Abstract
Equilibrium between financing and social security rights, aimed at protecting the intergenerational pact, holds the potential to shape a new doctrine: the intergenerational pact in the Italian social security system is based on Article 38 and Article 81 of the Italian Constitution. Article 38 regulates the social security rights’ frame. Article 81 states the legal mechanism grounding the social security financing schemes. This essay intends to explore a topic previously not fully addressed in scholarly commentary: how Article 81 of the Italian Constitution is becoming the unifying principle for a process through which the Italian constitutional case law is brought into alignment with mainstream European attitude to consider the social rights entitlements in combination with the budget equilibrium and the intergenerational pact. Such combination is majoritarian, not only related to acts of judicial will, because directly arising from Article 9 TFEU. Indeed such combination is accepted because the Italian Constitutional Court’s insights about the budget equilibrium and the intergenerational pact are consistent with long-term changes in industrial and market attitudes. As these attitudes evolved, so did the social meaning of the budget equilibrium and the intergenerational pact.
The main items of this essay were developed on the basis of the Italian Report, concerning the Italian social security system and the legal concept of sustainability, I carried out for the 2018 Congress of the International Academy of Comparative Law – Japan (http://www.congre.co.jp/iacl2018/).
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Notes
- 1.
- 2.
See the definition that Boeri and Galasso (2010), p. 3, elaborated on the NDC regime.
- 3.
- 4.
- 5.
See the historical frame in Schoyen and Stamati (2013), p. 79.
- 6.
More recently Act No. 4/2019 reshaped the schemes related to the anticipation of the old age pension for some categories of workers, facilitating the access to the old age pension of a special and limited cluster of workers (i.e. born between 1952 and 1957). Such 2019 regulation does not properly take into consideration the long term sustainability of the Italian social security system.
- 7.
Cf. two Constitutional Court judgments issued in 2018, showing the painstaking interpretative approach the Constitutional Court in adopting in relation to the interaction between Article 81 Cost. and the social security system; in particular, cf. judgment no. 12 dated 30 January 2018 and Constitutional Court judgment no. 20 dated 2 February 2018, which stresses that the lack of a detailed description of financial needs and savings is considered as a sign of the unreasonableness of the balance struck by lawmakers on a case-by-case basis.
- 8.
See Sterpa (2015), p. 1.
- 9.
Cf. the observations by Holmes and Sunstein (2000), p. 1 ff.
- 10.
From an intergenerational perspective, the financial burden entailed by rights is monitored by the Government, the Parliament, the President of the Republic and, if called upon to balance rights, also by the Constitutional Court. Concerning intergenerational equity and Article 81 Cost., cf. the research by Lupo (2011), p. 1, according to whom the constitutional value undoubtedly underlying the budgetary balance principle is intergenerational equity. Cf. also the observations by Bozzao (2017), p. 1 ff.
- 11.
- 12.
In particular, Cinelli (2015), p. 441, who outlines this issue in a very effective way.
- 13.
In this regard, Sandulli (2016), p. 687.
- 14.
In this regard, cf. also the argument underlying Constitutional Court judgment no. 7 dated 11 January 2017, from which it can be inferred that the savings set out by provisions inspired by Article 81 Cost. are deemed to be unconstitutional in relation to Articles 3, 38, and 97 Cost. inasmuch as they set out that the sums stemming from the expenditure cuts envisaged by such provision are paid annually by the National Pension and Social Security Fund of Registered Accountants into a specific revenue heading of the state budget. Cf. the commentary by Mastroiacovo (2017), p. 52.
- 15.
Following Constitutional Court judgment no. 70/15, Article 24, paras. 25 e 25a of Decree Law no. 201/11 was modified by Decree Law no. 65 dated 21 May 2015 (turned with modifications into Law no. 109 dated 17 July 2015), by Article 1, para. 483 of Law no. 147 dated 27 December 2013, and by Article 1, para. 286 of Law no. 208 dated 28 December 2015. Cf. the analysis on case law conducted by Bozzao (2015), p. 362. Cf. also the two main orientations emerging from among social security law scholars; on the one hand, cf. the paper by Pandolfo (2015), as well as Sandulli (2015), p. 559; a different view has been expressed by Pessi (2015), p. 400.
- 16.
See also judgment no. 316 dated 3 November 2010, the Italian Constitutional Court.
