Opinion of the European Central Bank of 7 March 2023 on the limitation of cash payments for public social insurance contributions (CON/2023/7)
Date: 2023-03-07
Institutions: European Central Bank
Subjects: money

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 7 March 2023 

on the limitation of cash payments for public social insurance contributions  

(CON/2023/7) 

Introduction and legal basis 

On 24 March 2022 the National Council of the Slovak Republic adopted Law No 125/2022 Coll. which 

amends  and  supplements  Law  No  461/2003  Coll.  on  social  insurance1  (hereinafter  the  ‘Law’).  The 

European Central Bank (ECB) has not been consulted by the Slovak authorities on the law. 

The ECB has decided to deliver an own initiative opinion on the Law. The ECB’s competence to deliver 

an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union 

and the second  indent of  Article 2(1) of Council Decision 98/415/EC2, as the Law relates to means of 

payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European 

Central Bank, the Governing Council has adopted this opinion. 

1. 

Purpose of the Law 

1.1 

The Law, among others, amends Law No 461/2003 Coll. on social insurance by abolishing the 

option to pay social security contributions to the Sociálna poisťovňa (Social Insurance Agency) in 

cash, and by allowing such payments to be made only by means of other (priced) services, i.e. 

by bank transfer or postal money order 3. The explanatory memorandum accompanying the Law 

when  it was submitted to the National Council of the  Slovak Republic explains this change as 

follows. Cashless payments is one of the tools to combat the shadow economy, i.e., the illegal 

movement  of  money  that  has  not  been  registered  in  the  State’s  records.  According  to  the 

explanatory memorandum, payments with banknotes within the legal payment system form part 

of the shadow economy and a proportion of the shadow economy can be cut by using cashless 

payment systems. The explanatory memorandum further explains that the disadvantages of cash 

payments include the risk of theft, the possibility of counting errors, the possible use of counterfeit 

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2   

3  

Zákon č. 125/2022 Z. z. z 24. marca 2022, ktorým sa mení a dopĺňa zákon č. 461/2003 Z. z. o sociálnom poistení 
v znení neskorších predpisov a ktorým sa menia a dopĺňajú niektoré zákony. 
Council  Decision  of  29  June  1998  on  the  consultation  of  the  European  Central  Bank  by  national  authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 
Article I, point 32, of the Law, which amends Section 142(6) of Law No 461/2003 Coll. on social insurance. The 
provisions on postal money orders are, in general, laid down by Law No 324/2011 Coll. on postal services and on 
amendments of certain laws (zákon č. 324/2011 Z.z. zo 14. septembra 2011 o poštových službách a o zmene a 
doplnení niektorých zákonov). A postal money order to account, which is the relevant means of payment in this 
case, provides for the possibility to pay without having a bank account up to an amount of EUR 15,000. 

 
 
 
 
 
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money,  the  additional  costs  for  providing  security,  such  as  safes  or  armed  protection,  the 

possibility of spreading diseases and the need for personal contact.  

1.2 

The ECB understands that the scope of the Law’s restriction on cash payments not only covers 

the payment of social insurance contributions, but also other payments to the Social Insurance 

Agency, such as penalties and sanctions. The ECB also understands that this change is already 

reflected  in  the  Social  Insurance  Agency’s  recent  practice,  as  it  no  longer  accepts  any  cash 

payments at its branches.  

2. 

General observations 

2.1 

Cash  plays  an  important  role  in  society.  Cash  is  generally  useful  as  a  payment  instrument 

because it is legal tender, widely accepted, fast and facilitates control over the payer’s spending. 

