Hungarian Benefits Case

Decision 43/1995 (1995)

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Hungarian Benefits Case

Hungarian Constitutional Court
Decision 43/1995 (1995)

Facts

After transitioning from the former communist economy to a social market economy, the Hungarian government (defendant) was facing significant financial challenges. To address the budget shortfall, the Hungarian parliament introduced the Economic Stabilization Act, which included substantial changes to social-welfare programs. Some of the programs were social-insurance programs, similar to the United States’ Social Security system. In these programs, citizens paid into the system through a specific tax charged on income, and they then received the benefits at a later date. Some benefit programs were significantly reduced. Other benefit programs were eliminated completely. All social-benefit programs were to be means tested according to the Economic Stabilization Act. All the changes in the proposed statute were to take effect immediately once the bill was passed. Citizens concerned (plaintiffs) about the changes in the pending legislation urgently petitioned the constitutional court for a ruling on whether the proposed changes violated the constitution. The concerned citizens argued that the Economic Stabilization Act violated the Hungarian constitution, particularly articles 2, 13, and 70/E. Article 2 established Hungary as a democratic, constitutional state. Article 13 protected the citizens’ rights to property and established the conditions and requirements if the government expropriated property. Article 70/E established citizens’ rights to social-welfare benefits, including benefits for old age, illness, disability, widowhood, orphanhood, or unemployment. The Hungarian Constitutional Court reviewed the pending legislation.

Rule of Law

Issue

Holding and Reasoning (Kilenyi, J., and Solyóm, C.J.)

Concurrence (Zlinszky, J.)

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