## Facts

- Portugal enacted the State Budget Law for 2013 (Law No. 66‑B/2012) during a severe economic and financial crisis under an international financial assistance program requiring deficit reduction.
- The budget included austerity measures affecting public-sector employees, public-sector retirees, some pensioners, and recipients of certain social benefits.
- Challenged provisions included: suspension of an additional “holiday month” salary for public administration staff; extension of that suspension to certain teaching and research contracts; and other reductions in remuneration or benefits funded from public resources.
- The budget also included broader fiscal measures, including changes to personal income taxation and other measures affecting pension and labor-related income.
- Institutional petitioners (including high-level political authorities and parliamentary actors) sought abstract constitutional review of multiple budget provisions.
- The Constitutional Court, sitting in plenary, reviewed specific articles of the 2013 Budget Law and issued a generally binding ruling for any provisions declared unconstitutional.

## Issues

1. Whether suspending the additional holiday-month salary for public-sector employees (and related extensions) violated constitutional equality principles governing the fair distribution of public burdens.
2. Whether targeted, cumulative austerity reductions imposed primarily on public-sector income and certain pensions exceeded constitutional limits even during an exceptional fiscal crisis.
3. Whether other challenged measures (including certain tax-code amendments and fiscal measures) complied with constitutional requirements of equality, proportionality, and fiscal justice.

## Decision

- The Court declared unconstitutional, with generally binding force:
  - Article 29 (suspension of the additional holiday-month salary for public administration staff).
  - Article 31, insofar as it extended the Article 29 suspension to teaching and research contracts (consequential unconstitutionality).
  - Article 77.
  - Article 117(1).
- The Court did not declare unconstitutional the challenged norms in Articles 27, 45, 78, 186 (as it amended the Personal Income Tax Code), and 187.
- The Court accepted that exceptional economic conditions can justify some unequal treatment, but held that sustained and concentrated sacrifices on a narrow group lacked sufficient constitutional justification when not matched by comparable burdens on other income groups.

## Legal Principles

- Equality in public burdens: deficit-reduction measures must distribute sacrifices fairly; concentrating repeated cuts on public-sector earners can violate equality.
- Proportional equality: differential treatment must remain proportionate to relevant differences between groups and cannot “go too far,” particularly when measures are cumulative and ongoing.
- Crisis does not suspend constitutional review: the legislature may have a broad policy margin in fiscal emergencies, but equality and proportionality still constrain the intensity and duration of austerity measures.
- Fiscal justice: combining targeted pay reductions with generalized tax increases can aggravate unequal treatment and further support a finding of unconstitutionality where burdens are not equitably shared.

## Conclusion

The Constitutional Court partially invalidated 2013 budget austerity provisions that imposed repeated, disproportionate sacrifices on public-sector workers and certain beneficiaries, while upholding other, more broadly structured fiscal and tax measures as constitutionally permissible during the crisis.


Ruling No. 187/13 (Port. Const. Ct. 2013)