EHRM, 06-01-2005, nr. 58641/00

The applicant, [H.], is a Netherlands national, who was born in 1935 and lives in Zeist. She is represented before the Court by Ms M.I. Steinmetz, a lawyer practising in Amsterdam. The respondent Government are represented by their Agent, Ms J. Schukking, of the Netherlands Ministry of Foreign Affairs.

The applicant complained that the withdrawal of her AAW benefits was in violation of her property rights under Article 1 of Protocol No. 1. She further complained that the withdrawal of her AAW benefits was also contrary to Article 14 in conjunction with Article 1 of Protocol No. 1, in that the amended AAW rules constituted an indirect discrimination on grounds of sex since the income requirement affected more women than men.

The applicant complained that the withdrawal of her AAW benefits was in violation of her rights under Article 1 of Protocol No. 1, which reads as follows:

The Government were of the opinion that the withdrawal of the applicant's AAW benefits was not contrary to her rights under Article 1 of Protocol No. 1 in that the measure complained of was provided for by law, was in accordance with the general interests of the community, and in that there was a reasonable relationship between the interference and the interests pursued.

The Government argued that the national authorities enjoy a wide margin of appreciation under Article 1 of Protocol No. 1 in assessing whether a measure is in the public interest and that it is in the first place for the national authorities to determine when a situation necessitates infringing property rights in the public interest, and what measures are required. In this respect the Government emphasised that, as the concept of ‘public interest’ is a broad one and as the national authorities are better placed to appreciate the appropriateness and suitability of socioeconomic measures in a general area of policy shaped by sociopolitical choices on which opinions within a society differ widely, the Court has adopted a cautious approach in such cases when determining the intensity of its review in respect of socioeconomic policy choices, which approach stems partly from the subsidiary nature of the Court's oversight of such measures. This approach is, according to the Government, also appropriate in the instant case, which concerns a change in the AAW scheme which is a prime example of an area of socioeconomic legislation.

As to the applicant's claim that the amendment of the AAW rules, on the basis of which her AAW benefits were withdrawn, failed to satisfy the criterion of foreseeability required by the Convention, the Government considered that accepting the applicant's argument that she should be regarded as being entitled to AAW benefits for as long as she remained incapacitated or until she turned 65 would prevent any social security scheme from being amended once it had been introduced. In the Government's opinion, the criterion invoked by the applicant referred to a lack of foreseeability of the consequences of a measure. The present case concerned an amendment to an existing social security scheme that offered no scope whatsoever for differing interpretations as to its implementation and, therefore, could not be compared with the situation examined by the Court in the case of Belvedere Alberghiera Srl v. Italy (no. 31524/96, ECHR 2000-VI), which concerned an inconsistently applied rule. In the instant case, there was no arbitrary implementation or insufficient foreseeability, since the consequences of the amended AAW scheme were clear and unambiguous.

Although, on the basis of the applicable principle of legal certainty, the Government accepted that the consequences of the amended AAW rules for AAW beneficiaries must be assessed and that, if necessary, compensatory measures must be taken, they did not find that this principle extended to prohibiting any amendment to an existing social security scheme.

Referring to the Court's findings in the case of Lithgow and Others v. the United Kingdom (judgment of 8 July 1986, Series A no. 102, p. 50, § 120), the Government argued that, in order to be compatible with Article 1 of Protocol No. 1, the degree to which a measure impinges upon individual interests must be in proportion to the objective pursued by the deprivation of property and that this provision does not guarantee a right to full compensation in all circumstances. Providing for compensation is relevant to the question whether a fair balance was struck between the public interest and the individual's interests and whether the measure imposed a disproportionate burden on the person concerned and, in this respect, proportionality must be observed.

As regards the proportionality of the consequences of the amended AAW rules, the Government submitted that the object of the Act of 3 May 1989, as amended by the Act of 4 July 1990, was properly to implement the principle of equal treatment. As the introduction of this principle in the social security system led to a substantial increase in the number of potential AAW benefit claimants, the income requirement was introduced in the Act of 20 December 1979 in order to avoid unacceptable budgetary consequences. After the domestic courts had found that the transitional regime under this Act did not comply with the principle of equality, the Government had been obliged to amend the regime. To attain the object of equal treatment of men and women by waiving the income requirement altogether, which was indeed an option, would have had considerable budgetary repercussions which were considered unacceptable by the Government, as, given the way the AAW was funded, such an approach would imply a considerable increase in the burden on those contributing to the AAW scheme.

