Legally and constitutionally, the legislative regulations prepared by the Audit Office for the complex issue of multiple pensions appear to be facing challenges, according to the Legal Office, which have been forwarded to Parliament for potential implementation.
The Legal Service, through its letter to the Ministry of Finance, conducted a general legal analysis of the proposals without prior legislative scrutiny.
Regarding the Audit Office’s recommendation for regulating pension payments in two ways for active officials, the Legal Service emphasises that the proposal leaves existing legislative regulations intact for officials before 31st December 2023 and for those after 1st January 2024.
Pensions will be paid in the 65th year unless the retiree assumes another position, in which case pension payments will be suspended.
The Legal Service asserts that the specific regulation proposed by the Audit Office believes that an official’s knowledge of this regulation would eliminate any constitutional issues, allowing for legal suspension or calculation of pensions.
“However, this regulation does not resolve the constitutional issues of the Koutselinis and Avgousti decisions, as an active official at a later date after 1st January 2024 will have crystallised rights to the pension, which cannot be suspended or calculated with other pensions. The knowledge of the regulation was not deemed an acceptable factor by the Supreme Court in the Koutselinis case, allowing for suspension,” it highlights.
Additionally, it stresses that the proposal should not take into account service in a position within the European Union since MEPs are not paid by the Republic of Cyprus.
Regarding the Audit Office’s second proposal, which suspends the pension of a state employee when assuming another position with a minimum wage of €500, the Legal Service points out that the legislative proposal faces legal problems and would cause practical difficulties if implemented.
For each official, a different amount of compensation would apply, depending on the pension received as a former state employee. Consequently, the specific regulation creates a legal issue because officials in the same position would be compensated differently based on whether they receive a pension from the public sector.
The Legal Service argues that a two-speed system of officials is created, and such a regulation may potentially violate the principle of equal treatment.
The remaining regulations proposed by the Auditor General, mentioned in the letter, are said to present the same legal problems of unconstitutionality identified in the first two proposals.
