Addresses the European Court of Justice on the issue of maternity benefit calculations provided that during the whole benefit period a person has not worked in Latvia

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4 January 2017

Department of Administrative Cases of the Supreme Court (SC) in December stayed the proceedings in the case on the maternity benefit calculations provided that a person has the whole insurance period not worked in Latvia, but in institutions of the European Union.

In the present case the applicant has made use of freedom of movement and worked in the EU institution. However, soon after returning to Latvia the event of maternity insurance occurred. The 11 months period of employment outside Latvia falls within period which, according to Latvian law must be taken into account in determining the amount of payment of maternity benefit. Recognizing that during these 11 months the applicant has not worked in Latvia and has not paid social contribution, and confirming as her insurance contribution the wage that is set as average insurance contribution wage in the country, which in the present case is significantly lower than the applicant’s insurance contribution wage after returning to Latvia (on twelfth month of calculation period), the calculated amount of the benefit for applicant is substantially lower than it would be if she would have worked in Latvia all 12 months. In the present case the right of freedom of movement has created unfavorable conditions with respect to the amount of maternity benefit.

In light of these circumstances and taking into account the statement of the European Court of Justice, that such national legislation which in context of granting or calculating the amount of social insurance benefit does not take into account periods of activity during which the person is employed by the European Union institution or insured in accordance with the Joint Sickness Insurance Scheme of the European Institutions, can dissuade citizens of a particular member state to leave their country for the purpose of professional activities in the European Union institution based in another Member State since, since by accepting job offer in such institution, they would lose the opportunity under the national insurance scheme to receive benefits to which they would have been entitled had they not accepted mentioned job offer, as well as free movement of workers restriction, which is in principle illegal, AT decided to refer the preliminary question to the Court of Justice of the European Union on interpretation of Article 4, paragraph 3 of the Treaty on European Union Treaty and Article 45 paragraph 1 and 2 of the Treaty on the Functioning of the European Union,namely, referring the question - whether the mentioned provisions of the law are interpreted in a way that they allow such member state’s regulation as in the present case.

The Supreme Court will continue the proceedings following the entry into force of ruling of the European Court of Justice.

Having heard the case on an appeal, the Administrative Regional Court dismissed an application for issuance of a more favorable administrative act.

 

Information prepared by Baiba Kataja, the Press Secretary of the Supreme Court

Tel.: +371 67020396; e-mail: baiba.kataja@at.gov.lv