As to the question whether, in the applicant's personal circumstances, the consequences of the amended AAW rules should be regarded as disproportionate, the Government submitted that in the domestic proceedings the applicant's individual circumstances had been taken into due account. The Central Appeals Tribunal, in its assessment, dealt explicitly and extensively with the measure in relation to the applicant's rights under Article 1 of Protocol No. 1. The Government further submitted that, in order to offer some measure of assistance, partial compensation was granted to those who were no longer entitled to AAW benefits under the amended AAW rules in that, in those cases where the income requirement was not satisfied, benefit payments were only stopped after a period of 26 weeks. In this manner, not only was compensation in cash provided, but those concerned were also given considerable time in which to make provisions for the future.

The applicant submitted that the rule that States enjoy a wide margin of appreciation in assessing whether a measure is in the public interest does not apply where it concerns a measure that entails indirect discrimination on grounds of sex and/or marital status. According to the applicant, the measure at issue — although it concerned a neutrally formulated scheme — had the effect of more (married) women than men losing their right to AAW benefits, which in her opinion raised a presumption of discrimination based on sex and/or marital status.

On this point, the applicant pointed out that in a report published in June1991 on research into the implementation of the AAW Reparation Act of 3 May 1989, carried out between April 1989 and March 1991 by the Social Insurance Council (Sociale Verzekeringsraad)5. , it is stated:

The applicant further submitted that the AAW Reparation Act of 3 May 1989 disrespected the principle of foreseeability as required by the Convention. Although its effects were clear from 1 July 1991, it had in fact a quasi-retroactive effect in that it included a new supplementary requirement for AAW benefits, namely the income requirement, which had not existed and had not been foreseeable in 1976 when the applicant was granted AWW benefits. The applicant considered that this was contrary to the principle of legal certainty, since the insured occurrence — becoming incapacitated for work — had taken place in the past and the new supplementary requirement could no longer be met. Therefore, the amendment to the AAW scheme could possibly be regarded as arbitrary.

In the applicant's opinion, there was no reasonable relationship between the interference and the interests pursued in that the amended AAW rules had disproportionate consequences. Existing rights were not maintained, which affected women in particular, although the Government could have opted for an arrangement safeguarding such rights. On account of the withdrawal of her AAW benefits she had thus been obliged to bear an individual and excessive burden. In this respect, the applicant submitted, inter alia, that between 1 July 1991 and 1 February 2000 the total amount of AAW benefits she had been deprived of amounted to EUR 78,085.91. The period of 26 weeks during which her AAW benefits had been continued was insufficient compensation for the period of 8 years and 7 months during which she had had to survive without any benefits at all. Moreover, having lived on a minimum subsistence income from 1976 to 1991, she had had no opportunity whatsoever during those 26 weeks to make provisions for the future. The applicant submitted that, at 56 years old and having been completely incapacitated for work since 1972, she had no chance whatsoever of finding employment for the period between 1 July 1991, when her AAW benefits were withdrawn, and 1 February 2000, when she turned 65.

Under the Court's case-law, 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, must be construed in the light of the general principle laid down in the first rule (see Wittek v. Germany, no. 37290/97, § 41, ECHR 2002-X).

The Court has previously held that an entitlement to benefit pursuant to a national insurance scheme may constitute a pecuniary right for the purposes of Article 1 of Protocol No. 1 without it being necessary to rely solely on the link between entitlement to such benefit and the obligation to pay ‘taxes or other contributions’. However, in order to establish such a pecuniary right, the person concerned must satisfy the various statutory conditions established by law (see Willis v. the United Kingdom, no. 36042/97, §§ 32–34, ECHR 2002-IV; Wessels-Bergervoet v. the Netherlands(dec.), no. 34462/97, 3 October 2000; and Koua Poirrez v. France, no. 40892/98, ECHR 2003‑X).

In the present case, the applicant lost her entitlement to AAW benefits on 1 July 1991 following a change in the statutory conditions for entitlement to such benefits by the introduction of a new and additional condition, namely the ‘income requirement’, which the applicant did not meet.

The Court does not find it necessary to determine whether the applicant's loss of her entitlement to AAW benefits is to be considered ‘adeprivation of possessions’ within the meaning of the second sentence of the first paragraph of Article 1 of Protocol No. 1. As the situation envisaged in that second sentence is only a particular instance of interference with the right to peaceful enjoyment of property as guaranteed by the general rule set out in the first sentence, the Court will examine the facts of the instant case in the light of that general rule. In order to be compatible with Article 1 of Protocol No. 1, an interference with property rights must strike a ‘fair balance’ between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights. Furthermore, the issue of whether a fair balance has been struck becomes relevant only once it has been established that the interference in question satisfied the requirement of lawfulness and was not arbitrary (seeBeyeler v. Italy[GC], no. 33202/96, §§ 106–107, ECHR 2000-I).