- 17.
Since the very limited extent of the adjustment—in breach of the principle of proportionality between pension and pay, and of the principle of adequacy of the social security benefit—alters the principle of equality and reasonableness, causing unjustified discrimination against pensioners. In this regard, cf. the observations by Sgroi (2015), p. 1 and by Giubboni (2015), p. 1. Cf. also D’Onghia (2015a, b), p. 319; Garofalo (2015), p. 680.
- 18.
Moreover, according to Constitutional Court judgment no. 250/2017, the rule of reasonableness, which should be referred to in the framework of the disputes concerning equalization, does not even coincide with the method at the basis of the proportionality test that is used at EU level to strike a fair balance between social rights and economic freedoms (see the argumentations of Portuese 2013, p. 612 ff.). The systemic misunderstanding of this issue is behind all problems relating to equalization or similar matters (cf. also more recently Constitutional Court judgment no. 259 dated 22 November 2017). This is why the use, by the Constitutional Court, of clearer language helps the system better understand the framework of individual pension rights. In this regard, the Constitutional Court, in 2017, purposely stressed that the application of the rule of reasonableness, which is exclusively aimed at assessing the goals and technical aspects of a social security legislative provision, should not be confused with the assessment of the adequacy of the measures adopted, on a case-by-case basis, by lawmakers in order to meet old people’s life needs.
- 19.
In judgment no. 250/2017, the Constitutional Court maintains that ‘the provisions referred to are explained in detail in the “Report”, the “Technical Report”, and the “Assessment of Calculations” related to the draft act aimed at transposing such decree into law (Chamber of Deputies Draft Act no. 3134). These parliamentary acts include accounting data that confirm the approach adopted by lawmakers, in compliance with national and EU legislation’.
- 20.
Constitutional Court judgment no. 250/2017 does no longer emphasize that the link between Article 36 and Article 38 Cost. becomes more and more pressing’ as life expectancy increases, along with the expectation, among those who receive a pension, to live a free and dignified life, pursuant to Article 36 Cost. (cf. specifically para. 8 of Constitutional Court judgment no. 70/2015, which was no longer included in 2017). The Constitutional Court did not conduct a critical review of the notion of adequacy, and did not take into consideration the ‘radical changes that affected the system: i) the alleged state of need epitomized by the term “old age”, whose demographic risk now covers a far longer time span than in the past; ii) the accrual of contributions, increasingly linked to extremely variable and flexible work-related situations, with a large-scale recourse to notional social security contributions, in the framework of an individual capitalization system; and iii) the adoption of a financial parameter based on GDP trends – which, among other things, have unexpectedly turned out to be negative’.
- 21.
Except in the framework of the parameters and coefficients set by Law no. 335 dated 8 August 1995 and subsequent amendments, there is no entitlement to receive a pension benefit conceived as deferred pay or income to be paid over an extended period of time.
- 22.
Such assessment power does not exist in relation to pensions, let alone in relation to pay. See Sandulli (2015), p. 515, who rightly holds that automatic wage mechanisms have since long stopped having a role; the Constitutional Court itself (see judgments nos. 124/1991 and 34/1985) acknowledges the legitimacy of the rules on the elimination of the pay adjustment mechanism, tackling a (at that time) very sensitive issue concerning the link between legislation and collective bargaining in relation to the underlying idea of public economic order.
- 23.
See, for instance, “+Europa” proposal in https://piueuropa.eu/wp-content/uploads/2018/11/generazioni.pdf.
- 24.
Sachs (2015), p. 1 ff.
- 25.
See 2018 EISS workshop materials here—in http://eiss.be/eiss%202018%20presentations-2.html.
- 26.
- 27.
The Social Scoreboard has 12 headline indicators that can be used to measure and compare Member States’ performance in the Joint Employment. The performance is based on two different parameters. On the one hand, the level of the indicator as it is, and, on the other side, the progress made compared to the previous year.
- 28.
See Schoukens et al. (2018), p. 219.
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Faioli, M. (2020). Beyond the Formal Principle of Intergenerational Sustainability in the Italian Social Security System. In: Kasagi, E. (eds) Solidarity Across Generations. Ius Comparatum - Global Studies in Comparative Law, vol 49. Springer, Cham. https://doi.org/10.1007/978-3-030-50547-9_3
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