CEDH · CASELAW;JUDGMENTS;GRANDCHAMBER;ENG — 5 septembre 2017

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HUNGARY   (Application no. 78117/13)                       JUDGMENT       STRASBOURG   5 September 2017         This judgment is final but it may be subject to editorial revision. In the case of Fábián v. Hungary, The European Court of Human Rights, sitting as a Grand Chamber composed of:   Guido Raimondi, President ,   Angelika Nußberger, Mirjana Lazarova Trajkovska, Luis López Guerra, András Sajó,   Işıl Karakaş,   Kristina Pardalos,   André Potocki,   Valeriu Griţco,   Faris Vehabović,   Ksenija Turković,   Branko Lubarda,   Yonko Grozev,   Síofra O’Leary,   Carlo Ranzoni,   Stéphanie Mourou-Vikström,   Pauliine Koskelo, judges, and Søren Prebensen, Deputy Grand Chamber Registrar, Having deliberated in private on 9 November 2016 and on 31 May 2017, Delivers the following judgment, which was adopted on the last ‑ mentioned date: PROCEDURE 1.     The case originated in an application (no. 78117/13) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Hungarian national, Mr Gyula Fábián (“the applicant”), on 5 December 2013. 2.     The applicant was represented by Mr A. Grád, a lawyer practising in Budapest. The Hungarian Government (“the Government”) were represented by their Agent, Mr Z. Tallódi, of the Ministry of Justice. 3.     The applicant alleged that the suspension of disbursement of his State old-age pension while he was employed within the public sector amounted to unjustified and discriminatory interference with his property rights contrary to Article 1 of Protocol No. 1 taken alone and in conjunction with Article 14 of the Convention. 4 .     The application was allocated to the Fourth Section of the Court (Rule   52 §   1 of the Rules of Court). The Government were given notice of the application on 25 August 2014. The Government’s observations on the admissibility and merits of the application were submitted on 17 December 2014. The applicant’s observations in reply were submitted on 9 February 2015. 5.     On 15 December 2015 a Chamber composed of Vincent A. De Gaetano, President, András Sajó, Boštjan Zupančić, Nona Tsotsoria, Paulo Pinto de Albuquerque, Krzysztof Wojtyczek, Iulia Antoanella Motoc, judges, and Françoise Elens ‑ Passos, Section Registrar, delivered its judgment. It unanimously declared the application admissible and held that there had been a violation of Article 14 of the Convention read in conjunction with Article 1 of Protocol No. 1 to the Convention in respect of the difference in treatment between pensioners employed in the public sector and pensioners employed in the private sector as well as between pensioners employed in different categories of the public sector. The Chamber considered that it was not necessary to examine the alleged violation of Article 1 of Protocol No. 1 taken alone. 6.     On 11 March 2016 the Government requested the referral of the case to the Grand Chamber in accordance with Article 43 of the Convention. On 2   May 2016 the panel of the Grand Chamber granted that request. 7.     The composition of the Grand Chamber was determined according to the provisions of Article 26 §§ 4 and 5 of the Convention and Rule 24. 8 .     The applicant and the Government each filed a memorial on the merits (Rule 59 § 1) and also, at the request of the judge appointed as Rapporteur, on the question whether the applicant had complied with the six-month time-limit laid down in Article 35 § 1 of the Convention in so far as he complained under Article 14 taken in conjunction with Article 1 of Protocol No.   1 that there was an unjustified difference in treatment between different categories of State employees. In addition, third-party comments were received from the European Trade Union Confederation, which had been granted leave by the President of the Grand Chamber to intervene in the written procedure (Article 36 § 2 of the Convention and Rule 44 § 3). 9.     A hearing took place in public in the Human Rights Building, Strasbourg, on 9 November 2016 (Rule 59 § 3). There appeared before the Court: (a)     for the Government Mr   Z. Tallódi ,   Agent , Ms   M. Weller ,   Co-Agent ;   (b)     for the applicant Mr   A. Grád ,   Counsel , Ms   R. Novák , Mr   D. Karsai, M r   M.M. K ónya,   Advisers .   The Court heard addresses by Mr Grád and Mr Tallódi, and replies by them to questions put by the judges. THE FACTS I.     THE CIRCUMSTANCES OF THE CASE 10 .     The applicant was born in 1953 and lives in Budapest. 11 .     He had been employed as a police officer when, having reached an age when he was entitled to do so, he took early retirement and started receiving a “service pension” ( szolgálati nyugdíj ) from 1 January 2000, when he was nearly 47 years old. The applicant, however, continued to work: he was employed in the private sector between 2000 and 2012 and from 1 July 2012 until 31 March 2015 he worked, as a civil servant, as the head of the Road Maintenance Department of the Budapest XIII District Municipality. The applicant paid the statutory contributions to the State old-age pension scheme from the first day of his employment (1 August 1973) until 31   March 2015. 12 .     