FOURTH SECTION
DECISION
Application no. 71418/14
Virgílio Manuel DA CUNHA FOLHADELA MOREIRA
against Portugal
The European Court of Human Rights (Fourth Section), sitting on 13 November 2018 as a Committee composed of:
Egidijus Kūris, President,
Paulo Pinto de Albuquerque,
Iulia Antoanella Motoc, judges,
and Andrea Tamietti, Deputy Section Registrar,
Having regard to the above application lodged on 5 November 2014,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Mr Virgílio Manuel da Cunha Folhadela Moreira, is a Portuguese national, who was born in 1944 and lives in Porto. He was represented before the Court by Mr R. Varela Martins, a lawyer practising in Lisbon.
The circumstances of the case
2. The facts of the case, as submitted by the applicant, may be summarised as follows.
3. The applicant was registered with the social security system in Portugal, into which he had paid pension contributions from 1967 until 2009.
4. In addition, from March 1999 the applicant paid optional additional contributions, expecting to receive a correspondingly increased pension later.
5. On 10 May 2007 Legislative Decree no. 187/2007 was enacted, which introduced changes to the calculation of amounts payable and a cap on some pensions. This new piece of legislation entered into force on 1 June 2007. Alongside the Programme of the Seventeenth Constitutional Government, it aimed at promoting the long-term sustainability of the Portuguese social security system.
6. The applicant met the age criteria to be entitled to receive a pension on 12 April 2009, when he turned 65 years old.
7. On an unknown day in 2009 the applicant submitted a request to receive his pension.
8. By a letter dated 17 November 2009 the Social Security Institute notified the applicant that his monthly pension awarded by the National Pensions Centre had been set at 4,950.71 euros (EUR).
9. By a letter dated 18 November 2009 the Social Security Institute informed the applicant that the overall amount of his monthly pension had been set at EUR 5,178.11, resulting from the sum of two parts: the above-mentioned EUR 4,950.71 as awarded by the National Pensions Centre and EUR 227.40 as awarded by the National Centre for public sector pensions (Caixa Geral de Aposentações).
10. On 26 February 2010 the applicant lodged proceedings with the Porto Administrative Court. The applicant argued that the calculation of his monthly pension under the legal provisions in force until 1 June 2007 would have set the amount to be awarded by the National Pensions Centre at EUR 7,088.11, instead of EUR 4,950.71. He further claimed that the application of the new legal provisions had not allowed him to receive the increased pension he had been expecting (see paragraph 4 above). He thus claimed that the legislation previously in force should be applicable to the calculation of his monthly pension or, alternatively, that the pension-capping introduced by Legislative Decree no. 187/2007 (see paragraph 5 above) should not be applicable.
11. On 2 December 2011 the Porto Administrative Court dismissed the applicant’s claim. It considered that the applicant had not acquired the right to a higher pension on the grounds that he had retired after Legislative Decree no. 187/2007 entered into force. That court further relied on a previous Constitutional Court judgment (no. 188/2009 of 22 April 2009) in relation to a similar matter, in which it had been found that the legislator had a margin for shaping the right to social security, that contributors had no legitimate expectation of maintaining a status quo in respect of pensions and that the new legislation on social security had been designed to ensure the financial sustainability of the system.
12. On 1 February 2011 the applicant appealed against that decision to the North Administrative Central Court, which, on 12 July 2013, upheld the first-instance judgment.
13. The applicant then lodged an appeal with the Constitutional Court arguing that the provisions under Article 101 (pension-capping) in conjunction with Articles 33 and 34 (calculation of pensions) of Legislative Decree no. 187/2007 were in breach of the constitutional principles of legal security, proportionality, equality and legality.
14. On 6 May 2004 the Constitutional Court dismissed the applicant’s appeal, referring to the reasoning in its previous judgment (no. 188/2009 of 22 April 2009) which had not declared the impugned provisions to be unconstitutional. The applicant was notified of the decision on 8 May 2014.
COMPLAINT
15. The applicant complained under Article 1 of Protocol No. 1 to the Convention about the reduction of his monthly pension on account of the application of the relevant provisions of Legislative Decree no. 187/2007.
THE LAW
16. The applicant relied on Article 1 of Protocol No. 1 to the Convention, which reads as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
17. The applicant alleged a breach of his right to the protection of property owing to the reduction of his monthly pension as a result of the application of the provisions of Legislative Decree no. 187/2007 in calculating the amount of the pension.
