## Facts

- Institutional applicants sought abstract constitutional review of provisions in Portugal’s 2014 State Budget Law adopted during an economic and financial crisis.
- Challenged measures included: (1) further reductions to public-sector pay, including a change to the calculation base; (2) mandatory “contributions” reducing net sickness benefits by 5% and unemployment benefits by 6%; and (3) revised rules recalculating and reducing survivors’ pensions when combined with other pensions.
- Applicants alleged violations of constitutional principles including equality, proportionality, and protections associated with legal certainty and social rights.
- The Court considered whether the contested norms were unconstitutional and, if so, whether to limit the temporal effects of invalidation to protect public interests.

## Issues

1. Whether further public-sector pay cuts, including changes to their calculation, violated constitutional equality by imposing excessive differentiated burdens.
2. Whether 5% and 6% contributions on sickness and unemployment benefits violated proportionality given the benefits’ subsistence-protection function.
3. Whether revised survivors’ pension reduction and recalculation rules violated equality by producing unjustified disparities among similarly situated pensioners.
4. If a norm was unconstitutional, whether the Court should restrict the temporal effect of invalidation in light of exceptional public interest concerns.

## Decision

- The Court held unconstitutional a norm further reducing public-sector pay for violating equality because the differentiation produced by increased cuts and a new calculation base was excessive, notably for workers with base monthly pay between €675 and €1,500.
- The Court limited the effects of that unconstitutionality determination to prospective application from the date of the ruling due to exceptionally important public interest concerns.
- The Court held unconstitutional the norms imposing a 5% contribution on sickness benefits and a 6% contribution on unemployment benefits because the resulting reductions were disproportionate.
- The Court held unconstitutional the survivors’ pension recalculation and reduction norms for violating equality because they caused disparate reductions among pensioners with the same overall pension income and equivalent legal positions.

## Legal Principles

- Equality prohibits legislative classifications and burden allocations that are excessive, arbitrary, or lack sufficient justification, including within emergency fiscal policy.
- Proportionality requires that rights-burdening fiscal measures pursue a legitimate aim and be suitable, necessary, and not excessive relative to that aim; subsistence-protecting social benefits warrant especially strict review.
- Where a legislative regime’s stated purpose is to address a defined policy concern (e.g., limiting accumulation of multiple pensions), equality requires a coherent connection between means and ends and consistent treatment of equivalent situations.
- A constitutional court may, in exceptional circumstances, restrict the temporal effects of an unconstitutionality declaration to avoid severe disruption to public interests such as fiscal stability and legal certainty.

## Conclusion

The Court invalidated key 2014 budget austerity measures, finding public-sector pay cuts unequal (but enforceable until the ruling date), and striking down both benefit contributions and survivors’ pension reduction rules as unconstitutional for disproportionality or unjustified inequality.


Ruling No. 413/14 (Port. Const. Ct. 2014)