The Court notes that the withdrawal of the applicant's benefits for failure to comply with the ‘income requirement’ criterion was directly based on the AAW Reparation Act of 3 May 1989 as amended by the Act of 4 July 1990. The Court further notes that the purpose of this Act was twofold, namely to remove the unlawful discriminatory effects on married women as regards entitlement to AAW benefits in their own right, by virtue of the Act on the Introduction of Equal Treatment for Men and Women as to Entitlement to Social Security Benefits of 20 December 1979 and, secondly, to secure that the extension of AAW beneficiaries, through the inclusion of married women, would not result in an unacceptable increase in the total costs of the AAW scheme.

In these circumstances, the Court is satisfied that the interference complained of pursued aims in the public interest. It finds that the removal of discriminatory regulations and the control of public expenses by the State are legitimate aims for the purposes of securing social justice and protecting the State's economic well‑being. In this respect, the Court reiterates that, in implementing social and economic policies, the margin of appreciation enjoyed by the national authorities in determining what is in the general interest of the community is a broad one (see James and Others v. the United Kingdom, judgment of 21 February 1986, Series A no. 98, p. 32, § 46, andBäck v. Finland, no. 37598/97, § 53, 20 July 2004).

The Court further considers that the alleged discriminatory effect of the amended rules on AAW entitlement falls to be examined under the applicant's separate complaint under Article 14 of the Convention rather than under Article 1 of Protocol No. 1.

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 concerned has had to bear an ‘individual and excessive burden’ (see James and Others v. the United Kingdom, cited above, § 50).

In this respect the Court observes that the applicant had been found to be incapacitated for work to a degree of 80–100% and that full incapacity for work entailed entitlement to AAW benefits equal to 70% of a base figure for a single person, which base figure was related to the statutory minimum wage. The applicant received those benefits until they were discontinued on 1 July 1991. The Court further notes that, at the material time, all persons between the ages of 18 and 65 and lawfully residing in the Netherlands were entitled to benefits under the General Welfare Act if they had no other means of subsistence and if their personal capital, i.e. personal savings and the value of an owned home, did not exceed an annually defined limit. Single persons, such as the applicant, were entitled to general welfare benefits equal to 50% of the statutory minimum wage and, if such a beneficiary lived alone, supplementary benefits of up to 20% could be awarded. In these circumstances, the Court cannot find that the discontinuation of AAW benefits in respect of persons who did not comply with the income requirement entailed an individual, excessive and disproportionate burden for those concerned in that, in so far as they had no other means of subsistence, they could apply for benefits under a different social security scheme. This finding is not altered by the fact that the applicant, given her personal capital, was not eligible for general welfare benefits since it cannot be regarded as contrary to Article 1 of Protocol No. 1 that personal savings and other capital are taken into account in the determination of entitlement to general welfare benefits designed to meet basic subsistence needs.

In view of the above, the Court concludes that, given the wide margin of appreciation enjoyed by the Contracting States in implementing social and economic policies, the decision complained of cannot be considered disproportionate to the legitimate aims pursued and, consequently, finds no appearance of a violation of Article 1 of Protocol No. 1.

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.

The applicant further complained that the withdrawal of her AAW benefits violated her rights under Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1 in that the implementation of the income requirement amounted to indirect discrimination against women, as it affected more women than men.

Article 14 of the Convention reads:

The Government submitted that the AAW scheme initially covered only men and single women and that it was impossible to ascertain what proportion of each group had no income in the year preceding the onset of incapacity for work. However, given that many women entered the labour market from the 1960s onward due to considerable social changes, the Government considered it highly likely that, among the specific category of unmarried women, there were many who were in regular employment. The Government are therefore of the opinion that it cannot be asserted without further substantiation, which the applicant failed to produce, that more (unmarried) women than men lost their entitlement to AAW benefits on account of the introduction of the income requirement.

The applicant submitted that the aim of the AAW Reparation Act was to ensure that married women who, on the basis of the decisions of 5 January 1988 of the Central Appeals Tribunal, had become entitled to AAW benefits would be prevented from applying for such benefits or would be deprived of these benefits as quickly as possible, and that to this end the Government introduced with immediate effect the principle of equality in the form of the income requirement applicable to all. Although the amended rules were formulated in a neutral manner, it did in fact result in more (married) women than men losing their AAW benefits.