On 28 November 2011 Parliament enacted Act no. CLXVII, which entered into force on 1 January 2012. According to section 5(1) of that law, service pensions like that of the applicant were converted into a “service allowance” ( szolgálati járandóság ), provided that the person concerned was born in or after 1955. Pursuant to section 3(2)(b) of the same Act, for recipients of a service pension who, like the applicant, were born in or before 1954, the service pension was to be converted into an old-age pension. 13 .     On 1 January 2013 an amendment to Act no. LXXXI of 1997 on Social-Security Pensions (hereafter “the 1997 Pensions Act”) entered into force, according to which the disbursement of those old-age pensions whose beneficiaries were simultaneously employed in certain categories within the civil service would be suspended from 1 July 2013 onwards for the duration of their employment (see also paragraphs 23-28 below). No such restriction was put in place in respect of those who were in receipt of an old-age pension while being employed within the private sector. 14 .     On 18 February 2013 the National Pensions Administration ( Országos Nyugdíjbiztosítási Főigazgatóság ) sent a letter to the applicant in his capacity as the recipient of an old-age pension, informing him of the amended legislation and instructing him to make a declaration as to whether he was employed in the civil service, in one of the categories concerned by the amendment of 1 January 2013. By a letter of 29 April 2013 the applicant notified the National Pensions Administration of his employment situation. Subsequently, on 2 July 2013, the National Pensions Administration informed the applicant that the disbursement of his pension had been suspended as of 1 July 2013. At that time his pension amounted to 162,260 Hungarian forints (HUF; at that time approximately 550 euros (EUR)) per month. 15.     On 15 July 2013 the applicant lodged an administrative appeal with the National Pensions Administration (see paragraph 21 below) against the suspension of his pension payments in which he argued that his pension constituted an acquired right and that he was being discriminated against since pensioners working in the private sector continued to receive their pensions. 16.     The National Pensions Administration sought further information from the applicant on 23 July 2013. The applicant elaborated on his appeal on 1 August 2013, referring, inter alia , to an application filed by the Ombudsman with the Constitutional Court in May 2013 (AJB-726/2013). In that application the Ombudsman set out the complaints which had been made to his Office about the amendment of the 1997 Pensions Act and raised the issue of a difference in treatment between pensioners employed in the civil service and those employed in the private sector. As far as the Court is aware, this case is currently still pending before the Constitutional Court. 17 .     On 27 September 2013 the National Pensions Administration discontinued the proceedings concerning the applicant’s appeal, holding that the applicant had failed to provide the information sought from him on 23   July 2013. 18 .     The applicant’s employment with the Budapest XIII District Municipality came to an end on 31 March 2015. On 24 April 2015 the competent authority decided that the disbursement of his pension would be resumed. His pension was increased to HUF 177,705 (at that time approximately EUR 585). II.     RELEVANT DOMESTIC LAW AND PRACTICE 19.     The Fundamental Law of Hungary provides as follows: Article XII “(1)     Everyone shall have the right to freely choose his or her work or occupation and to engage in entrepreneurial activities. Everyone shall be obliged to contribute to the enrichment of the community through his or her work, in accordance with his or her abilities and opportunities. (2)     Hungary shall strive to create the conditions to ensure that everyone who is able and willing to work has the opportunity to do so.” 20 .     At the relevant time, the employment of civil servants ( közalkalmazott ) was regulated by Act no. XXXIII of 1992 on the Legal Status of Civil Servants; the employment relationship of public officials ( köztisztviselő ), Government officials ( kormánytisztviselő ), officials in charge of public service administration ( közszolgálati ügykezelő ) and, in relation to some aspects, senior State officials ( állami vezető ) was governed by Act no. CXCIX of 2011 on Public Servants. Employment relationships in the private sector were governed by Act no. I of 2012 on the Labour Code. 21 .     The Hungarian compulsory social-security pension scheme is a contributory one. Persons in employment (be it in the public or private sector) pay a certain percentage – ten percent in 2013 – of their monthly income from work towards the scheme. Moreover, employers, private entrepreneurs and primary producers pay a social contribution tax of 27% of the amount of salaries paid, which goes, in whole or in part – the decision being made periodically on the basis of financial circumstances – towards the maintenance of the social-security pension system. The Pension Fund ( Nyugdíjbiztosítási Alap ) thus obtained represents an item in the State budget. Pensions are paid from the Fund by the National Pensions Administration, which is a Government agency. If the Fund’s expenditures exceed its revenues, the State shall secure the necessary resources from the central budget. 