Moreover, it is the only payment instrument that allows citizens to settle a transaction in central 

bank money, which is also settled instantly, while ensuring privacy 4. In addition, the ability to pay 

in  cash  remains  particularly  important  for  certain  groups  in  society  that,  for  various  legitimate 

reasons, prefer to use cash rather than other payment instruments, or do not have access to the 

banking system and electronic means of payments. These groups include not only elderly people, 

but also some disabled citizens, immigrants, socially vulnerable citizens, minors and others with 

limited or no access to digital payment services 5. Against this backdrop, the ECB closely monitors 

any  national  law  developments  that  aim  to  limit  cash  payment  possibilities  for  natural  or  legal 

persons and thereby interfere with citizens' right to pay in cash. 

2.2 

Under the Treaty, the European System of Central Banks has the basic task of promoting the 

smooth  operation  of  payment  systems 6,  and  the  ECB  has  the  exclusive  right  to  authorise  the 

issue  of  euro  banknotes  within  the  Union 7.  The  euro  banknotes  issued  by  the  ECB  and  the 

national central banks of the euro area are the only banknotes with legal tender status within the 

euro area8. 

2.3 

The concept of ‘legal tender’ of a means of payment denominated in a currency unit has been 

considered by the Court of Justice of the European Union. In particular, the Court has clarified 

that the concept of ‘legal tender’ signifies that this specific means of payment cannot generally 

be refused in settlement of a debt, denominated in the same currency unit at its full face value, 

with the effect of discharging the debt. In clarifying the concept of ‘legal tender’ under Union law, 

the Court has taken into consideration Commission Recommendation 2010/191 of 22 March 2010 

on  the  scope  and  effects  of  legal  tender  of  euro  banknotes  and  coins 9,  which  provides  useful 

guidance for the interpretation of the relevant provisions of Union law. Point 1 of Recommendation 

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5  
6  

7  
8  
9  

See paragraph 2.4 of Opinion CON/2017/8; paragraph 2.1 of Opinion CON/2019/41; paragraph 9.2.1 of Opinion 
CON/2020/13; paragraph 2.3 of Opinion CON/2020/21; paragraph 7.2.1 of Opinion CON/2021/9; and paragraph 
2.1 of CON/2021/18. All ECB opinions are published on EUR-Lex.  
See paragraph 1.5 of Opinion CON/2019/41. 
Article 127(2) of the Treaty and Article 3.1 of the Statute of the European System of Central Banks and of the 
European Central Bank (hereinafter the ‘Statute of the ESCB’). 
First sentence of Article 128(1) of the Treaty and first sentence of Article 16 of the Statute of the ESCB.  

Third sentence of Article 128(1) of the Treaty and third sentence of Article 16 of the Statute of the ESCB.  
OJ L 83, 30.3.2010, p. 70. 

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2010/191 states that, where a payment obligation exists, the legal tender of euro banknotes and 

coins should imply: (i) mandatory acceptance of those banknotes and coins; (ii) their acceptance 

at full face value; and (iii) their power to discharge from payment obligations. According to the 

Court,  this  shows  that  the  concept  of  ‘legal  tender’  encompasses,  inter  alia,  an  obligation  in 

principle to accept banknotes and coins denominated in euro for payment purposes10.  

2.4 

Insofar as it allows the Union legislature to lay down the measures necessary for the use of the 

euro as the single currency, the Court clarified that Article 133 of the Treaty empowers the Union 

legislature  alone  to  specify  the  legal  rules  governing  the  status  of  legal  tender  accorded  to 

banknotes and coins denominated in euro, insofar as that is necessary for the use of the euro as 

the single currency. Such exclusive competence precludes any competence on the part of the 

Member States in the matter, unless they have been empowered by the Union to do so or for the 

implementation of Union acts11. 