Since Article 14 of the Convention not only requires that persons in a similar situation must be treated in an equal manner but also requires that persons whose situations are significantly different must be treated differently, the Netherlands Government should, in the applicant's view, have investigated whether all cases were equal or whether there were facts or circumstances that made it necessary to make a distinction. On this point the applicant submitted that the situation of persons having received AAW benefits for many years was in no way equal to that of persons having become incapacitated for work on or after 1 July 1991. The first group involved married women who had become incapacitated for work before 1 January 1980 or even before 1 October 1975. These women, mainly married or divorced, belonged to the group of married women whose husbands, at the time of marriage, were still considered as the breadwinners in the Netherlands. In contrast, the second group consisted of younger persons who had become incapacitated for work after 1 January 1979 and who had grown up in a period when the concept of the breadwinner was gradually disappearing from Netherlands legislation. According to the applicant, this was illustrated by the fact that, of the group of 5,100 persons whose benefits were withdrawn on 1 July 1991 for failure to comply with the income requirement, 64.7% were women and only 35.3% were men. She herself had become incapacitated for work in 1972 while she was still married, in a period when the situation in the Netherlands was that men were often the breadwinners and women did not work but stayed at home and cared for children. Her case thus concerned the effect of the breadwinner principle which did not, as claimed by the Government, gradually disappear from the 1960s onward but continued to apply in the AAW scheme until the end of the 1980s. Therefore, the object of the AAW Reparation Act, namely equal treatment of everyone from 1 July 1999, did no justice to the positive substantive obligation under Article 14 to treat differently persons whose situations are significantly different.

The Court recalls that Article 14 of the Convention affords protection against discrimination in the enjoyment of the rights and freedoms safeguarded by the other substantive provisions of the Convention, but that not every difference in treatment will amount to a violation of this provision. An issue will arise under Article 14 when it is demonstrated that States treat differently persons in analogous situations without providing an objective and reasonable justification, or when States without an objective and reasonable justification fail to treat differently persons whose situations are significantly different (see Thlimmenos v. Greece[GC], no. 34369/97, ECHR 2000-IV, § 44).

In so far as the applicant's claim of discrimination is based on the fact that the implementation of the income requirement under the AAW scheme affected more women than men, the Court considers that where a general policy or measure has disproportionately prejudicial effects on a particular group, it is not excluded that this may be regarded as discriminatory notwithstanding that it is not specifically aimed or directed at that group.

Although statistics in themselves are not automatically sufficient for disclosing a practice which could be classified as discriminatory under Article 14 of the Convention (see Hugh Jordan v. the United Kingdom, no. 24746/94, § 154, 4 May 2001), the Court cannot ignore that, according to the results of the research carried out by the Social Insurance Council on the effect of the implementation of the AAW Reparation Act of 3 May 1989 as submitted by the applicant, a group of about 5,100 persons lost their entitlement to AAW benefits on account of failure to meet the income requirement and that this group consisted of about 3,300 women and 1,800 men.

As to the Government's argument that, without further substantiation, these figures cannot be given the significance attributed to them by the applicant, the Court considers that where an applicant is able to show, on the basis of undisputed official statistics, the existence of a prima facie indication that a specific rule — although formulated in a neutral manner — in fact affects a clearly higher percentage of women than men, it is for the respondent Government to show that this is the result of objective factors unrelated to any discrimination on grounds of sex. If the onus of demonstrating that a difference in impact for men and women is not in practice discriminatory does not shift to the respondent Government, it will be in practice extremely difficult for applicants to prove indirect discrimination. As no such objective factors have appeared or have been submitted by the respondent Government, the Court accepts as sufficiently demonstrated that the introduction of the income requirement in the AAW scheme did in fact have an indirect discriminatory effect in respect of married or divorced women having become incapacitated for work at a time when it was not common in the Netherlands for married women to earn an own income from work.

The question therefore arises whether there is a reasonable and objective justification for the introduction of the income requirement under the AAW.

The Court notes that the income requirement — applicable to both men and women and irrespective of their marital status — was introduced in the AAW scheme in order to remove the discriminatory exclusion of married women from this scheme whilst seeking to keep the costs of the AAW scheme within acceptable limits. The Court accepts that this constitutes a reasonable and objective justification.

Furthermore, in view of the need to keep the costs of the AAW scheme within reasonable limits and the fact that AAW benefits are granted for incapacity for work, the Court further cannot find it unreasonable that the respondent Government decided to make entitlement to such benefits from 1 July 1991 dependent on a demonstrable link with income earned from or in connection with work, thus altering the nature of the AAW scheme from an insurance against loss of income opportunities to an insurance against loss of income. Although it is true that the number of women whose AAW benefits were discontinued for failure to meet the income requirement was statistically higher than the number of men, the Court cannot find that the introduction of this requirement — having regard to its objective and reasonable justification — was contrary to Article 14 of the Convention.

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

For these reasons, the Court by a majority

Declares the application inadmissible.

Santiago Quesada

Deputy Registrar

Christos Rozakis

President