European court dismisses Iceland pension case brought by Grey Army

The European Court of Human Rights has dismissed a case brought by three Icelanders against the Icelandic state, commonly known as the Grey Army case, mbl.is reports.

The case examined whether reductions in Iceland’s social security system complied with the Constitution, including its property rights provisions.

Changes introduced in 2016 and 2017 merged several categories of old-age pensions into one category. Payments from the social security system were reduced by 45 percent for people receiving more than 25,000 Icelandic krónur a month from employment-based pension funds.

The claim argued that reducing public pension payments in proportion to rights that pensioners had earned through work and contributions to pension funds violated their constitutionally protected property rights. The Grey Army said the reduction amounted to as much as 56.9 percent of pension fund payments.

State prevailed in Supreme Court

Iceland’s Supreme Court ultimately cleared the state of liability in 2022, after which the Grey Army took the case to the European Court of Human Rights.

The court announced early last year that it would examine the case on its merits. It limited its review to whether the reduction rules had discriminated against pensioners depending on whether their pension rights were held in private or mutual pension funds, and whether the tax-free income threshold for people who still had employment income was substantially higher than for those receiving payments only from pension funds.

The court dismissed the case because the applicants had not shown that they had suffered discrimination in breach of Article 14 of the European Convention on Human Rights, which prohibits discrimination.