates, calculated from
the taxed income that is calculated on the basis of the Law on
Personal Income Tax, by subtracting the tax sum of the tax of the
income of natural persons of the tax year, is smaller than 12
minimum monthly salaries, and the said persons are: (1)
pensioners of the State Social Insurance Fund" of Paragraph 4 of
the same article were in conflict with Paragraph 1 of Article 48
of the Constitution, one is to draw a conclusion that the
provisions "self-employed persons, with the exception of the
persons engaged in individual activities under business
certificates, shall be covered on a compulsory basis only by
pension social insurance to receive the main and supplementary
parts of a pension" and "these persons shall be insured on a
compulsory basis to receive the supplementary part of the pension
where the annual sum of their income as calculated by deducting
the sum of income tax for the tax year from the taxable profit
calculated according to the Law on Income Tax or the annual sum
of income as calculated by deducting the sum of income tax for
the tax year from the taxable income calculated according to the
Law on Personal Income Tax is equal to or exceeds the amount of
12 minimum monthly salaries" of Paragraph 3 of Article 4 (wording
of 4 November 2004) of the Law and the provision "the persons
indicated in Paragraph 3 of Article 4 of this Law shall be
allowed not to pay social insurance contributions (this period
will not be included in social insurance period) only where the
annual sum of income of these persons as calculated by deducting
the sum of (personal) income tax for the tax year from the
taxable (personal) income calculated under the Law on Income Tax
(the Law on Personal Income Tax) is less than the sum of 12
minimum monthly salaries and these persons: (1) receive the
social insurance old age or social insurance work disability
pension as awarded under the Law on State Social Insurance
Pensions" of Paragraph 2 of Article 8 (wording of 4 November
2004) of the Law are not in conflict with Paragraph 1 of Article
48 of the Constitution, either.
10. On the grounds of the arguments which are analogous to
those due to which it was recognised in this Constitutional Court
ruling that Item 1 of Paragraph 3 and Item 1 of Article 34
(wording of 4 July 2002) of the Law, the provision "it is
permitted that the state social insurance contributions <
> be
not paid (and this period will not be included in the state
social insurance period) only in the cases when the annual sum of
the income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, advocates,
assistants of advocates, members of general partnerships, actual
members of commandite partnerships, calculated from the taxed
income that is calculated under the Law on Income Tax and by
subtracting the sum of the tax of the income of tax year, while
the annual sum of the income of notaries, calculated from the
taxed income that is calculated on the basis of the Provisional
Law on Income Tax of Natural Persons, by subtracting the tax sum
of the tax of the income of natural persons of the tax year, is
smaller than 12 minimum monthly salaries, and the said persons
are: (1) pensioners of the State Social Insurance Fund" of
Paragraph 4 of the same article were not in conflict with
Paragraph 2 of Article 29, Article 52 of the Constitution and the
constitutional principles of justice and a state under the rule
of law (and due to which it was recognised in this Constitutional
Court ruling that Item 1 of Paragraph 3 of Article 34 (wording of
7 October 2003) of the Law and the provision "it is permitted
that the state social insurance contributions <
> be not paid
(and this period will not be included in the state social
insurance period) only in the cases when the annual sum of the
income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, members of general
partnerships, actual members of commandite partnerships,
calculated from the taxed income that is calculated under the Law
on Income Tax and by subtracting the sum of the tax of the income
of tax year, while the annual sum of the income of the persons
who are engaged in individual activities save those who earn
their living while holding business certificates, calculated from
the taxed income that is calculated on the basis of the Law on
Personal Income Tax, by subtracting the tax sum of the tax of the
income of natural persons of the tax year, is smaller than 12
minimum monthly salaries, and the said persons are: (1)
pensioners of the State Social Insurance Fund" of Paragraph 4 of
the same article were not in conflict with Paragraph 2 of Article
29, Article 52 of the Constitution and the constitutional
principles of justice and a state under the rule of law), one is
to draw a conclusion that the provisions "self-employed persons,
with the exception of the persons engaged in individual
activities under business certificates, shall be covered on a
compulsory basis only by pension social insurance to receive the
main and supplementary parts of a pension" and "these persons
shall be insured on a compulsory basis to receive the
supplementary part of the pension where the annual sum of their
income as calculated by deducting the sum of income tax for the
tax year from the taxable profit calculated according to the Law
on Income Tax or the annual sum of income as calculated by
deducting the sum of income tax for the tax year from the taxable
income calculated according to the Law on Personal Income Tax is
equal to or exceeds the amount of 12 minimum monthly salaries" of
Paragraph 3 of Article 4 (wording of 4 November 2004) of the Law
and the provision "the persons indicated in Paragraph 3 of
Article 4 of this Law shall be allowed not to pay social
insurance contributions (this period will not be included in
social insurance period) only where the annual sum of income of
these persons as calculated by deducting the sum of (personal)
income tax for the tax year from the taxable (personal) income
calculated under the Law on Income Tax (the Law on Personal
Income Tax) is less than the sum of 12 minimum monthly salaries
and these persons: (1) receive the social insurance old age or
social insurance work disability pension as awarded under the Law
on State Social Insurance Pensions" of Paragraph 2 of Article 8
(wording of 4 November 2004) of the Law are not in conflict with
Paragraph 2 of Article 29, and Article 52 of the Constitution and
the constitutional principles of justice and a state under the
rule of law, either.