18. An applicant can allege a violation of Article 1 of Protocol No. 1 only in so far as the impugned decisions related to his or her “possessions” within the meaning of this provision. “Possessions” can either be “existing possessions” or assets, including claims, in respect of which the applicant can argue that he or she has at least a “legitimate expectation” of obtaining enjoyment of a property right (see Von Maltzan and Others v. Germany (dec.) [GC], nos. 71916/01 and 2 others, § 74 (c), ECHR 2005‑V). Thus, future income cannot be considered to constitute “possessions” unless it has already been earned or is definitely payable (see Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, § 64, ECHR 2007-I, and Mamatas and Others v. Greece, nos. 63066/14 and 2 others, § 86, 21 July 2016). The Court also observes that a legitimate expectation must be based either on a legal provision or have a solid basis in the domestic case-law (see Associazione Nazionale Reduci and 275 Others v. Germany (dec.), no. 45563/04, 4 September 2007, and Von Maltzan and Others, cited above, § 112).
19. As the Court has reiterated on other occasions, the principles which apply generally in cases under Article 1 of Protocol No. 1 are equally relevant when it comes to social and welfare benefits. Article 1 of Protocol No. 1 places no restriction on the Contracting State’s freedom to decide whether or not to have in place any form of social security scheme, or to choose the type or amount of benefits to provide under any scheme. If, however, a Contracting State has in force legislation providing for the payment as of right of a welfare benefit – whether or not conditional on the prior payment of contributions – that legislation must be regarded as generating a proprietary interest falling within the ambit of Article 1 of Protocol No. 1 for persons satisfying its requirements (see Andrejeva v. Latvia [GC], no. 55707/00, § 77, ECHR 2009 with further references; Kjartan Ásmundsson v. Iceland, no. 60669/00, § 39, ECHR 2004‑IX; Carson and Others v. the United Kingdom [GC], no. 42184/05, § 64, ECHR 2010; and Da Conceição Mateus and Santos Januário (dec.), nos. 62235/12 and 57725/12, § 18, 8 October 2013).
20. However, Article 1 of Protocol No. 1 does not guarantee, as such, any right to a pension of a particular amount (see, for example, Aunola v. Finland (dec.), no. 30517/96, 15 March 2001, and Kjartan Ásmundsson, cited above, § 39). In this connection, a wide margin of appreciation is usually allowed to the State under the Convention when it comes to general measures of economic and social policy. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to decide what is “in the public interest” on social or economic grounds, and the Court will generally respect the legislature’s policy choice unless it is “manifestly without reasonable foundation” (see National & Provincial Building Society, Leeds Permanent Building Society and Yorkshire Building Society v. the United Kingdom, 23 October 1997, § 80, Reports of Judgments and Decisions 1997-VII; Stec and Others v. the United Kingdom [GC], nos. 65731/01 and 65900/01, § 52, ECHR 2006-VI; and Da Silva Carvalho Rico v. Portugal (dec.), no. 13341/14, § 37, 1 September 2015).
21. In the present case the Court must first consider whether Article 1 of Protocol No. 1 is applicable. Therefore, it has to examine whether the applicant had “possessions” within the meaning of Article 1 of Protocol No. 1, that is “existing possessions” or a “legitimate expectation” of obtaining the effective enjoyment of a property right.
22. The applicant cited an expectation that he would receive a certain amount of pension. However, the pension only materialised as a right to property once his retirement had been accepted and the amount of his pension had been set, on 17 November 2009 (see paragraph 8 above). On that date, Legislative Decree no. 187/2007 was already in force. Therefore, the only right that the applicant acquired under Article 1 of Protocol No. 1 on that date was the right to the amount of pension that had been confirmed to him: EUR 4,950.71.
23. Even taking into consideration the possibility that making additional contributions to a pension fund may, in certain circumstances, create a property right and that such a right may affect the manner in which the fund is distributed (see Kjartan Ásmundsson, cited above), this does not apply in the present case where the applicant had not yet received a pension at the time that the rules setting out how the amount would be calculated were changed.
24. The Court therefore concludes that the applicant cannot claim to have had a legitimate expectation of a higher amount of pension, in particular under the provisions of the law applicable prior to his retirement. Consequently, the judgments of the national courts in his case did not amount to an interference with the peaceful enjoyment of his possessions.
25. In light of the above, the applicant cannot argue that he had a “possession” within the meaning of Article 1 of Protocol No. 1 and the facts of the case do not fall within the ambit of that provision.
26. It follows that the application is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and should be dismissed in accordance with Article 35 § 4.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 6 December 2018.
Andrea TamiettiEgidijus Kūris
Deputy Section RegistrarPresident
Full & Egal Universal Law Academy