22 .     The periods during which a person contributes to the scheme qualify as service time. The amount of pension paid out under the scheme, which is not subject to tax, is dependent on the service time and on that part of a person’s income which was subject to compulsory contributions. 23 .     In recent years, a number of measures were taken to terminate or reduce the concurrent receipt of State-paid pensions and State-paid salaries. Firstly, on 29 December 2012 Government Decree no. 1700/2012 on the principles of pension policy applicable to the civil service was issued. It prohibited the employment by central Government of persons entitled to an old-age pension, and stipulated that it was only in exceptional cases that vacancies could be filled by persons entitled to such a pension. Secondly, the 1997 Pensions Act was amended on 1 January 2013 to prohibit the simultaneous disbursement of remunerations financed by the central budget and old-age pensions or early-retirement pensions. This amendment applied, inter alia , to pensioners employed by local government bodies. A number of categories of persons in State employment were, however, exempted from the suspension of pension payments, such as members of Parliament, mayors, and judges and prosecutors on administrative leave, as well as persons employed in the public sector under the rules of the Labour Code who carried out tasks not related to the exercise of public powers. 24 .     Sections 83/C and 102/I of the 1997 Pensions Act as amended on 1   January 2013 provided as follows: Section 83/C “(1)     The disbursement of an old-age pension shall be suspended ... if the pensioner concerned is employed as a civil servant, a government official, a senior State official, a public official, an official in charge of public service administration, a judge, an officer of the court, an officer of the prosecutor’s office, a professional member of an armed service, or a professional member or contractor of the Hungarian Defence Force. ... (3)     For the period of suspension of the old-age pension the person concerned shall qualify as a pensioner. (4)     Disbursement of the old-age pension may be continued at the pensioner’s request, if the beneficiary proves that the employment in subsection (1) above has been terminated. ....” Section 102/I “(1)     Beneficiaries of an old-age pension working in any of the employments listed in section 83/C(1) on 1 January 2013 shall notify the pensions disbursement agency thereof by 30 April 2013. (2)     The old-age pension of persons working in any of the employments listed in section 83/C(1) on 1 January 2013 shall be suspended from 1 July 2013, provided that such employment is maintained on that date.” 25.     The lawmaker’s explanation of section 83/C contains the following passage: “The amendment introduced the prohibition of double compensation in respect of the employment relationships of civil servants, government officials, senior State officials, public officials, officials in charge of public service administration, judges, officers of the court or the prosecutor’s office, professional members of an armed service, as well as professional members and contractors of the Hungarian Defence Force. Accordingly, persons working in such employments may not receive an old-age pension ... in addition to their remuneration, with the result that such payments must be suspended by the pension disbursement agency for the term of the employment.” 26.     In the decision to suspend pension payments under section 83/C(1) no account is taken of the amount of salary being earned by the person concerned. 27 .     Beneficiaries of pension payments under the compulsory social ‑ security pension scheme who are at the same time in employment contribute to the scheme in the same way as other employed persons (see paragraph 21 above). They may request a yearly increase of their monthly pension payment in an amount of 0.5% of one-twelfth of their income from work carried out during a calendar year. If disbursement of the pension has been suspended under section 83/C(1) of the 1997 Pensions Act, the payment of any such yearly increases is suspended as well. Once disbursement resumes, the yearly increases will be added to the amount of pension that was received prior to the suspension. 28 .     According to data supplied by the Government, the number of persons in receipt of an old-age pension on 1 July 2013 was 2,007,426. The pension payments of a maximum number of 5,288 persons were suspended at any one time in the course of 2013 under section 83/C(1) of the 1997 Pensions Act. The maximum number of persons concerned at any one time in 2014 was 4,545; in 2015 4,212; and, in the period between January and August 2016, 3,945. Between March 2013 and August 2016 an amount of HUF 30,602,215,675 (at the last-mentioned date approximately EUR 98 million) was not disbursed as a result of the amendment of the 1997 Pensions Act. However, persons who worked in the public health-care sector and who had their pension payments suspended pursuant to section 83/C(1) of the 1997 Pensions Act (3,169 persons between July 2013 and August 2016) were provided by the National Health Fund with monthly compensation equal to the amount of their pension. Between July 2013 and August 2016 such compensation amounted to HUF   25,190,700,000 (at the last-mentioned date approximately EUR   81   million), which reduced the total amount of savings in State expenditure to HUF 5,411,515,675 (approximately EUR 17 million in August 2016). 