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On state social insurance contributions of self-employed persons

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’S 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

The court reporter—Daiva Pitrėnaitė

Jadvyga Andriuškevičiūtė, Head of the Labour and Social Law Unit of the Legal Department of the Office of the Seimas (who represented the Seimas of the Republic of Lithuania in the part of the case regarding petitions Nos. 1B-43/2004 and 1B-45/2004 of the Vilnius Regional Administrative Court, the petitioner), and Seimas member Algirdas Sysas (who represented the Seimas of the Republic of Lithuania in the part of the case regarding petition No. 1B-63/2006 of the Vilnius Regional Administrative Court, the petitioner), acting as the representatives of the Seimas of the Republic of Lithuania, the party concerned

The Constitutional Court of the Republic of Lithuania, 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, considered case No. 35/04-37/04-72/06 subsequent to the petitions of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into 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’s 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’s Law on State Social Insurance, and Item 7 of the latter paragraph to the extent that, according to the petitioner, it is prescribed 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’s Law on State Social Insurance to the extent that, according to the petitioner, it is prescribed 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 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 Decision of the Constitutional Court of the Republic of Lithuania “On Joining Petitions into One Case” of 10 May 2006, the 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 Decision of the Constitutional Court of the Republic of Lithuania “On Joining Petitions into One Case” of 27 June 2007, 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, considered an administrative case. By its ruling, the court suspended the consideration of the case and applied to the Constitutional Court with a petition, requesting an investigation into 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, considered an administrative case. By its ruling, the court suspended the consideration of the case and applied to the Constitutional Court with a petition, requesting an investigation into 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 prescribed 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, considered an administrative case. By its ruling, the court suspended the consideration of the case and applied to the Constitutional Court with a petition, requesting an investigation into 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 prescribed 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 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 an investigation into 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 provides, inter alia, 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 impugned 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 an investigation into 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 prescribed 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 occurrence 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, should be regarded as a discriminatory one and as conflicting with Paragraph 2 of Article 29 of the Constitution, which prohibits restricting the rights of the human being, or granting 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 an investigation into 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 prescribed 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 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 impugned 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 procedure established by law 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 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’s hearing, written explanations were received from the representatives of the Seimas, the party concerned, who were Jadvyga Andriuškevičiūtė, Seimas member 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 Seimas member A. Sysas, in which it is maintained that the impugned 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 should 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 impugned 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. Seimas member B. Bradauskas 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 the 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 occur due to the fact that he belongs to society.

4. J. Andriuškevičiūtė, which was commissioned by the Ordinance of the Speaker of the Seimas (No. 135) “On Amending the 11 November 2004 Ordinance (No. 182) of the Speaker of the Seimas” 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 for 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 the 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 law. The impugned 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 attachments—rulings of the Klaipėda Regional Administrative Court) was received, from which it is clear, inter alia, 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’s hearing, J. Andriuškevičiūtė and Seimas member 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’s 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 an investigation into 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 prescribed 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 prescribed 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 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 impugned 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 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 impugned legal regulation has been amended and/or supplemented more than once, however, its essence (in the aspect that its compliance with the Constitution is impugned 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 for paying 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 activities—from employment relations or individual activity—and such a duty arises after one starts working if the insured income provided for in the law is received from the corresponding economic activities; 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 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 employment (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 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 law.

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 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 enables implementing 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’s 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’s 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 241, 421, 531 and 661 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 before, 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 employment (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 (employment) 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’s 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 impugned 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 impugned 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 law.”

2. Under the Constitution, the State of Lithuania is socially oriented; thus, the state is under constitutional obligation and it must undertake the burden of fulfilment of certain commitments. The social orientation of the state 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 should be mentioned, which were formulated, inter alia, in the Constitutional Court’s 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 acts of the Constitutional Court adopted in previous constitutional justice cases:

as mentioned before, 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 state 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 a possibility of protecting 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 should 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 legislature 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 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 law, the 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 state);

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 the duty of the legislature 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 the 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 should 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 legislature 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 legislature, 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 the equality of all persons, which prohibits discrimination and privileges, which obligates one to legally assess the same facts in a homogeneous manner and prohibits any arbitrary assessment of essentially the same facts in a varied manner, however, which does not deny the fact that with regard to certain categories of persons that are in a different situation a differentiated legal regulation may be established; a 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 the equality of all persons before the law would be violated when a certain group of people for which a certain legal norm is established, if compared to other addressees of the same legal norm, were treated differently, even though there are not any differences in the character and extent between these groups so 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 the duty of the legislature to create legal preconditions for implementing 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 on an opportunity to freely choose an occupation or business.