2.5 

However,  the Court further clarified that the status of  legal tender calls only for  acceptance in 

principle of banknotes and coins denominated in euro as a means of payment, not for absolute 

acceptance. The Union’s exclusive competence in matters of monetary policy is without prejudice 

to the competence of the Member States whose currency is the euro to regulate the procedures 

for settling pecuniary obligations, which do not affect the principle that, as a general rule, it must 

be possible to discharge a payment obligation in cash. Thus, that exclusive competence does not 

prevent  a  Member  State  from  adopting  a  measure  falling  within  one  of  the  Member  State’s 

competences;  for  instance,  a  Member  State  may,  based  on  its  competence  to  regulate 

administrative  procedures,  oblige  the  public  administration  to  accept  cash  payments  from 

citizens.  Neither  does  it  prevent  a  Member  State,  in  the  exercise  of  its  own  powers,  from 

introducing, on legitimate public interest grounds, a derogation from that obligation for statutorily 

imposed payments, subject to compliance with certain conditions. In particular, the obligation to 

accept  euro  banknotes  and  coins  may,  in  principle,  be  restricted  by  the  Member  States  for 

reasons of public interest and subject to the principle of proportionality. This means that any such 

restrictions  must  be  proportionate  to  the  public  interest  objective  pursued.  When  limiting  the 

possibility, recognised by Union law, of generally discharging a payment obligation in banknotes 

and coins denominated in euro, Member States must ensure that any measures comply with the 

principle of proportionality, which requires in particular that they are appropriate for achieving the 

legitimate objectives pursued by the legislation at issue and do not go beyond what is necessary 

in order to achieve those objectives 12.  

2.6 

The  Court  has  established  that  restrictions  of  the  legal  tender  status  of  euro  banknotes  in 

particular require that the legislation: (i) does not have the object or effect of establishing legal 

rules governing the status of legal tender of euro banknotes; (ii) does not lead, in law or in fact, 

10  

11  

12  

See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraphs 46 to 49. 

See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraphs 50 to 52.  

See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraphs 55 to 56 and 67 to 70. 

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to abolition of those banknotes, in particular by calling into question the possibility, as a general 

rule,  of  discharging  a  payment  obligation  in  cash;  (iii)  has  been  adopted  for  reasons  of  public 

interest; (iv) only entails a limitation on payments in cash that is appropriate for attaining the public 

interest objective pursued; and (v) only entails a limitation on payments in cash that does not go 

beyond what is necessary in order to achieve the public interest objective13. 

2.7 

Regarding  the  proportionality  of  a  restriction  of  the  legal  tender  status  of  euro  banknotes,  the 

Court requires not only that the measure is appropriate for attaining the public interest objective 

pursued, but also that it must not go beyond what is necessary in order to achieve that objective. 

The ECB has undertaken additional reflection in its opinions with respect to whether limitations 

may be considered proportionate14. In particular, the ECB has noted that the broader and more 

general a limitation is, the stricter should be the interpretation of the requirement for the limitation 

to  be  proportionate  to  the  objective  pursued.  When  considering  whether  a  limitation  is 

proportionate, the adverse impact of the limitation in question and whether alternative measures 

could be adopted that would fulfil the relevant objective with a less adverse impact should always 

be considered15. 

3. 

Specific observations 

3.1 

The Law’s abolition of cash payments for the specific purpose of making social contributions at 

the Social Insurance Agency has neither the objective nor the effect of amending the legal rules 

governing the status of legal tender of euro banknotes or coins. The Law does not lead, in law or 

in fact, to the abolition of banknotes in the Slovak Republic 16. 

3.2 

The ECB understands that the Law was adopted for reasons of public interest. The explanatory 

memorandum provides several reasons for limiting payments of social insurance contributions in 

cash. The ECB considers these various reasons to fundamentally fall into three different kinds of 

public interest objectives: (i) combating the shadow economy; (ii) avoiding unreasonable costs 

for public institutions that have to accept cash payments due to the risk of theft, counting errors, 

the use of counterfeit money and additional costs for providing security; and (iii) mitigating the 

risk of spreading dangerous and contagious diseases.  

3.3 

The ECB is of the view that the Slovak authorities have not demonstrated that the abolition of the 

option  to  pay  social  contributions  to  the  Social  Insurance  Agency  in  cash  is  appropriate  for 

attaining the pursued public interest objectives, and that this limitation of cash does not go beyond 

what is necessary to achieve these objectives.  