29 .     Act no. CLXXVIII of 2012 on the amendment of certain tax-related legislation amended the 1997 Pensions Act and entered into force in January 2013. This amendment abolished the previously existing ceiling in respect of statutory contributions to the pension scheme, in order to increase the revenues of the Pension Fund. 30 .     In 2000 the general statutory retirement age for men in Hungary was 62; an old-age pension could be drawn by those who had reached that age and had completed at least twenty years’ service. That age was subsequently, and gradually, raised to 63 for both men and women born in 1953. Various early-retirement schemes used to be statutorily available, both in the public sector (including the armed forces, to which, in Hungary, also the police belong) and the private sector, and over the years a great number of persons opted to make use of such schemes. From 1 January 2012 onwards those schemes – inasmuch as new entrants were concerned – were abolished by the entry into force of Act no. CLXVII (see also paragraph 12 above). III.     COMPARATIVE-LAW MATERIAL 31.     The Court conducted a comparative study of the legislation of 36 member States [1] of the Council of Europe. A.     Possibility of simultaneous receipt of a State pension and a salary 32.     In almost all of the 36 States surveyed it is possible, in one way or another, to receive a State pension and a salary simultaneously. Only in the former Yugoslav Republic of Macedonia is the State pension suspended, without exception, if the person continues to work and receive a salary. 33.     However, in the vast majority of States, some form of reduction or suspension of the pension is applied in various situations. These can broadly be divided into the following categories. 1.     Beneficiaries of an early-retirement pension 34.     Many States’ legislation distinguishes between people who retire early and people who retire at the legal age of retirement (usually between 60 and 65). Thus, in Andorra, Croatia, the Czech Republic, Estonia, Latvia, Romania and Slovakia, payment of the State pension is suspended while the person continues to work, if he or she retired before reaching the statutory age of retirement. In Portugal, such suspension is applied for three years if the person continues to work for the same company or group of companies. 35.     Meanwhile, in some States such as Austria, Denmark, Germany, Luxembourg, Poland and Sweden, an early-retirement pension is reduced or suspended only if the salary earned reaches a certain level. This reduction applies in Iceland not only to early-retirement pensions, but to all forms of pension. In Finland, a person’s early-retirement pension is not affected in any way by further employment. 2.     Persons who continue to work in the public sector 36 .     In some of the States surveyed, the pension payment is suspended for people who continue to work in the public sector, whilst no obstacles apply in the private sector (see also paragraphs 38-43 below). 3.     Beneficiaries of a disability or invalidity pension 37.     There are some differences between how the States surveyed regulate salary earned simultaneously with a disability or invalidity pension. In some States such as Austria, reductions are applied if the total amount of pension and salary exceeds a certain threshold. In Croatia and Italy, the accumulation of pension and salary is not possible. On the other hand, pension payments are not suspended for disabled people in Ukraine. Accumulation is also possible in Romania for pensioners with a third-degree invalidity and blind persons. B.     Differences between employment in the private and public sectors when pension payments may be reduced or suspended 38 .     As stated above (paragraph 36), some States suspend State pension payments for people who continue to work in the public sector, whereas they may retain full payment if they continue to work in the private sector. For example, in Andorra, the retirement pension of a civil servant is suspended if that person continues to work as a civil servant or agent in the public administration. In Georgia, suspension of a pension would apply to all categories of jobs in the public sector. A person who continues to work in the private sector in Portugal may simultaneously receive a State pension, while the pension is suspended in the public sector. In Spain, Turkey and Ukraine, accumulation is possible for self-employed persons (up to a certain level), but not for most public-sector employees. 39.     In Azerbaijan, while accumulation is possible without a suspension or reduction of the State pension, some categories of public-sector employees, including civil servants, are entitled to supplements to the pension. Supplements are calculated based on a certain percentage of the average salary during the employment period. These supplements will be reduced, or even suspended in some situations. However, they are not reduced or suspended if the person continues to work in the private sector. 40.     