WARSAW (Reuters) - The Polish government’s plan to make the wealthiest taxpayers contribute more to fund pensions and disability payments is unconstitutional, the Constitutional Tribunal ruled on Wednesday, according to state news agency PAP.
The legislation is part of a broader effort by the ruling eurosceptic Law and Justice party to bolster state coffers and fund its expensive social spending policies.
PAP said the labor ministry had expected higher pension and disability contributions to bring in an additional 5.4 billion zloty ($1.4 billion) this year alone.
That would have helped the government reduce its budget deficit, which it currently expects to come to 41.5 billion zloty in 2018.
PiS, a grouping with a left-leaning economic policy and a nationalist agenda, had wanted to eliminate a cap on contributions which had been introduced by previous governments to reflect the limits on state pensions.
Poland’s creaking pension system, a legacy of communist-era state control of the economy, is a major drain on public finances because of the aging population.
Reporting by Joanna Plucinska; Editing by Justyna Pawlak and Hugh Lawson