3.4 

First, it can be questioned whether a limitation of cash payments to the Social Insurance Agency 

is appropriate and necessary to combat the shadow economy. In particular, it is not clear how 

13  

14  

15  
16 

See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraph 78.  
See paragraph 4 of Opinion CON/2022/5 of the European Central Bank of 16 February 2022 on a proposal for a 
directive and a regulation on the prevention of the use of the financial system for the purposes of money laundering 
or terrorist financing (OJ, OJ C 210, 25.5.2022, p. 15). 

See paragraph 2.7 of Opinion CON/2017/8.  
See paragraph 4.6 of Opinion CON/2022/5.  

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removing the possibility to make a cash payment to a public law institution, such as the Social 

Insurance  Agency,  which  records  such  cash  payment  in  its  accounts  and  can  share  such 

information  with  other  public  (e.g.,  tax)  authorities 17,  can  contribute  to  combating  the  shadow 

economy. 

3.5 

Second, while the Court has accepted that it is in the public interest that monetary debts to public 

authorities may be honoured  in  a way that does  not  involve those authorities in unreasonable 

expense which would prevent them from providing services cost-effectively 18, the ECB is of the 

view  that  the  Slovak  authorities  have  not  sufficiently  demonstrated  that  the  Social  Insurance 

Agency incurred unreasonable expenses in accepting cash payments that would prevent it from 

providing cost-effective social services.  

3.6 

Third,  the Slovak  authorities have  not demonstrated  with data  that, during a pandemic or in a 

situation with epidemic potential, the abolition of the option to pay social contributions to the Social 

Insurance  Agency  in  cash  is  appropriate  and  necessary  to  mitigate  the  risk  of  spreading  a 

dangerous and contagious disease, where there are no or only insufficient measures mitigating 

the spread. In fact, the Eurosystem conducts regular research into the potential impact on public 

health  of  the  production  and  circulation  of  euro  banknotes,  including  in  relation  to  COVID-19. 

Within  the  context  of  the  COVID-19  pandemic,  it  has  been  shown  that  the  risk  of  virus 

transmission via banknotes and coins is very low and that cash is safe to use 19.  

3.7 

Finally, the Law and its explanatory memorandum do not address the proportionality of the cash 

payments  prohibition  in  light  of  existing  alternative  means  of  payment  for  the  relevant  social 

insurance contributions, namely bank transfers and postal orders, which are subject to additional 

fees for payers20.   

3.8 

To conclude, the ECB considers that the Slovak authorities have not sufficiently assessed the 

proportionality of the new limitation on cash payments. As the explanatory memorandum phrases 

the public interest objectives only in a vague manner and as the legislator has not provided any 

concrete impact assessment, it is difficult for the ECB to assess whether or not the limitation of 

cash payments to the Social Insurance Agency could be considered proportionate in light of the 

public  interest  objectives  pursued.  The  Slovak  authorities  should  thus  carefully  consider  any 

restrictions  on  cash  payments,  taking  into  account  the  criteria  established  by  the  Court.  In 

particular the Slovak authorities should ensure that restrictions on cash payments are appropriate 

and necessary to achieve the public interests pursued and do not call into question the possibility, 

as a general rule, of discharging a payment obligation in legal tender.  

17  
18  

19  

20  

See for example Section 170 of Law No 461/2003 Coll. on social insurance. 
See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraph 73. 
See  for  example  ECB  Occasional  Paper  Series,  Catch  me  (if  you  can):  assessing  the  risk  of  SARS-CoV-2 
transmission via euro cash, July 2021, available on the ECB website at www.ecb.europa.eu. 

See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraph 77; and paragraph 4.9 of Opinion CON/2022/5.  

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This opinion will be published on EUR-Lex. 

Done at Frankfurt am Main,7 March 2023. 

[Signed]

The President of the ECB 

Christine LAGARDE 

ECB-PUBLIC 

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