The same goes for a special form of public-service pension in Denmark. Payment of the public-service pension is suspended if the person continues to work as a public servant, but not if he or she continues to work in the private sector. 41.     In Italy, if the total amount of public-sector employees’ earnings (including old-age pension) exceeds a certain (quite high) threshold, their salary is reduced to the level of that threshold, while the amount of pension remains the same. 42.     In Austria, conversely, public servants, but not private-sector employees, are exempted from the reduction applied to pension payments. 43 .     However, a majority of the States surveyed do not make a distinction between the public and private sectors regarding whether pension payments may be reduced or suspended. THE LAW I.     ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TAKEN ALONE 44.     The applicant complained that the suspension of disbursement of his old-age pension amounted to a violation of Article 1 of Protocol No. 1 to the Convention, which reads as follows: “Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.” A.     The Chamber judgment 45.     In its judgment, the Chamber first examined the applicant’s complaint under Article 14 of the Convention taken in conjunction with Article 1 of Protocol No. 1. Having reached a finding of a violation in that respect, the Chamber considered that it was not necessary to examine whether the facts of the case also constituted a violation of Article 1 of Protocol No. 1 taken alone. B.     The parties’ submissions to the Grand Chamber 1.     The applicant 46.     The applicant submitted that it followed from the Court’s case-law that, as a result of his regular contributions to the State pension scheme from the first day of his employment on 1 August 1973, he had acquired a property right in the form of a legitimate expectation, which therefore entailed the applicability of Article 1 of Protocol No. 1. Owing to the application of section 83/C of the 1997 Pensions Act, he had been deprived of his entire monthly pension. He argued that this deprivation could not be justified by the general interest and was not proportionate. 47.     The applicant accepted that the Government enjoyed a wide margin of appreciation in assessing the requirements of the general interest. However, in his opinion, it was not enough for the Government merely to refer to the general interest without demonstrating that the impugned measure was actually required by that interest. He contended that in this regard the present case fell to be distinguished from the case with which the Government sought to compare it ( Panfile v. Romania (dec.), no. 13902/11, 20   March 2012), in that in Romania the legislative measure prohibiting the simultaneous receipt of a State-paid pension and a salary acquired through State employment had been taken at the height of the financial crisis, and had been lifted when that crisis had abated. In contrast, by the time the amended legislation had entered into force in Hungary (1 July 2013), Hungary had already ceased to be subject to the EU excessive deficit procedure, the release from which had been the aim of the legislation. In addition, the Government had declared in 2013 that the country’s economic situation was excellent, and also from their ambitious spending plans it appeared that they were of the view that the economic crisis was over. 48.     The measure was in any event not fit for the purpose it claimed to pursue, since it only affected a small group of pensioners, bearing in mind that pensions continued to have to be paid to pensioners working in the private sector and to those pensioners employed in the public sector who had been exempted from the ban on accumulation of State-paid pensions and salaries. In addition, in the same year, 2013, the pension ceiling had been raised considerably: whereas it had previously not been possible for a monthly pension to exceed HUF 300,000 (at that time approximately EUR   1,020), the highest monthly pension paid out had now reached HUF   2,000,000 (currently approximately EUR 6,500). Having regard to those factors, the impugned measure could not even in theory have contributed to helping Hungary obtain release from the excessive deficit procedure. The savings actually made currently amounted to no more than 0.0001% of Hungary’s gross domestic product (GDP). 49 .     For the measure to have a genuine impact on the State budget, it should have provided for the suspension of pension payments to precisely those persons in State employment who had been exempted from such suspension, as it was they who were in receipt of substantially higher pensions than the persons, like the applicant, who had had their pension payments suspended. Moreover, those State employees’ earnings were also considerably higher than the applicant’s salary and the suspension of their pension payments would thus not have had the same impact on them as it had had on the applicant, who had only taken up employment after his retirement out of financial necessity. In that connection he submitted that his pension had been lower than the general monthly salary before tax in Hungary which, according to Hungary’s Central Statistical Office, had stood at HUF 229,700 a month (at that time approximately EUR 780) between January and November 2013. 50.     