AS TO THE ADMISSIBILITY OF

                 Applications Nos. 27004/95 and 27011/95

                 by Josef SZRABJER and Walther Kenneth CLARKE

                 against the United Kingdom

     The European Commission of Human Rights (First Chamber) sitting

in private on 23 October 1997, the following members being present:

           Mrs   J. LIDDY, President

           MM    M.P. PELLONPÄÄ

                 E. BUSUTTIL

                 A. WEITZEL

                 C.L. ROZAKIS

                 L. LOUCAIDES

                 B. MARXER

                 B. CONFORTI

                 N. BRATZA

                 I. BÉKÉS

                 G. RESS

                 A. PERENIC

                 C. BÎRSAN

                 K. HERNDL

                 M. VILA AMIGÓ

           Mrs   M. HION

           Mr    R. NICOLINI

           Mrs   M.F. BUQUICCHIO, Secretary to the Chamber

     Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

     Having regard to the applications introduced on 18 October 1994

and 23 September 1994 respectively by Josef SZRABJER and Walther

Kenneth CLARKE against the United Kingdom and both registered on

7 April 1995 under files Nos. 27004/95 and 27011/95;

     Having regard to:

-    the reports provided for in Rule 47 of the Rules of Procedure of

     the Commission;

-    the Commission's decision of 4 September 1996 that the

     applications be joined;

-    the observations submitted by the respondent Government on

     17 January 1997 and the observations in reply submitted by the

     applicants on 17 April 1997;

     Having deliberated;

     Decides as follows:

THE FACTS

     The applicant in Application No. 27004/95 ("Mr Szrabjer") is a

British citizen, born in 1922. He lives in Heclefield, in Hampshire.

The applicant in Application No. 27011/95 ("Mr Clarke") is a British

citizen, born in 1926. He is detained at Albany prison, Isle of Wight.

Both applicants are represented by Mr S. Creighton, of the Prisoners'

Advice Service, London, with Mr B. Emmerson, barrister and Mr M. Smyth

of Clifford Chance, solicitors.

A.   The particular facts of the cases

     Mr Szrabjer paid contributions throughout his working life to a

state pension. When he reached pensionable age, on 11 February 1987,

he was entitled to draw a basic state pension and an additional pension

under the State Earnings Related Pension Scheme (SERPS). In March 1993

Mr Szrabjer was detained on a criminal charge, for which he was later

sentenced to three years in prison. Before his imprisonment,

Mr Szrabjer received a pension of approximately £128, made up of

approximately £58 basic pension, approximately £35 additional pension,

and approximately £35 as a payment for his wife as a dependant (the

precise figures are not agreed).

     Throughout the period of his imprisonment, from March 1993 until

23 September 1994, Mr Szrabjer did not receive any pension payment,

although his wife continued to receive the dependant's benefit.

     Mr Clarke reached pensionable age on 26 July 1991. He, too, as

a result of contributions made, became entitled to draw both the basic

pension and an earnings-related Category A pension. He continued to

draw his pension until 1 April 1993, when he was detained on a criminal

charge for which he was later sentenced to an eight-year term in

prison. The last pension payment he received was of £78.99, made up as

to £56.99 of the basic element, and as to £22 of the additional

pension.

     Mr Clarke applied for his pension whilst in prison, but was told

on 12 January 1994 that he was disqualified because he was undergoing

imprisonment or detention in legal custody.

B.   The relevant domestic law

     The basic state retirement pension was introduced in 1948 by the

National Insurance Act 1946, it is not means tested and not dependent

on contributions. It continues to be paid to all pensioners upon

satisfaction of the basic eligibility criteria.

     In the 1970's it was considered that there was too high a

dependency by pensioners on means tested supplementary benefits, due

to the severe financial hardship they faced on ceasing working life.

