The amount of the payment for social services and the amount of the mandatory balance after payment of this payment are not subject to tax execution from the debtor’s pension, regardless of whether they are paid in cash or to a bank account

On November 27, 2025, the Supreme Administrative Court of the Slovak Republic, by judgment Case No. 2Sfk/1/2025, dismissed the cassation complaint of the Financial Directorate of the Slovak Republic (hereinafter referred to as the “Financial Directorate”) against the judgment of the Administrative Court in Košice (hereinafter referred to as the “administrative court”), by which it annulled its decision in the matter of tax enforcement by ordering the recovery of a claim from the bank account from which the pensioner paid for his stay in a social services facility. In the opinion of the Court of Cassation, the protection of social benefits should be linked to their origin and purpose, and it is necessary to interpret Section 106 paragraph 3 of the Tax Code in this spirit. If it is clear that the funds come from a pension paid by a social insurance company and are subsequently used to pay for the social services provided, their enforcement is not permissible regardless of the method of payment and holding of these funds.

In 2015, the Košice Customs Office levied interest on a late payment from a disabled pensioner, which he did not pay. In 2021, a tax enforcement notice was issued to recover the tax arrears, as new funds were found in the disability pension account. The Financial Directorate rejected the disabled pensioner’s appeal against the tax enforcement notice. The disabled pensioner defended himself in the proceedings by saying that his only income is the disability pension transferred to a bank account from which he pays the payment to the social services facility, to which his representative also contributes. During the COVID-19 pandemic (November 2020 to May 2021), the representative of the disabled pensioner had to pay the payment for social services from her account to the social services provider. The funds that remained in the disabled pensioner’s account were therefore to represent a refund of this payment to his representative. The administrative court annulled the defendant’s decision and remanded the case for further proceedings.

In the case in question, the Court of Cassation addressed the question of whether tax enforcement was permissible, also regarding the nature of the funds for the purposes of their enforcement. It acknowledged that, approaching the matter formally and based only on the linguistic interpretation of the legal regulation, the legislator protects the amount of the payment for social services and the amount of the mandatory balance after payment of this payment from the pension only in the case of tax enforcement by deductions from the pension. However, not in the case of tax enforcement by ordering a claim from the account. The amount of the pension corresponding to the payments for social services and mandatory balances is ultimately not subject to tax enforcement if it is paid to a place other than the account with the payment service provider.

However, in the opinion of the Court of Cassation, the interpretation of legal provisions must also reflect the mutual connections between the various methods of interpretation, also considering the purpose of the law and its provisions. The Court of Cassation stated that the protection of social benefits should be linked to their origin and purpose. If it is clear that the funds come from a pension paid by a social insurance company and are subsequently used to pay for the social services provided, their execution is not permissible. This clear purpose of Section 106, paragraph 3 of the Tax Code cannot be changed by the form of possession of the funds in question. No one can be discriminated against for choosing the method of payment of a pension benefit. Especially if the Social Insurance Act favors the transfer of pension benefits to an account rather than their payment in cash.

According to the Court of Cassation, the purpose of Section 106, paragraph 3 of the Tax Code is to respect the social function of pensions. The aim of the exception provided for therein is thus to protect the taxpayer from tax enforcement in the case of benefits intended to ensure a minimum standard of living. Excluding the taxpayer from this protection does not respect constitutional values ​​(the right to social security and human dignity), because the pension benefit would become only an amount without a social nature and the related rights to protection that are due to it. Even in the event of forced enforcement, the financial administration is obliged to eliminate interventions that can threaten the basic existence of the taxpayer and his human dignity. Otherwise, it would interfere not only with the essence of the right to adequate material security, but also with the preservation of his dignity.

The Court of Cassation is aware that the purpose of the Tax Code is also the fair collection of taxes. It recalled that the essence of tax administration is not only to fairly enforce tax obligations, but the tax collector’s duty is to consider the links to other legal norms and, when collecting taxes, must appropriately take into account the rights of taxpayers. The disabled pensioner and his representative in the case in question sufficiently explained the situation that had arisen, they also submitted an overview of the transactions carried out by the disabled pensioner’s representative. It was therefore the task of the Financial Administration to verify these claims – by checking whether the funds in the bank account could consist only of the pension. Moreover, the Košice Customs Office itself knew about the existence of the pension, its amount and payment, since the social insurance company delivered a notification to it about the impossibility of making deductions due to the low amount of the pension.

When the Financial Administration did not proceed in the manner explained above, it proceeded from insufficiently established facts and did not use all the powers it had to decide in accordance with the law, respecting the legally protected interests of the tax subject. Therefore, the Court of Cassation confirmed the contested judgment of the Administrative Court in the ruling as substantively correct.

This decision was adopted by the Panel of the Supreme Administrative Court unanimously, no appeal is admissible against it.

This decision was made by Panel No. 2 of the Supreme Administrative Court, composed of: President of the Panel Prof. JUDr. Juraj Vačok, PhD. and the Judges JUDr. Elena Berthotyová PhD. and JUDr. Marián Trenčan.