No account had, however, been taken of his income when it was decided that the disbursement of his pension was to be suspended. This also distinguished the case from Panfile , since in Romania the ban on the accumulation of State-paid pensions and salaries only applied if a person’s pension exceeded the national average salary before tax. 51 .     The applicant had, moreover, taken out a bank loan on the basis of his income consisting of his pension and his salary, and, following the suspension of his pension payments, had encountered problems reimbursing that loan. The loss of half his income had caused, and continued to cause, serious repercussions for his circumstances and those of his family. The applicant concluded that he had been made to bear an excessive and individual burden. 52.     Finally, the applicant disputed the Government’s claim that other Council of Europe member States had identical or even similar legislation in place. 2.     The Government 53.     The Government acknowledged that the pension right at issue in the applicant’s case was a pecuniary right for the purposes of Article 1 of Protocol No. 1. While they accepted that the impugned measure constituted interference with the peaceful enjoyment by the applicant of that right, they disputed that it amounted to a total deprivation of his entitlements. 54.     The Government further argued that the interference was legitimate and served the general interest. At the hearing before the Grand Chamber they submitted that, owing to an imbalance in the ratio of pension recipients as opposed to pension contributors – caused, inter alia , by an ageing population and the statutory availability of early-retirement schemes – the Hungarian State pension system had been facing serious challenges, with the situation being exacerbated by the 2008 global economic crisis. A number of measures had therefore been taken in order to reform the pension system. One such measure had been the abolition in 2013 of the ceiling on monthly pension contributions (see paragraph 29 above), which had been incorrectly described by the applicant as the elimination of the maximum amount that could be received by way of a monthly pension; in fact, the law in force prior to the measure had not contained such a maximum. In the short run, the abolition of the ceiling on pension contributions had resulted in a significant increase in the revenues of the Pension Fund and, while in the long run it might also lead to an increase in expenditure, important constraints – such as a highly degressive calculation of pension amounts – were in place to prevent such a development. 55 .     Apart from reforming the pension system, the Government had also taken action in the field of employment policy, aimed at both the reduction of public debt and ensuring a fairer system of burden sharing and distribution of public funds. In 2012, compulsory retirement at the statutory pensionable age with a prohibition on resuming employment had been introduced in the civil service sector by Decree 1700/2012 (see paragraph 23 above) as a means of downsizing that service, where appropriate, and reducing youth unemployment. That decree was applicable only to central Government – that is, ministries and their subordinate bodies – and could thus not impose any obligation on local government bodies to dismiss persons in receipt of pension benefits in their employ. It was to the latter category of employees that the measure at issue in the present case applied; they were given the choice between either discontinuing their employment and continuing to receive their pension, or continuing their employment and having their pension payments suspended. This measure was thus part of a package of measures aimed at securing the long-term sustainability of the pension system, reducing public debt and facilitating the closure of the EU excessive deficit procedure that had been initiated against Hungary (by the Council of the European Union in accordance with Article 126 of the Treaty on the Functioning of the European Union). 56 .     According to the Government, the interference at issue had, moreover, been proportionate. In this connection they referred to the case of Panfile , cited above, which, like the present case, also concerned an applicant who – at the time a law had entered into force prohibiting the concurrent receipt of a pension and a State-paid salary – had been in receipt of pension benefits while simultaneously being in State employment. In that case the Court had noted that, since Mr Panfile had had the choice between continuing to receive his monthly pension and terminating his employment, or having the pension payment suspended while continuing to work for the State, he had not suffered a total deprivation of his entitlements, neither had he been divested of all means of subsistence. In the present case, however, the Chamber had not considered it necessary to examine the applicant’s complaint under Article 1 of Protocol No. 1 taken alone. The principle of consistency required that such an examination be carried out in the present case also. That examination should lead, so the Government argued, to the same conclusion as the Court had reached in Panfile : the applicant had had the choice between receiving his pension or continuing to work, and it was to be assumed that he had elected to stay in employment because his salary was higher than his pension. As his pension had amounted to HUF 162,260 (at that time approximately EUR 550), he must have been in receipt of a monthly salary higher than the average salary in Hungary in 2013 (which had been HUF 151,118 (at that time approximately EUR 515)). For those reasons it could not be said that the applicant had been made to bear an excessive individual burden. 