Court rules in favor of pensioners

Latvia's Constitutional Court has decided that working pensioners must receive full pensions, overruling a clause in the Latvian pension law that requires the government to pay only partial pensions.

The court in late March upheld a claim filed by three pensioners. The amended law will take effect this month.

In its ruling, the court said that the rule limiting pensions was unjust for those whose salary did not exceed the amount withheld from their pensions and were forced to decide whether to receive a full pension or continue working.

"The state authorities should rather think about how to collect taxes better, instead of trying to save on pensioners," said Dace Liepina, 59, a copy editor.

Liepina retired in June 1999 and continued to work for a salary plus a 60 lat ($95) pension, the maximum allowed by law. From now on she will receive an additional 100 lats per month.

Liepina is among the about 9,000 working pensioners who will now be able to receive a full pension, about 140 lats per month on average.

The changes will require an additional 4.6 million lats in the state social budget, according to Welfare Minister Andrejs Pozarnovs.

The court's decision will also require budget adjustments. The planned state social insurance budget deficit now stands at 24.46 million lats. The limited pensions for working pensioners saved the government some 12 million lats last year, Pozarnovs said.

Finance Minister Gundars Berzins said that the social security budget could cover the extra expense.

"We will pay the pensioners the necessary extra sums as required by the Constitutional Court's ruling," Berzins said.

In March, the state social security budget was 47.3 million lats, 18 percent more than in March 2001.

Latvia's Parliament in 1999 voted to limit the amount paid to working pensioners. At the same time it raised the retirement age from 55 for women and 60 for men to 62 for both sexes in an effort to save money. Those requirements will be imposed gradually.

The Constitutional Court opened for complaints from ordinary people only in July 2001. So far 451 such claims have been filed, but only 14 have been admitted, according to a spokesperson.

The case has sparked a similar debate in Lithuania, where limits on working pensioners still apply.