A contributory pension scheme was thus proposed by a White Paper in

1974 and introduced by the Social Security Pensions Act 1975 ("the 1975

Act"). The 1975 Act introduced an earnings related element, to

complement the flat rate basic pension. This earnings related scheme

is know as SERPS ("state earnings-related pension scheme"). The scheme

was specifically designed to help the lower paid, widows and those

suffering chronic ill-health. In addition to the flat rate basic

pension the SERPS additional earnings related element ("the earnings

related element") is payable to individuals who have actually paid

contributions on earnings. A pension which consists of both the flat

rate basic pension and an earnings related element is referred to as

a Category A pension.

     The framework for social security entitlements in England is

currently contained in the Social Security Contributions and Benefits

Act 1992 ("the 1992 Act"). Section 44 (1) of the 1992 Act lays down the

conditions under which entitlement to a Category A retirement pension

arises.

     "A person shall be entitled to a Category A retirement pension

     if

           (a)   he is of pensionable age; and

           (b)   he satisfies the contribution conditions for a

           Category A retirement pension specified in [this Act]

     Section 122(1) of the 1992 Act defines "pensionable age" as

sixty-five, in the case of a man.

     The conditions that must be satisfied to entitle a person to a

Category A pension are laid down in Schedule 3, Part I, paragraph 5 of

the 1992 Act. The conditions state that the individual must, for a

requisite number of years of his working life, have paid or been

credited with contributions. The requisite number of years during which

contributions must have been made is calculated according to the length

of the individual's working life. However even if contributions have

been made for only half the requisite number of years (or at least

20 years), and in each of the other years the contributor concerned was

precluded from regular employment by responsibilities at home as

defined by the regulations (Social Security Contributions and Benefits

Act 1992 Schedule 3 para. 5 (7)), the entitlement to an earnings

related element remains.

     Where an individual earns more than a defined minimum amount,

weekly payments must be made, currently amounting to 2% of earnings up

to a lower limit and 10% of earnings above this limit, up to a ceiling

above which no further contributions are payable. The employer also has

to make contributions in respect of his employee, the amount differing

depending on the employee's earnings. Low earners, who have no

compulsory contribution may chose to make voluntary contributions in

order to benefit from the scheme.

     The amount of the earnings related element the individual will

receive at pensionable age is then based on the amount of the

individual's former earnings and the contributions made, with account

being taken of inflation.

     The State pension, both the flat rate and the earnings related

element, are financed out of the National Insurance Fund. The income

received by this fund in any given year, from contributions made by

earners and employers, is used to finance the pensions paid out in that

same year. Unlike most private schemes, the National Insurance Fund is

not a fund consisting of contributions built up over the years, which

has sufficient resources from which payments to a person when they

retire can be made. In addition to the revenue from employers and

employees, the National Insurance Fund also receives revenue from

general taxation. The Social Security Act 1993 recently provided for

a special Exchequer Grant to meet the cost of up to 17% of the

expenditure of the National Insurance Fund, in order that the fund

could meet its expenditure commitments.

     Separate from the existence of SERPS are occupational pension

schemes which provide their members with additional income in

retirement, generally related to earnings. Occupational schemes may be

geared to high earners or the needs of particular industries or

occupations, and have differing terms and conditions to SERPS. For

example, they may provide for retirement at an earlier age than does

SERPS. It is open to employers who have occupational schemes to

contract their members out of SERPS, on the condition they guarantee

to provide "Guaranteed Minimum Pensions" ("GMP"), roughly equivalent

to those that their employees would receive under SERPS. Employees

continue to have a residual right to earnings related pension if the

GMP they receive is less than the SERPS entitlement. In return for

contracting-out, employers and employees pay National Insurance

contributions at a reduced rate to reflect the saving to the State.

Some occupational pension schemes are not contracted out of SERPS and

in this case the employees benefit from SERPS plus their basic flat

rate state pension and also receive earnings related benefits from

their occupational pension scheme.

     There are various provisions in the social security legislation

which operate to disqualify individuals from receiving social security

benefits. The relevant provisions are contained in Section 113(1) of

the Social Security Contributions and Benefits Acts 1992 and in

Regulation 2 of the Social Security (General Benefit) Regulations 1982.