Conforming to Articles 102 and 105 of the Constitution of
the Republic of Lithuania and Articles 1, 53, 54, 55 and 56 of
the Law on the Constitutional Court of the Republic of Lithuania,
the Constitutional Court of the Republic of Lithuania has passed
the following
ruling:
1. To recognise that Item 1 of Paragraph 3 (wording of 4
July 2002, Official Gazette Valstybės žinios, 2002, No. 73-3095;
wording of 7 October 2003, Official Gazette Valstybės žinios,
2003, No. 101-4535) of Article 34 of the Republic of Lithuania
Law on State Social Insurance and the provision "it is permitted
that the state social insurance contributions <
> be not paid
(and this period will not be included in the state social
insurance period) only in the cases when the annual sum of the
income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, advocates,
assistants of advocates, members of general partnerships, actual
members of commandite partnerships, calculated from the taxed
income that is calculated under the Law on Income Tax and by
subtracting the sum of the tax of the income of tax year, while
the annual sum of the income of notaries, calculated from the
taxed income that is calculated on the basis of the Provisional
Law on Income Tax of Natural Persons, by subtracting the tax sum
of the tax of the income of natural persons of the tax year, is
smaller than 12 minimum monthly salaries, and the said persons
are: (1) pensioners of the State Social Insurance Fund" and "it
is permitted that the state social insurance contributions <
> be
not paid (and this period will not be included in the state
social insurance period) only in the cases when the annual sum of
the income of the owners of individual (personal) enterprises,
tenants of individual (personal) enterprises, advocates,
assistants of advocates, members of general partnerships, actual
members of commandite partnerships, calculated from the taxed
income that is calculated under the Law on Income Tax and by
subtracting the sum of the tax of the income of tax year, while
the annual sum of the income of notaries, calculated from the
taxed income that is calculated on the basis of the Provisional
Law on Income Tax of Natural Persons, by subtracting the tax sum
of the tax of the income of natural persons of the tax year, is
smaller than 12 minimum monthly salaries, and the said persons
are: <
> (7) insured by state social insurance under laws of the
Republic of Lithuania" of Paragraph 4 (wording of 4 July 2002,
Official Gazette Valstybės žinios, 2002, No. 73-3095) of the same
article and the provision "it is permitted that the state social
insurance contributions <
> be not paid (and this period will not
be included in the state social insurance period) only in the
cases when the annual sum of the income of the owners of
individual (personal) enterprises, tenants of individual
(personal) enterprises, members of general partnerships, actual
members of commandite partnerships, calculated from the taxed
income that is calculated under the Law on Income Tax and by
subtracting the sum of the tax of the income of tax year, while
the annual sum of the income of the persons who are engaged in
individual activities save those who earn their living while
holding business certificates, calculated from the taxed income
that is calculated on the basis of the Law on Personal Income
Tax, by subtracting the tax sum of the tax of the income of
natural persons of the tax year, is smaller than 12 minimum
monthly salaries, and the said persons are: (1) pensioners of the
State Social Insurance Fund" of Paragraph 4 (wording of 7 October
2003, Official Gazette Valstybės žinios, 2003, No. 101-4535) of
the same article were not in conflict with the Constitution of
the Republic of Lithuania.
2. To recognise that the provisions "self-employed persons,
with the exception of the persons engaged in individual
activities under business certificates, shall be covered on a
compulsory basis only by pension social insurance to receive the
main and supplementary parts of a pension" and "these persons
shall be insured on a compulsory basis to receive the
supplementary part of the pension where the annual sum of their
income as calculated by deducting the sum of income tax for the
tax year from the taxable profit calculated according to the Law
on Income Tax or the annual sum of income as calculated by
deducting the sum of income tax for the tax year from the taxable
income calculated according to the Law on Personal Income Tax is
equal to or exceeds the amount of 12 minimum monthly salaries" of
Paragraph 3 of Article 4 (wording of 4 November 2004, Official
Gazette Valstybės žinios, 2004, No. 171-6295) of the Republic of
Lithuania Law on State Social Insurance and the provision "the
persons indicated in Paragraph 3 of Article 4 of this Law shall
be allowed not to pay social insurance contributions (this period
will not be included in social insurance period) only where the
annual sum of income of these persons as calculated by deducting
the sum of (personal) income tax for the tax year from the
taxable (personal) income calculated under the Law on Income Tax
(the Law on Personal Income Tax) is less than the sum of 12
minimum monthly salaries and these persons: (1) receive the
social insurance old age or social insurance work disability
pension as awarded under the Law on State Social Insurance
Pensions" of Paragraph 2 of Article 8 (wording of 4 November
2004, Official Gazette Valstybės žinios, 2004, No. 171-6295) of
the same law are not in conflict with the Constitution of the
Republic of Lithuania.
This ruling of the Constitutional Court is final and not
subject to appeal.
The ruling is promulgated in the name of the Republic of
Lithuania.
Justices of the Constitutional Court:
Armanas Abramavičius
Toma Birmontienė
Egidijus Kūris
Kęstutis Lapinskas
Zenonas Namavičius
Ramutė Ruškytė
Vytautas Sinkevičius
Stasys Stačiokas
Romualdas Kęstutis Urbaitis