Ruling No. 413/14

In Portugal, unemployment benefits were considered compensation for the government’s failure to manifest an individual’s right to work. The sickness benefit derived from the constitutional right to social security and solidary. During a global economic downturn, many European countries faced fiscal crises. In response, the European Union (EU) and nongovernmental organizations, such as the International Monetary Fund (IMF), provided loans and other financial support to help stabilize the economies of afflicted countries. The financial support was provided contingent on the imposition of austerity measures to reduce government spending. After accepting funds to stabilize the economy and committing to lowering its public deficit, Portugal adopted new financial measures to limit government spending and comply with its commitments to its lenders. In 2014, the Portuguese legislature passed the State Budget Law for 2014 (the budget law). The budget law included provisions that required a 5 percent deduction from sickness benefits and a 6 percent deduction from unemployment benefits. The deductions were to constitute income for the Portuguese welfare system. The Portugal Constitutional Court received multiple requests to review the constitutionality of the budget law, including two from groups of national assembly members (plaintiffs).