The effect of these provisions is, inter alia, that persons undergoing

imprisonment or detention in legal custody are disqualified from

receiving a state pension. They are not entitled to receive either the

basic flat rate state pension or the earnings related element of the

pension.

     In relation to occupational pension schemes which have opted out

of SERPS, disqualification provisions are contained in Section 21(2)

of the Pension Schemes Act 1993 and Regulation 35 of the Occupational

Pension Schemes (Contracting Out) Regulations 1984. Under these

regulations an employer may cease paying the GMP to an individual

undergoing a period of imprisonment or detention in legal custody.

However if the pension is so suspended the equivalent sum of the GMP

may be paid to one or more of the pensioner's dependants as the

trustees of the scheme may in their discretion determine.

COMPLAINTS

     The applicants complain that their disqualification from

continuing to receive a SERPS earnings related element of their pension

whilst in prison, is a violation of the Convention in several respects.

     First, the applicants submit that their disqualification violates

Article 1 of Protocol No. 1 to the Convention. They claim that, having

qualified for an earnings related element by their contributions over

the years - contributions which were calculated by reference to their

income - they have a "possession" within the meaning of Article 1 of

Protocol No. 1. They submit that there is no reason to deprive them of

that vested property right whilst they are in prison. In this

connection they contend that the disqualification has no legitimate

aim: the aim cannot be to avoid "double expenditure" as a SERPS

earnings related element (unlike the basic flat rate pension) is not

a social welfare benefit but an accrued property entitlement which

depends on a pensioner's past financial contributions rather that his

or her present needs. Moreover, the aim cannot be to punish, as it

would then penalise only those prisoners who have made steady

contributions to the state pension scheme, rather than all those

convicted of an offence. It would also impose a second penalty on those

who have already been sentenced for an offence.

     The applicants regard disqualification from their entitlement to

a pension under Section 113 (1) as disproportionate to any aim that

might be legitimate. They claim they are deprived of a source of income

to which they have contributed all their working lives, for the sake

of an aim which is disproportionate and/or unfairly punitive.

     Secondly, the applicants allege a violation of Article 14 of the

Convention, taken together with Article 1 of Protocol No. 1. They see

no justification for the difference in treatment of themselves and

those who have an occupational pension which has contracted out of the

SERPS scheme and guaranteed a GMP. They consider that they have been

discriminated against on grounds of their status as state pensioners.

     Finally, the applicants see discrimination on the ground of their

status as prisoners.

PROCEEDINGS BEFORE THE COMMISSION

     The applications were introduced on 18 October and 23 September

1994 and were both registered on 7 April 1995.

     On 4 September 1996 the Commission decided to join the

applications and to communicate them to the respondent Government.

     The Government's written observations were submitted on

17 January 1997, after an extension of the time-limit fixed for that

purpose. The applicants replied on 17 April 1997, also after an

extension of the time-limit.

     On 4 March 1997 the Commission granted the applicants legal aid.

THE LAW

1.   The applicants complain that the suspension of payment of the

earnings related element of their state pensions during their

imprisonment, amounted to a deprivation of property in breach of

Article 1 of Protocol No. 1 (P1-1) of the Convention.

     Article 1 of Protocol No. 1 (P1-1) of the Convention provides 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."

     The Government submit that the entitlement to the earnings

related element of the pension does not constitute a "possession" for

the purposes of Article 1 of Protocol No. 1 (P1-1) of the Convention.

In particular they state that the earnings related element is part only

of the state pension which is financed not from a fund in which the

applicants have an identifiable share, but from contributions and

taxation transfers made during the same year in which benefits are paid

out. Further the National Insurance Fund, from which pensions are paid,

is funded largely from contributions from employers and general

taxation, not purely from contributions made by the applicants and

fellow employees. The Government also claim that under domestic law a

state pension does not constitute a possession and a state pension

entitlement cannot be the subject of any charge or be assigned (Social

Security Administration Act 1992, Section 187).

