FRATRIK v. SLOVAKIA
Inadmissible
Nicolas Bratza
The applicant, Peter Frátrik, is a Slovakian national, who was born in 1951 and lives in Trnava, Slovakia. The respondent Government were represented by their Agent, Mr P. Vršanský, succeeded by Mr P. Kresák in that function. The facts of the case, as submitted by the parties, may be summarised as follows. On 5 November 1992 the applicant was granted a trade licence (živnostenský list) entitling him, inter alia, to run a business in musical instruments. He thus became a selfemployed person. On 5 January 1993 the applicant registered himself with the health insurance fund (nemocenské poistenie) and with the pension fund (dôchodkové zabezpečenie). In 1993, for income tax purposes, the applicant declared to have earned an annual income of 9,550 Slovakian korunas (SKK) from his selfemployment activity. In 1994 he declared an annual income of SKK 7,595, in 1995 SKK 11,050, in 1996 SKK 18,225 and in 1997 SKK 2,850. On 1 January 1995 the Social Security Administration Act no. 274/1994 Coll. (Zákon o Sociálnej poisťovni - “the 274/1994 Act”) entered into force. This Act regulates inter alia the obligation to contribute to the health insurance fund and the pension fund, the calculation of these contributions and the modalities of their payment. Self-employed persons, like the applicant, are required to pay contributions to both funds, the amount of which is calculated on the basis of their average monthly taxable income gained during the previous fiscal year. The Act also defines the minimum and the maximum amount of such contributions (see under “Relevant domestic law” below). On 8 September 1997 the Trnava branch office (pobočka) of the Social Security Administration (Sociálna poisťovňa) ordered the applicant to pay within 15 days a contribution of SKK 24,978 to the health insurance fund and the pension fund for the period between on 1 January 1995 and 30 June 1997. This amount was composed of SKK 9,504 for the fiscal year 1995 (i.e. SKK 792 per month), SKK 10,236 for 1996 (i.e. SKK 793 per month until April 1996 and SKK 873 per month as from April 1996), and SKK 5,238 for 1997 (i.e. SKK 873 per month). The applicant was informed that failure to pay or a late payment entailed the imposition of a fine. The applicant filed an appeal with the Head Office (ústredie) of the Social Security Administration arguing that, given his low income, he could not afford to pay these contributions. On 24 October 1997 the Head Office of the Social Security Administration upheld the decision of its Trnava branch. The applicant filed an administrative law appeal with the Trnava Regional Court (Krajský súd) against the decisions taken by the Social Security Administration. The applicant submitted that his income was below the statutorily defined minimal living standard (životné minimum) and argued that, in these circumstances, he should be exempted from his payment obligations under the 274/1994 Act. In his opinion, the application of this Act in his personal situation was unethical and unconstitutional. In its judgment of 24 September 1998 the Regional Court upheld the challenged decisions. No appeal was available against this judgment. It became final and binding on 30 October 1998 when it was served on the applicant. In 1998 and in 1999 the applicant declared to the income tax authorities that he had earned an annual income of SKK 8,737 and SKK 675 from his selfemployment activity. On 17 May 1999 the Trnava branch office of the Social Security Administration ordered the applicant to pay within 15 days a contribution in the amount of SKK 20,742 to the health insurance fund and the pension fund for the period between 1 July 1997 and 30 April 1999. This amount was composed of SKK 5,238 payable for the fiscal year 1997 (i.e. SKK 873 per month as from July until December 1997), SKK 11,628 for 1998 (i.e. SKK 969 per month) and SKK 3,876 for 1999 (i.e. SKK 969 per month until April 1999). On 25 May 1999 the Trnava branch office of the Social Security Administration ordered the applicant to pay a fine of SKK 2,065 for late payment of his contributions to the health insurance fund and the pension fund for the years 1995 and 1996. On the applicant's request, his trade licence was cancelled on 31 May 1999. The applicant has been unemployed since. On 3 June 1999 the applicant was informed by a judicial enforcement officer that enforcement proceedings had been brought against him in order to obtain payment of the contributions due as well as the fines for late payment. According to the applicant, he was thus forced to contract debts in order to pay the amounts due. On 16 November 1999, after having conducted an audit of the applicant's situation, the Trnava branch office of the Social Security Administration found that the applicant still owed a total amount of SKK 138,221 in fines for late payments of his contributions to the social funds for the years 1993 - 1999. Under Section 4a § 1 (b) persons who hold a trade licence for carrying out a small trade (živnosť) are considered selfemployed persons. Section 6 § 1 (c) provided that selfemployed persons took part in and were entitled to benefit from the pension schemes. These pension schemes comprise, inter alia, the oldage pension, the (partial) invalidity pension, and the widow pension (Section 7). Sections 145a and the following govern the participation of selfemployed persons in the health insurance and the pension insurance schemes. Under Section 145b § 1 selfemployed persons are entitled to health insurance benefits such as sickness benefits (nemocenské), maternity benefits (peňažná pomoc v materstve), and spa treatment benefits (kúpeľná starostlivosť). According to Section 145ba § 1, the sickness benefits for selfemployed persons are paid on a daily basis. Under Section 145ba §§ 2 and 3 the amount of such benefits is calculated as a daily average of the “assessment basis” (see below). Under Section 14 §§ 1 (b) and 2 selfemployed persons are liable to pay contributions to the health insurance fund and the pension fund. According to Section 15 § 1 the level of these contributions are a “percentage” of the “assessment basis” (vymeriavací základ), which is 50% of the average monthly taxable income earned by a self-employed person during the previous fiscal year (Section 16 § 4 in conjunction with Section 17 § 2 of the Act). The “percentages” applicable to selfemployed persons varied in the course of the material period. Until 31 December 1995 it was 4.8 % for the health insurance fund and 27.5 % for the pension fund. Since 1 January until 31 December 1996 the applicable “percentages” were respectively 3.8 % and 28.5 %. Since 1 January 1997 these “percentage” changed again to 4.8 % and 27.5 %, respectively. However, regardless of income actually earned by a selfemployed person during the previous fiscal year, Section 16 § 8 provides that his or her personal “assessment basis” cannot be lower than the statutorily defined “minimal assessment basis” and cannot be higher than the statutorily defined “maximal assessment basis”. The minimal basis is equal to the statutorily defined “minimum wage” (see below) and the maximal basis is this “minimum wage” multiplied by eight. Until 31 March 1996, the “minimum wage” was defined by the governmental Decree no. 53/1992 Coll. on Minimum Wage (Nariadenie vlády o minimálnej mzde), as amended. From 30 October 1993 until 31 March 1996 the “minimum wage” was fixed at SKK 2,450 per month. As from 1 April 1996 the “minimum wage” was regulated by the Act no. 90/1996 Coll. on the Minimum Wage (Zákon o minimálnej mzde), as amended. It was increased to SKK 2,700 per month.