3. It needs to be held that the legislature not only may, but also must establish the legal regulation which would create the 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 (the Constitutional Court’s ruling of 23 August 2005), therefore, the said legal regulation should create preconditions for distributing (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 legislature, 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 before, the Vilnius Regional Administrative Court, the petitioner, requests an investigation into 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 on 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 on 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 on 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 on 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 released 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 should be construed in the context of other provisions of this law; inter alia, account should be taken of Paragraph 1 of Article 4 (wording of 20 November 2001) of the Law, the provisions of which are referred to in the impugned Paragraphs 3 and 4 of Article 34 (wording of 4 July 2002) of the Law.

Paragraph 1 of Article 4 (wording of 20 November 2001) of the Law, inter alia, prescribed:

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 <…>.”

Paragraph 3 of Article 4 (wording of 20 November 2001) of the Law, inter alia, prescribed: “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 an investigation into 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 the impugned 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 on 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 on 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 released 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 on 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 released 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 released 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 impugn the compliance of this regulation with the Constitution.

7. Thus, the petition of the petitioner requesting an investigation into 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 should be treated as the petition requesting an investigation into 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 before, 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 on 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 on 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 on 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 on 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 on 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 on 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 impugned 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 impugned 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 impugned 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 ruling of the Constitutional Court 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, the conclusion should be drawn 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 on 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 on 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 on 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 on 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 impugned 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 legislature 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 for distributing (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 occurrence 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, it should be noted 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 enable ensuring minimum socially accepted needs of the said person and of the family members who are dependent on him (the Constitutional Court’s ruling of 20 March 2007).

It also needs to be mentioned that in the course of establishing the minimum size of the received insured income, when receiving which the duty arises 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 before, when paid periodically, would enable ensuring 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 for forming 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 impugned 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, it should be 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 on 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 on 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 on 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 on 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 on 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 on 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 on 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 on 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, it should also be held 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 before, the Vilnius Regional Administrative Court, the petitioner, requests an investigation into 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 prescribed (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 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 on 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 on 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 on 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 on 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 released 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 should be construed in the context of other provisions of this law; inter alia, account should be taken of Paragraph 1 of Article 4 (wording of 7 October 2003) of the Law, the provisions of which are referred to in the impugned Paragraphs 3 and 4 of Article 34 of the Law.

Paragraph 1 of Article 4 (wording of 7 October 2003) of the Law, inter alia, prescribed:

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 <…>.”

Paragraph 3 of Article 4 (wording of 7 October 2003) of the Law, inter alia, prescribed: “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 the impugned 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 on 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 on 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 released 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 on 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 released 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 an investigation into 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 should be treated as a petition requesting an investigation into 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 before, 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 on 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 on 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 on 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 on 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 impugned 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 ruling of the Constitutional Court 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, the conclusion should be drawn 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 on 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 on 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 impugned by the Vilnius Regional Administrative Court, the petitioner), in the aspect that the compliance of this legal regulation with the Constitution is impugned 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 on 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 on 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 ruling of the Constitutional Court 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 on 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 on 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 ruling of the Constitutional Court 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 on 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 on 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, the conclusion should also be drawn 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 on 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 on 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 an investigation into 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 prescribed 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 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 judgment 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 released 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 should be construed in the context of other provisions of this law; inter alia, account should be taken 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 on 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 on 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 on 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 judgment 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 released 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 on 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 judgment 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 released 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, impugns 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 one 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 an investigation into 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 impugned 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, should be treated as a petition requesting an investigation into 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 impugned by the Vilnius Regional Administrative Court, the petitioner) in the aspect that the compliance of this legal regulation with the Constitution is impugned 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 on 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 on 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 on 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 on 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 ruling of the Constitutional Court 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 on 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 on 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 on 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 on 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 ruling of the Constitutional Court 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 on 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 on 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, the conclusion should be drawn 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 ruling of the Constitutional Court 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 on 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 on 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 ruling of the Constitutional Court 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 on 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 on 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), the conclusion should be drawn 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 gives 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’s 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 on 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 on 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 on 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 on 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 on 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 on 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’s 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 pronounced 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