     The Government go on to submit that even assuming the entitlement

to the earnings related element of the pension constitutes a possession

under Article 1 of Protocol No. 1 (P1-1), the suspension of payment

amounts to a control of property that strikes a fair balance between

the general interest of the community and the requirements of the

protection of the individual's fundamental rights. The Government argue

that the deprivation of a pension forms part of the punishment during

imprisonment for a criminal offence and that as long as the prisoner

is maintained at public expense there is no need for him to receive a

state pension of any kind.

      The applicants argue that the entitlement to the earnings

related element of the pension is a possession within the meaning of

Article 1 of Protocol No. 1 (P1-1), as the level of this part of the

state pension is calculated by reference to the payments actually made

by the applicants during their working life. The applicants further

state that the accumulation of the SERPS earnings related element could

at any time be exchanged for a GMP under an occupational pension scheme

and therefore has a value which is fixed at any given moment in time.

The applicants further argue that a contributor to a private scheme has

a property right in relation to the pension fund he has paid into and

that SERPS was set up on the principles of a private scheme, with the

amount paid out to pensioners being fixed according to their payments

in and not susceptible to fluctuations due to Treasury constraints;

thus contributors under SERPS should likewise have a property right

regarding the earnings related element of their pension.

     The applicants consider that the suspension of the earnings

related element of the pension during imprisonment constitutes a

deprivation of property, and that such deprivation cannot be justified

as being in the public interest, has no legitimate aim and unjustly

penalises those individuals who have made steady contributions during

their working life.

     The Commission recalls that it has considered the status of

contributory pensions in relation to Article 1 of Protocol 1 (P1-1) in

the past. In X v. Netherlands (No. 4130/69, Dec. 20.7.71, Yearbook 14,

pp. 224, 240) the Commission held that "the making of compulsory

contribution to a pension fund may, in certain circumstances, create

a property right in a portion of such fund and that such right might

be affected by the manner in which the fund is distributed". In Müller

v. Austria, No. 5849/72 (Comm. Report 1.10.75, D.R. 3, p. 31), the

Commission held that, "it is conceivable that the right to be a

beneficiary of an old age insurance system to which one has paid

contributions is a right of ownership guaranteed by Article 1 of

Protocol No. 1 (P1-1)".

     The Commission notes that SERPS was set up out of a sense of

social solidarity due to the financial hardship suffered by so many

pensioners. It combines the principle of social solidarity with an

earnings related pension scheme. Whilst there is a relationship between

the amount paid into the scheme by and on behalf of an individual and

the amount that individual will receive as a pensioner, the equation

is complicated by the fact the National Insurance Fund (from which the

pensions are paid out) receives Government grants and taxation monies

and that solidarity policies mean that individuals who have not in fact

contributed over the requisite period due to responsibilities in the

home, can still benefit from the scheme. Thus there are elements of

SERPS that resemble a state benefit as opposed to a private pension

plan. However the Commission recalls the case of Gaygusuz v. Austria

(Eur. Court HR, judgment of 16 September 1996, Reports 1996-IV, No. 14,

paras. 33-42), which considered the right to emergency assistance for

an unemployed person. In that case the Court noted that emergency

assistance was linked to and dependent upon a payment of contributions

and held that in these circumstances the right to emergency assistance

was a "pecuniary right" under Article 1 of Protocol No. 1 (P1-1). The

Commission thus considers that, whilst SERPS contains a social

solidarity element as opposed to being a purely earnings related

pension, the right to such a pension is dependent on some contribution

and therefore does constitute a pecuniary right for the purposes of

Article 1 of Protocol No. 1 (P1-1).

     The effect of domestic legislation was to deprive the applicants

of payments under their state pension, including the earnings related

element, during their imprisonment. The question then arises as to

whether such deprivation can be said to be in the public interest. The

Commission notes that the state pension is merely suspended during

imprisonment; upon release the pension becomes payable again at the

appropriate updated level. The Commission further notes that the

dependant wife of the first applicant continued to receive "dependant's

benefit" while her husband was in prison. The Commission also notes

that whilst SERPS was payable only to those who had made sufficient

contributions, the scheme received Government grants and had social

solidarity elements.

