EHRM, 22-09-2005, nr. 75255/01

The AWW, which entered into force on 1 October 1959, insured against the risk of the death of the family breadwinner. Under the AWW scheme, all persons residing in the Netherlands and non-residents gainfully employed in the Netherlands were compulsorily insured. Contributions to this scheme were paid by all persons gainfully employed in the Netherlands.

Entitlement to AWW benefits was not dependent on the level of contributions paid as, contrary to a social security scheme based on employment (werknemersverzekering), it was a nationwide social security scheme (volksverzekering). The level of benefits was linked to the statutory minimum wage.

The AWW conferred entitlement to a widow's pension for the widow of an insured person, as long as she was not yet aged 65, provided she was caring for an unmarried child born or conceived no later than the date of the death of her spouse. A widow without children was also entitled to claim benefit subject to certain conditions, for example if she was incapacitated for work or was aged 40 or over at the time of her husband's death.

‘Widow’ meant the woman to whom the insured person was married on the date of his death.

At the time when the AWW was replaced by the Anw, the amount of the pension was equal to the statutory after-tax minimum wage in the case of a widow with dependent children below the age of 18, and 70% of that wage in other cases. This amount was the same for all widows, regardless of any income which they might enjoy from other sources.

The entitlement to an AWW pension was lost upon remarriage.

Since 1988, widowers enjoyed the same entitlement to benefit after the death of their wives pursuant to case-law of the domestic tribunals under Article 26 of the International Covenant on Civil and Political Rights.

By 1987 the Government of the day felt that the AWW, based as it was on the traditional division of labour between men and women, had become obsolete. It gave surviving dependents an entitlement to benefits even if they were not needy: increasingly, beneficiaries included widows and widowers in paid employment.

For this reason the Government decided to introduce new legislation granting an entitlement to a pension only to certain categories of surviving dependents who could not be expected either to provide entirely for themselves or to take out private insurance.

A first bill was introduced in 1991. It was rejected by the Upper House of Parliament, which disapproved of, among other things, the proposed transitional provisions.

A revised bill was introduced during Parliament's 1994–95 session.

According to figures quoted by the Government in support of their proposals, in 1993, the percentages of working women among widows and female divorcees in the age groups 45–49 and 50–54 were 58% and 42% respectively (see the Explanatory Memorandum —Memorie van Toelichting—, Lower House of Parliament, no. 24,169, 1994–95 session, no. 3).

The Anw (Act of 21 December 1995, Official Gazette (Staatsblad) 1995, no. 690, as amended (with retroactive effect until 1 July 1996) by the Act of 4 July 1996, Official Gazette 1996, no. 369) entered into force on 1 July 1996.

According to section 13 of the Anw, the persons insured under that Act are those who are either Netherlands residents or, if not Netherlands residents, are subject to payment of wage tax (loonbelasting) in respect of work carried out in the Netherlands under a contract of employment.

Section 14 of the Anw provides that the surviving dependents of an insured person shall be entitled to a pension if they have an unmarried child less than eighteen years of age that does not form part of any other person's household, or if they are unfit for work, or if they were born before 1 January 1950.

Section 16 provides for the termination of the entitlement to an Anw pension in the event that the surviving dependent no longer meets the requirements of section 14 (unless he or she was born before 1 January 1950) or reaches the age of 65 (at which age, in the Netherlands, one normally becomes entitled ipso facto to an old age pension under different legislation).

The Anw pension shall be equal, after tax, to 70 % of the statutory minimum wage after tax (section 17). The pension shall be reduced by an amount equal to the surviving dependent's other income, if any; however, a proportion of income from paid employment (inkomen uit arbeid) equal to 50% of the statutory minimum pre-tax wage plus, if the surviving dependent's income from work exceeds that sum, one-third of the remainder, shall not be so deducted (section 18).

Section 67 provided a transitional regime for persons who, before the entry into force of the Anw, were entitled to benefits under the AWW.

According to section 67 (3), persons who, like the applicant, maintained a common household with another person on the day on which the Anw entered into force (i.e. 1 July 1996), and were still maintaining that common household on 31 December 1997, lost their entitlement to an Anw pension entirely with effect from 1 January 1998 unless they were born before 1 January 1941, in which case they were entitled to an Anw pension amounting to 30% of the statutory minimum wage (after tax).

The Government do not seek to argue that Article 1 of Protocol No. 1 is inapplicable. They argue, however, that it has not been violated.

