A complainant contacted the Ombudsman because of the calculation of rights from public funds and the lengthy decision-making by the Ministry of Labour, Family, Social Affairs and Equal Opportunities on her application for debt cancellation. The Ombudsman concluded that the MDDSZ had violated the principle of good governance due to the lengthy decision-making process regarding the complainant's application. The Ombudsman also warned the MDDSZ that the settlement of rights from public funds does not mean that the MDDSZ is not obliged to decide on the role of the complainant for debt cancellation, as well as the terminological inconsistency in the definition of a party under the General Administrative Procedure Act (ZUP).

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The complainant contacted the Ombudsman of the Republic of Slovenia (Ombudsman) due to the calculation of the right to child allowance, which was granted to her after the birth of her child in 2022, and the unjustifiably received cash social assistance from 2018. She filed for social assistance with the Ministry of Labour, Family, Social Affairs and Equal Opportunities (MDDSZ) in July 2018. However, due to the long-term decision-making of the Ministry of Labour, Family, Social Affairs and Equal Opportunities (MDDSZ), she thought that the matter had been favourably resolved and concluded. She explained that she is currently unemployed, she urgently needs money for the child, and she cannot repay the incorrectly received financial aid, as she has already spent it.

The Ombudsman asked the MDDSZ about the reasons for the lengthy decision-making process. This explained that there were backlogs in debt cancellation due to staff shortages and urgent tasks that had occurred during the Covid-19 epidemic. It added that her partner also has a debt, but he did not submit an application for cancellation, which means that his debt will also be calculated. Debt cancellation after settling the debt with a new right from public funds should not be possible.

Since the Ombudsman considered the answer of the MDDSZ insufficient, he enquired about the legal basis for offsetting the complainant's right to child allowance with the debts of her partner. He was also interested in why cancellation of the debt after settlement of the debt with a new right from public funds should not be possible, since the judgment of the Higher Labour and Social Court (app. no. Psp 81/2016 from 1 June 2016, app. no. Law No. Psp 82/2016 of 1 June 2016 and Order No. Psp 43/2017 of 1 June 2017) according to the Ombudsman, stipulate the exact opposite, namely that a decision on the merits of the debt cancellation procedure is only made if the customer cancels the application to initiate the procedure.

The MDDSZ cited the Paragraph 6 of Article 44 of the ZUPJS in conjunction with point 4 of Paragraph 1 of Article 3 of the ZUPJS as the legal basis for offsetting the complainant's right to child benefit with the debts of her partner. The jurisprudence cited by the Ombudsman in his query to the MDDSZ, however, was described by the MDDSZ as outdated because Article 44 of the ZUPJS was changed in 2018. Thus, according to the new debt cancellations, they are no longer carried out under the Tax Procedure Act, but under the Public Finance Act.

After a long deliberation, the Ombudsman interpreted point 4 of Paragraph 1 of Article 3 of the ZUPJS as it is written (that is, a person whose material position is taken into account when asserting rights from public funds is considered a party to the proceedings). With such reasoning of the above-mentioned articles, it is also permissible to set off the debt of the complainant's partner with her right to child allowance. Her partner is both a party to the procedure for obtaining child support (because his material situation is also taken into account when deciding on the complainant's right to child support and its amount) as well as the procedure in which his debt was incurred. In this case, the same consequences occur as in the case of the complainant's debt according to Paragraph 6 of Article 44 of the ZUPJS. In the case of a different interpretation, inequality would also arise between the two partners if only the debt of the investor could be offset, even though rights from public funds are intended for the entire family; the law could also be circumvented (if the application for the right is submitted by a partner who does not have debt), which was rightly pointed out by the MDDSZ.

However, the Ombudsman believes that point 4 of Paragraph 1 of Article 3 of the ZUPJS is not clear or causes unnecessary terminological confusion, as it expands the concept of a party as defined in the ZUP in the Paragraph 1 of Article 42 (a party in administrative proceedings can be any natural person and legal person under private or public law at whose request the procedure is initiated or against whom the procedure is ongoing) to persons who have not initiated the procedure or against whom the procedure is ongoing, and whose material position is only considered as part of the actual situation (relevant facts) in a specific case. Taking into account that the addressees of the ZUPJS are mainly natural persons who are not skilled in legal texts, the Ombudsman judged that the mentioned article is in conflict with the principle of the rule of law (Article 2 of the Constitution of the Republic of Slovenia), which requires that regulations be clear and definite, so that the content and purpose of the norm can be established beyond doubt.[1] The Ombudsman therefore called on the MDDSZ for a clearer text of the mentioned article, which will be consistent with the existing legal terminology.

The Ombudsman did not follow the MDDSZ's opinion that debt cancellation is not possible if the debt has been calculated. According to the Ombudsman, the position of the MDDSZ that the stated practice is irrelevant for the specific case is not correct, since the amendments to the ZUPJS in 2018 only changed the substantive criteria for debt cancellation, but not the debt cancellation procedure itself.

In relation to the specific case of the complainant, the Ombudsman expressed his expectation that the MDDSZ will decide on her application for debt cancellation as soon as possible. Taking into account that the procedure in the case of the complainant has been going on for more than four years, the Ombudsman found a violation of Article 222 of the ZUP, which stipulates that the administrative body must make a decision within two months at the latest if it carries out a special ascertainment procedure. The MDDSZ had also violated the principle of good management by taking a long time to make a decision, since the ZUP sets deadlines with the aim of ensuring the effective realisation of the rights and obligations decided by the administration. Making a decision within the instruction deadlines set by law does not only mean the legal work of the administrative body, but also respect for the right to equal protection of rights from Article 22 of the Constitution of the Republic of Slovenia (URS), and a reasonably long duration of the procedure is also of key importance for exercising the right to an (effective) legal remedy from Article 25 of the URS. [2]

The reasons given by the MDDSZ as the reason for the long decision-making process in the case of the complainant (i.e. the Covid-19 epidemic and the lack of staff) as well as other applications for debt cancellation (the average time for deciding on an application for debt cancellation is currently 6–12 months), the Ombudsman did not take into account as excusable reasons for non-observance of instructional deadlines. Due to the lack of staff, the procedures can only take a while longer, but they can no longer be referred to when the time required for organisational and/or personnel adaptation of the body has passed. The Covid-19 epidemic began when the MDDSZ was already more than a year and a half late with its decision on the complainant's request.

In its reply dated 15.03.2023, the MDDSZ explained to us that an amendment to the legislation is being prepared, which will change the area of ​​debt cancellation. At the same time, consideration will also be given to how to address the Ombudsman's recommendation for the terminological harmonisation of the definition of a client under the two mentioned laws. The MDDSZ stated that they are trying to reduce the backlog by reorganising or adjusting personnel when deciding on requests for debt cancellation, but did not specify concrete measures despite the Ombudsman's call to do so.

The Ombudsman considered the complaint justified. He will continue to monitor the issue of long-term decision-making on debt cancellation. 9.5-25/2022

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[1] See: https://e-kurs.si/komentar/zapoved-pravne-varnosti-in-jasnost-dolocnost-pravnih-norm/.

[2] See for example: decision of the Constitutional Court of the RS, no. Up-304/01, of 20.5.2004 and Up-10/03-16, of 10.7.2003.