     The Commission notes that it is clearly set out within the terms

of SERPS, that in the case of imprisonment pension payments will be

suspended. The pension is not, however, stopped permanently and the

money the individual has paid into SERPS remains undiminished during

the period of imprisonment. Further, the pension payments suspended

during imprisonment recommence on release at the appropriate updated

level. The Commission considers in the circumstances it can be

considered as being in the public interest that during a period of

imprisonment, when prisoners are kept at the expense of the State, a

state pension, including an earnings related element of the pension,

is suspended. To do otherwise would leave the prisoner in an

advantageous situation of benefiting from accumulating a lump sum by

receiving a regular pension, without having any outgoing living

expenses.

     It follows that this part of the application is manifestly ill-

founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

2.   The applicants complains under Article 14 (Art. 14) of the

Convention taken together with Article 1 of Protocol No. 1 (P1-1). They

refer to the difference of treatment under occupational pension schemes

with a GMP and SERPS. They also consider that they have been

discriminated on the grounds of their status as prisoners.

     "The enjoyment of the rights and freedoms set forth in this

     Convention shall be secured without discrimination on any ground

     such as sex, race, colour, language, religion, political or other

     opinion, national or social origin, association with a national

     minority, property, birth or other status."

     The Government state that pensioners receiving an earnings

related element of the state pension are not in an analogous position

to those who are members of a contracted out occupational pension

scheme and thus there can be no issue under Article 14 (Art. 14) of the

Convention. They further argue that even assuming the two schemes are

considered to be analogous, the disqualification in relation to the

state pension is justified on the grounds both of punishment and the

fact the prisoner is being maintained at public expense.

     The applicants submit that as state pensioners, as opposed to

pensioners under an occupational pension scheme with a GMP, they were

discriminated against. The applicants had their pension, including the

earnings related element, suspended during their time in custody.

However, pensioners with an occupational pension scheme, although their

basic rate state pension was suspended, could have their occupational

earnings related pension transferred to a dependant during the period

of imprisonment. The applicants further argue that the suspension of

the earnings related element of their pension during imprisonment

amounted to discrimination on the basis of their status as prisoners.

     The Commission recalls that Article 14 (Art. 14) affords

protection against discrimination, that is treating differently,

without an objective and reasonable justification, persons in

"relevantly" similar situations (Eur. Court HR, Fredin v. Sweden

judgment of 18 February 1991, Series A no. 192, p. 19, para. 60).  In

the present case, a comparison of prisoners with non-prisoners is a

comparison of two different factual situations and as such discloses

no discrimination under Article 14 (Art. 14) of the Convention.

     With regard to the complaint that the applicants were treated

less favourably than prisoners who had paid into an occupational

pensions scheme, the Commission makes the following observations.

Occupational pensions were subject to legislative control in that

employers, whilst able to opt out of SERPS and have their own earnings

related pension scheme for their employees, had to provide at least as

good a return to pensioners as under SERPS, that is a GMP. Under State

regulations governing occupational pension schemes it was permissible

to suspend the pension on imprisonment, but also permissible to award

such pension to a dependant of the prisoner (a possibility not

available under SERPS). The fact that such schemes in certain

circumstances may have offered more advantageous conditions with regard

to suspension and returns to pensioners, cannot constitute

discrimination by the Government against the applicants. The payments

in to occupational schemes by employees and employers would have varied

between different occupational schemes (taking SERPS as a minimum) and

thus there can be no direct comparison with either the levels or the

terms of pension returns under SERPS and occupational pension schemes.

The Commission thus considers this complaint also to be a comparison

of two different factual situations which as such discloses no

discrimination under Article 14 (Art. 14) of the Convention.

     It follows that this part of the application is manifestly ill-

founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

     For these reasons, the Commission, unanimously,

     DECLARES THE APPLICATIONS INADMISSIBLE.

     M.F. BUQUICCHIO                              J. LIDDY

        Secretary                                 President

   to the First Chamber                      of the First Chamber