methods take into account the needs of households depending on their size and
composition. There is a wide range of such methods of assessment available
(see Atkinson A. B., Rainwater L., Smeeding T. M., Income Distribution in OECD
Countries, OECD Social Policy Studies, No. 18, 1995, Paris).
Three of these methods are the most widespread: (1) OECD equivalence scale, (2)
OECD-modified scale, (3) square root scale, which is used since 2008
(see http://www.oecd.org/dataoecd/61/52/35411111.pdf, accessed on 3 December
2009). Eurostat in its practice has adopted the OECD-modified scale method
(see http://ec.europa.eu/employment_social/spsi/docs/social_protection/SPC%20Study
%20minimum%20income%20final.pdf, accessed on 3 December 2009). On the basis
of calculations made according to these methods, the optimum level of income is
determined for persons, so that they would be able to satisfy their basic needs. The
choice of a particular equivalence scale to be used depends on technical assumptions
about economies of scale in consumption as well as on value judgments about the
priority assigned to the needs of different individuals, such as the elderly. These
judgments will affect the results. In selecting a particular equivalence scale, it is
important to be aware of its potential effect on the level of inequality and poverty, on
the size of the poor population and its composition (see What are Equivalence Scales?
OECD
Project
on
Income
Distribution
and
Poverty,
via
www.oecd.org/els/social/inequality, accessed on 25 November 2009).
Since the results may differ depending on the method chosen, a substantiated choice of
the method which is most suitable to the situation in Latvia is a matter of political
choice of the legislator.
32. The Applicants hold that the impugned provisions do not comply with the principle
of protection of legitimate expectations, for the legislator has not envisaged a lenient
transition to the new legal order.
The principle of protection of legitimate expectations is indissolubly linked with the
principle of judicial state. The Constitutional Court has pointed out that, in accordance
with the principle of protection of legitimate expectations, government institutions are
obliged to act consistently with respect to the normative acts issued and to respect the
legitimate expectations that persons could have developed under a specific legal
provision. Individual persons, in turn, in accordance with this principle, can count on
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