In the first place, they take the view that there has been no ‘deprivation’ of possessions. Contributions to the AWW scheme were paid in respect of the applicant and the applicant remained, and remains, entitled to a pension under the AWW and its successor, the Anw, subject to meeting the conditions set by the law in question. She cannot, however, claim under Article 1 of Protocol No. 1 to be entitled to a pension in any particular amount. Her substantive rights are currently defined by the law as amended, not by the law as applicable at the time when she was first granted the pension.

In the alternative, they rely on the respondent State's margin of appreciation. The AWW was replaced in response to social developments which could not be ignored. Furthermore, the applicant profits from a transitional regime which goes some way towards compensating her for the income which she loses. It cannot therefore be said that the interference with the applicant's proprietary rights is ‘disproportionate’.

Still less can it be said that a State is prevented from altering a social-security entitlement in the light of changed circumstances once it has been granted.

The applicant and the third parties draw the Court's attention to the contributions which their late breadwinners paid while alive in order that they should benefit from them in the event of their being widowed.

They rely primarily on the fact that, at the time when the AWW pension was awarded to them, the only grounds for its termination communicated to them were their reaching the age of 65 (at which time they would qualify for an old age pension) and the eventuality of their remarrying. In their submission, it is not open to the respondent State to place additional restrictions on their entitlement or reduce it in any significant proportion: an AWW pension is not to be compared with, for example, unemployment benefits, which by their nature are intended to be temporary only.

In the second place, they consider it unnecessary for the respondent State to encroach on pre-existing rights. In their submission, alternative solutions could have been found which would have left them unaffected without exceeding the budget reserved for pensions under the Anw.

In the further alternative, they argue that the introduction of the new legislation has resulted in reductions of their income which impose a disproportionate individual burden on them. The transitional arrangement, under which individuals in the position of the applicant continue to receive a certain proportion of the statutory minimum wage, is insufficient to restore a reasonable relationship of proportionality.

Finally, they express the view that the respondent State should not have resorted to measures as drastic as those complained of without at least assessing the effect that they would have on the lifestyles of each of them. In some cases, recipients of an Anw pension have been deterred from engaging in relationships involving cohabitation, however defined, by the prospect of losing their Anw pension altogether.

The Court finds that Article 1 of Protocol No. 1 is applicable to the present case (see Stec and Others v. the United Kingdom[GC] (dec.), nos. 65731/01 and 65900/01, ECHR 2005–…); indeed this is not in dispute.

As the Court has held many times, Article 1 of Protocol No. 1, which guarantees in substance the right of property, comprises three distinct rules. The first, which is expressed in the first sentence of the first paragraph and is of a general nature, lays down the principle of peaceful enjoyment of property. The second rule, in the second sentence of the same paragraph, covers deprivation of possessions and subjects it to certain conditions. The third, contained in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. The second and third rules, which are concerned with particular instances of interference with the right to peaceful enjoyment of property, are to be construed in the light of the general principle laid down in the first rule (see, as a recent authority, Kjartan Ásmundsson v. Iceland, no. 60669/00, § 39, ECHR 2004–…).

As it did in Kjartan Ásmundsson, the Court will proceed in the present case on the basis of an ‘interference’ with the applicant's peaceful enjoyment of a possession (loc. cit., § 40; see also Hoogendijk v. the Netherlands (dec.), no. 58641/00).

The lawfulness, in terms of domestic law, of the interference is not in dispute.

As in Hoogendijk, the Court accepts that the aims pursued were social justice and the State's economic well-being, both of which are legitimate.

However, an interference with property rights under Article 1 of Protocol No. 1 must not only pursue a legitimate aim ‘in the public interest’; there must also be a reasonable relationship of proportionality between the means employed and the aim sought to be realised. The requisite balance will not be found if the person or persons concerned has had to bear ‘an individual and excessive burden’ (see, among many other authorities, Kjartan Ásmundsson, cited above, § 40, and Hoogendijk, cited above).

In considering whether this is the case, the Court must have regard to the peculiar context in which it arises in the present case, namely that of a social security scheme. Such schemes are an expression of a society's solidarity with its vulnerable members.

The AWW was enacted in 1959. It set up a system in which breadwinners contributed to a fund from which, in the event of their death, payments in the form of pensions would be made to their surviving dependents. Such pensions were set at a statutory rate, regardless of the contributions paid in by the breadwinners.

At that time, the assumption was that families' breadwinners were normally men; surviving dependents of deceased breadwinners were either the adult women to whom they had been married or their underage children. The name itself of the AWW, which translates as ‘General Widows and Orphans Act’, reflects this. The AWW was intended to keep these vulnerable groups safe from destitution by providing them with a guaranteed income sufficient to maintain a modest but decent standard of living. In the case of widows, the pension was either 70% or the full amount of the statutory pre-tax minimum wage, depending on whether the widow was the only surviving dependent or had to care for underage children as well (see above).