57.     Finally, the Government argued that the Chamber judgment in the present case might entail serious consequences for the social-security systems of a number of member States of the Council of Europe, as in some of those member States (they named seven) national law prescribed the reduction or suspension of pension allowances where the beneficiary was in simultaneous receipt of a salary. C.     The third-party intervener’s arguments 58.     The submissions of the European Trade Union Confederation (ETUC) contained information on legislation in force in the member States of the Council of Europe relating to the accumulation of old-age pension benefits with earnings from work, from which they concluded that the great majority of member States allowed such accumulation. 59.     The ETUC further signalled a growing trend among states towards enshrining the fundamental right to social security in national constitutions. Accordingly, so they argued, any restriction of that right required precise justification. D.     The Grand Chamber’s assessment 1.     Applicability of Article 1 of Protocol No. 1 and the existence of interference 60.     The Court reiterates that Article 1 of Protocol No. 1, which guarantees in substance the right of property, comprises three distinct rules. The first rule, which is set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of peaceful enjoyment of property. The second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions. The third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest, by enforcing such laws as they deem necessary for the purpose. However, the rules are not “distinct” in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule (see, among many other authorities, Sargsyan v. Azerbaijan [GC], no. 40167/06, § 217, ECHR 2015, and James and Others v. the United Kingdom , 21 February 1986, §   37, Series A no. 98). 61.     The Court notes from the outset that at the relevant time the applicant was in receipt of an old-age pension. His entitlement to that pension sprang from paragraph 3(2)(b) of Act no. CLXVII: having been born before 1954, he satisfied the legal requirement for his service pension, of which he had been a recipient since 2000, to be converted into an old-age pension when that Act entered into force on 1 January 2012 (see paragraphs   10 and 12 above). 62.     In the proceedings before the Court there was agreement between the parties that the applicant’s pension entitlements constituted a possession within the meaning of Article 1 of Protocol No. 1 and that suspension of his pension entitlement by virtue of the amendment of 1 January 2013 to the 1997 Pensions Act entailed interference with the applicant’s rights as protected by this provision. The Court sees no reason to disagree. 63.     On the other hand, the Government disputed the applicant’s claim that the matter ought to be considered under the second rule mentioned above, that is to say, that the suspension in fact amounted to a deprivation of property within the meaning of the second sentence of the first paragraph of Article 1 of Protocol No. 1. 64.     The Court has previously held that the modification or discontinuance of supplementary retirement benefits constituted “neither an expropriation nor a measure to control the use of property” (see Aizpurua Ortiz and Others v. Spain , no. 42430/05, § 48, 2 February 2010), and that the reduction of a pension by way of forfeiture was “neither a control of use nor a deprivation of property” (see Banfield v. the United Kingdom (dec.), no.   6223/04, ECHR 2005 ‑ XI). As it did in those two cases, the Court considers that the interference with the applicant’s property rights in the present case falls to be considered under the first rule mentioned above, namely the general principle of peaceful enjoyment of property (see also Lakićević and Others v. Montenegro and Serbia , nos. 27458/06 and 3   others, § 64, 13 December 2011, and Panfile , cited above, § 19). 2.     Compliance with Article 1 of Protocol No. 1 (a)     Relevant principles 65 .     The principles relevant to the present case have recently been set out by the Grand Chamber in its judgment in Béláné Nagy ( Béláné Nagy v.   Hungary [GC], no. 53080/13, ECHR 2016): “112.     An essential condition for an interference with a right protected by Article 1 of Protocol No. 1 to be deemed compatible with this provision is that it should be lawful. The rule of law, one of the fundamental principles of a democratic society, is inherent in all the Articles of the Convention (see Iatridis , cited above, § 58; Wieczorek , cited above, § 58; and Vistiņš and Perepjolkins v. Latvia [GC], no.   71243/01, § 96, 25 October 2012). 113.     Moreover, any interference by a public authority with the peaceful enjoyment of possessions can only be justified if it serves a legitimate public (or general) interest. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to decide what is ‘in the public interest’. Under the system of protection established by the Convention, it is thus for the national authorities to make the initial assessment as to the existence of a problem of public concern warranting measures interfering with the peaceful enjoyment of possessions. The notion of ‘public interest’ is necessarily extensive. In particular, the decision to enact laws concerning social-insurance benefits will commonly involve consideration of economic and social issues. The Court finds it natural that the margin of appreciation available to the legislature in implementing social and economic policies should be a wide one and will respect the legislature’s judgment as to what is ‘in the public interest’ unless that judgment is manifestly without reasonable foundation (see, mutatis mutandis , The former King of Greece and Others v. Greece [GC], no. 25701/94, § 87, ECHR 2000-XII; Wieczorek , cited above, § 59; Frimu and Others v. Romania (dec.), nos. 45312/11, 45581/11, 45583/11, 45587/11 and 45588/11, § 40, 7 February 2012; Panfile v. Romania (dec.), no.   13902/11, 20 March 2012, and Gogitidze and Others v. Georgia , no. 36862/05, §   96, 12 May 2015). 114.     This is particularly so, for instance, when passing laws in the context of a change of political and economic regime (see Valkov and Others , cited above, § 91); the adoption of policies to protect the public purse (see N.K.M. v. Hungary , no.   66529/11, §§ 49 and 61, 14 May 2013); or to reallocate funds (see Savickas and Others v. Lithuania (dec.), no. 66365/09, 15 October 2013); or of austerity measures prompted by a major economic crisis (see Koufaki and ADEDY v. Greece (dec.), nos.   57665/12 and 57657/12, §§ 37 and 39, 7 May 2013; see also da Conceição Mateus and Santos Januário v. Portugal (dec.) nos. 62235/12 and 57725/12, § 22, 8   October 2013; da Silva Carvalho Rico v. Portugal (dec.), § 37, no. 13341/14, 1   September 2015). 115.     In addition, Article 1 of Protocol No. 1 requires that any interference be reasonably proportionate to the aim sought to be realised (see Jahn and Others v.   Germany [GC], nos. 46720/99, 72203/01 and 72552/01, §§ 81 ‑ 94, ECHR 2005 ‑ VI). The requisite fair balance will not be struck where the person concerned bears an individual and excessive burden (see Sporrong and Lönnroth v. Sweden , 23   September 1982, §§ 69-74, Series A no. 52; Kjartan Ásmundsson , cited above, §   45; Sargsyan , cited above, § 241; Maggio and Others , cited above, § 63; and Stefanetti and Others , cited above, § 66). 116.     In considering whether the interference imposed an excessive individual burden the Court will have regard to the particular context in which the issue arises, namely that of a social-security scheme. Such schemes are an expression of a society’s solidarity with its vulnerable members (see Maggio and Others , § 61, and Stefanetti and Others , § 55, both cited above, and also, mutatis mutandis , Goudswaard-Van der Lans v. the Netherlands (dec.), no. 75255/01, ECHR 2005-XI). 117.     The Court reiterates that the deprivation of the entirety of a pension is likely to breach the provisions of Article 1 of Protocol No. 1 and that, conversely, reasonable reductions to a pension or related benefits are likely not to do so. However, the fair balance test cannot be based solely on the amount or percentage of the reduction suffered, in the abstract. In a number of cases the Court has endeavoured to assess all the relevant elements against the specific background (see Stefanetti and Others , cited above, § 59, with examples and further references; see also Domalewski v. Poland (dec.), no. 34610/97, ECHR 1999 ‑ V). In so doing, the Court has attached importance to such factors as the discriminatory nature of the loss of entitlement (see Kjartan Ásmundsson , cited above, § 43); the absence of transitional measures (see Moskal , cited above, § 74, where the applicant was faced, practically from one day to the next, with the total loss of her early-retirement pension, which constituted her sole source of income, and with poor prospects of being able to adapt to the change); the arbitrariness of the condition (see Klein , cited above, § 46), as well as the applicant’s good faith (see Moskal , cited above, § 44). 118.     An important consideration is whether the applicant’s right to derive benefits from the social-insurance scheme in question has been infringed in a manner resulting in the impairment of the essence of his or her pension rights (see Domalewski , cited above; Kjartan Ásmundsson , cited above, § 39; Wieczorek , cited above, § 57; Rasmussen , cited above, § 75; Valkov and Others , cited above, §§ 91 and 97; Maggio and Others , cited above, § 63; and Stefanetti and Others , cited above, § 55).” (b)     Application of these principles to the present case (i)     Whether the interference was “lawful” 66.     The lawfulness of the interference, in terms of domestic law, is not in dispute: the Court is satisfied that it was prescribed by section 83/C of the 1997 Pensions Act (see paragraph 24 above). (ii)     Whether the interference was “in accordance with the general interest” 67.     Bearing in mind the wide margin of appreciation of the State in the field of social security and pensions, the Court finds