By: Dionísio Babo Soares
The recent decisions surrounding Law No. 7/2025, which abolishes lifetime pensions and various privileges granted to former holders of sovereign offices, offer a particularly clear illustration of the tensions between social justice, fiscal responsibility, and the protection of citizens’ legitimate expectations. Viewed from Timor-Leste, yet resonating across many young democracies, these tensions invite reflection that is at once legal and deeply political.
It is undeniable that the law reflects a widespread rejection of political privilege in a country marked by persistent inequalities and considerable pressure on public finances. Parliament emphasises that State resources should be directed towards fundamental rights—health, education, social protection, youth—rather than towards lifetime benefits for a small group, without current work in return and in a context of declining petroleum revenues. The message is clear: in the face of a looming “fiscal cliff”, it would be socially unjust to maintain special benefits for former office holders while the majority of the population is asked to make sacrifices.
At different moments, other democracies have faced similar dilemmas. In Portugal, successive revisions of the remuneration statutes for political office holders led to the abolition or significant restriction of special retirement schemes and lifetime allowances, accompanied by intense debates over legitimate expectations and equality vis-à-vis the general regime. In Spain, several autonomous communities reformed or abolished lifetime pensions for former regional deputies and reduced severance payments, invoking the financial crisis and the need to align representatives with the sacrifices imposed on those they represent. In the United Kingdom, following the 2009 parliamentary expenses scandal, the pension and benefits regime for Members of Parliament was reviewed, with cuts, stricter rules, and phased transitions, precisely to reconcile ethical demands with the preservation of public trust in the political system. These examples show that cutting privileges may be politically necessary, but the manner and pace of change shape perceptions of justice and the strength of institutions.
The Court of Appeal largely follows the legislator’s reasoning in considering that the lifetime pensions and associated benefits at issue are merely statutory entitlements, not fundamental rights, and therefore subject to a lower level of constitutional protection. From a technical legal perspective, this distinction is significant: these are neither contributory pensions nor benefits directly anchored in the Constitution, but rather legislative policy choices that Parliament itself may revise. This is an important principle in a democratic State governed by the rule of law: the legislator must be able to correct past choices, especially when they prove financially burdensome and politically contentious.
However, the way in which the decision addresses the legitimate expectations of beneficiaries deserves closer scrutiny. For years, the State paid pensions and benefits to former holders of sovereign office stably and consistently. From a social standpoint, it is difficult to argue that such individuals were not led to organise their lives—career decisions, residences, family support—on the expectation that this regime would continue. The judgment stresses that the 2017 amendments had already signalled the revisability of these benefits, thereby weakening such expectations. However, this does not erase the fact that, in democratic systems, the duration and regularity of a legal regime are themselves factors that generate expectations worthy of protection.
Here, legal reasoning intersects with political judgment. Social justice is not exhausted by correcting privileges; it also encompasses how the State undertakes that correction. Cutting benefits overnight, without a robust transitional regime for those who depend on them, may be perceived as a form of “social retroactivity”, even if, formally, the measure is classified as merely retrospective. In human terms, the difference between “we will not ask you to return what you have received” and “from tomorrow you will no longer receive what you relied upon to age with dignity” is anything but abstract.
One of the most significant aspects of the decision lies in its distinction between former office holders and third parties with whom they work or contract. In assessing the provision that mandated the immediate termination, “without any compensation”, of contracts linked to these benefits—drivers, office staff, service providers—the Court held that such a solution violates the principles of equality and proportionality. The reasoning is both simple and compelling: it makes little sense for these workers, often in economically vulnerable positions, to be placed in a worse situation than any other citizen holding a contract with the State, merely because the subject of the contract is linked to political privileges. This is a moment where concern for social justice clearly emerges: the Court refuses to allow the burden of austerity to fall disproportionately on the most vulnerable parties to the contractual relationship.
This sensitivity, however, is less evident in the part of the decision that legitimises the immediate cessation of pensions and benefits for former office holders. By accepting that savings of a few million dollars justify an abrupt cut, the decision places considerable weight on the financial public interest—namely, the need to preserve the Petroleum Fund and safeguard the rights of future generations. This is undoubtedly a real and relevant public interest. Nonetheless, the balancing exercise might have been more nuanced, exploring intermediate solutions: maintaining the repeal for the future while introducing transitional mechanisms for current beneficiaries, such as gradual reductions, caps, or coordination with other sources of income.
At a broader level, this debate touches the very core of social justice in transitional societies. Timor-Leste is a young country whose institutional legitimacy is built on strong symbolic capital in sacrifice and public service. It is not politically neutral how those who, at critical moments, assumed responsibilities under often difficult conditions are treated. At the same time, it is untenable to perpetuate privilege schemes that, in light of current social and fiscal realities, have become misaligned. Between institutional gratitude and responsibility to future generations, a delicate balance must be struck.
The emerging jurisprudence sends a dual message. On the one hand, it tells the country that Timorese democracy is capable of revising the benefits granted by its own institutions, in the name of the public interest and equality in the distribution of resources. On the other hand, it reveals a certain rigidity in its understanding of legitimate expectations, which may weaken the perception that the State honours its “given word” when inviting citizens to serve in high office under specific legal conditions. For a young democracy, this perception is as important as fiscal discipline.
Perhaps the most useful political lesson is this: reforms that affect rights, income, and personal dignity must be designed with time, transparency, and a genuine sense of transition. Social justice is not only about deciding who is right in the abstract; it is also about the art of changing course without leaving people behind. Between the necessity to cut and the duty to protect, it is within this narrow space that the maturity of a State governed by the rule of law is ultimately measured.
This article reflects the author’s personal views and does not bind the institutions he represents.