A further assumption, applicable to widows aged 40 or over, was that they were not otherwise provided for; that is, that they were not maintained by another adult or by income from paid employment. Their entitlement to an AWW pension therefore continued until they remarried or until they reached the age of 65 and became entitled to an old age pension.

By the time of the events complained of, more than three decades later, the above assumptions had been overtaken by developments in Netherlands society. For present purposes, it suffices to note that many widows were living unwed with other persons in a relationship comparable in economic terms to a family unit or else themselves had income from another source: normally either paid employment or social benefits, such as unemployment or disability benefits, replacing income from earlier employment.

In these changed circumstances it was no longer axiomatic that widows were bereft of maintenance.

Moreover, by this time it was not only widows who could qualify for an AWW pension but — following developments in domestic case-law based on human rights considerations (Article 26 of the International Covenant on Civil and Political Rights) — widowers as well.

The Government and the legislature of the respondent Party were entitled in principle to respond to these changes by altering their understanding of vulnerable groups requiring protection in the form of income from public sources (compare Kjartan Ásmundsson, cited above, § 42); this they did by enacting the Anw. The Court must now examine the Anw's impact on persons in the position of the applicant.

For recipients of an AWW pension, the Anw involved a reduction in disposable income if they had an additional income in the form of other social benefits or from paid employment or were born after 1940 and were living together in a common household with another person (unless that person was an invalid who was in their care). The applicant and the third parties all belong to at least one of these categories.

Those whose other income consisted of social benefits lost a proportion of their pension equal to those other benefits.

In the case of those in paid employment, the reduction in income was so calculated that those whose wages amounted to twice the statutory minimum wage or more lost their entitlement entirely; those whose wages were lower kept a proportion of their entitlement.

Those who maintained a common household with another adult on a particular date could initially expect to lose their pension entitlement entirely. However, this was considered an unduly harsh measure; as described above, its effects were softened by various transitional measures. Eventually the pension payable to persons in this position, as relevant to the present case, became 30% of the pre-tax statutory minimum wage.

The Court cannot accept the suggestion made by the applicant and the third parties that their pension entitlements, based as they were on contributions to a particular fund made specifically in order that they should benefit, should remain unaltered once they were granted. There is no authority in its case-law for so categorical a statement; in actual fact, it has accepted the possibility of reductions in social-security entitlements in certain circumstances (see, as a recent authority, Kjartan Ásmundsson, cited above, § 45, with further case-law references; see also Hoogendijk, cited above).

Nor is the Court concerned with the possibility that other options were open to the authorities of the respondent State. The possible existence of alternative solutions does not in itself render the contested legislation unjustified (Mellacher and Others v. Austria, judgment of 19 December 1989, Series A no. 169, p. 28, § 53).

In Kjartan Ásmundsson, the Court considered decisive the individual nature of the termination of Mr Kjartan Ásmundsson's disability pension, as apparent from the small number of persons in Mr Kjartan Ásmundsson's position as compared to the numbers who continued to enjoy the disability pension denied him, and the fact that the legislation formerly governing the pension paid to him allowed him additionally to enjoy income from gainful employment, subject to certain conditions (loc. cit., §§ 43–44). Against that background, it considered the complete termination of Mr Kjartan Ásmundsson's disability pension excessive when set off against the interests of the community as a whole (loc. cit., § 45).

The present case is different.

Firstly, it has not been argued, nor is it apparent, that the number of individuals whose AWW pensions have been reduced by the Anw is so limited that their impact can be considered insignificant.

Secondly, provision has been made to ease the effects of the new legislation on persons in the position of the applicant.

Thirdly, and more importantly, the AWW was conceived as a safeguard against poverty for persons who lacked basic maintenance from another socially acceptable source; the information available to the Court is insufficient to allow it to conclude that the applicant is in that position.

The Court accepts that the introduction of the Anw has had effects on the applicant's disposable income. However, although the Convention, supplemented by its Protocols, binds Contracting Parties to respect lifestyle choices to the extent that it does not specifically admit of restrictions, it does not place Contracting Parties under a positive obligation to support a given individual's chosen lifestyle out of funds which are entrusted to them as agents of the public weal.

In conclusion, the Court does not find that the applicant was made to bear an ‘individual and excessive burden’.

It follows that this part of the application must be rejected as manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention.