Government measures in key jurisdictions 4th edition - Flipbook - Page 101
Portugal
101
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Extraordinary Incentive for Business Regularization: This incentive aims to support the maintenance of
employment and to reduce the risks of unemployment for employees working for companies affected
by the business crisis, as a result of the pandemic caused by the COVID-19 outbreak. Companies which
have benefited from the simplified lay-off regime may accede the extraordinary incentive for the
normalization of business activity. The payment of the incentive is made as follows: (i) the payment of
the incentive under the modality of one minimum month wage (€635), is made in one installment,
within 10 working days as from the date of communication of the approval of the application to the
incentive; (ii) the payment of the incentive under the modality of two minimum month wages
(€1,270), is made in two installments with the same amount, under the following terms:
- The first installment is paid within 10 working days as from the date of communication of the approval of
the application to the incentive;
- The second installment is paid within 180 days following the last day of application of the extraordinary
support for the maintenance of employment contracts (“simplified lay-off”) or the extraordinary training
plan.
- The extraordinary incentive for the normalization of business activity is only granted once to each
employer, and only in one of the modalities provided for in the Ordinance no. 170-A/2020 of 13 July.
Therefore, only one application should be submitted by each employer. The application is made
through electronic submission at https://iefponline.iefp.pt/, and shall be accompanied by the
documents set forth in the applicable legislation. Resorting to this incentive will preclude the possibility
of resorting to the progressive resumption support measure provided for in the Resolution of the
Council of Ministers no. 41/2020, of 6 June.
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Progressive resumption support measure: This measure is considered a substitute measure (for
companies who may no longer resort to the simplified lay-off regime). It applies to employers who have
been affected by the COVID-19 pandemic and who are, as a result, in a situation of business crisis, i.e.,
with a decrease in revenues of 40% or more. Thus, the employer can access the extraordinary support
for the progressive resumption of activity with a temporary reduction of the normal work period of all
or some of its employees, being able to resort to this reduction and its respective remuneration for one
month, with a monthly extension up to a maximum of 5 months. The employer is entitled to financial
support exclusively for the purpose of paying compensation to employees covered by the reduction of
the normal working period. Social security support corresponds to 70% of this compensation, the
remaining 30% being provided by the employer. In the event of a serious business crisis, with a 75% or
more drop in turnover, the employer is also entitled to 35% of the gross remuneration to be paid by the
Social Security to the employee for the hours worked. To resort to this support measure, the employer
must submit an electronic application, in a proper form, through the Direct Social Security, with the
employer's declaration and the certified accountant's declaration (Mod. 3058-DGSS) attesting the
business crisis situation. The form must be accompanied by a nominative list of the employees to be
covered, their social security number, gross normal pay and an indication of the reduction in the normal
working period to be applied, in average monthly terms, per employee. Consent must also be given for
consultation of the tax standing with the tax authorities, as well as registration of the IBAN to which the
financial support will be credited. Access to this support measure precludes the possibility to resorting
to the abovementioned Extraordinary Incentive for Business Regularization.
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Exemption from contributions: either under the simplified lay-off regime and progressive
resumption support measure, the employer has some benefits as regards contribution obligations to
which is bound. Specifically regarding the progressive resumption support measure, the employer is
also entitled to partial exemption or waiver of the payment of contributions relating to the employees
covered, with regard to the value of the compensation. This right varies according to the size of the
company and the month of application of the support: (i) companies with less than 250 employees are
entitled to full exemption from the payment of contributions relating to compensation in August and
September and partial exemption of 50% in the months of October to December; (ii) companies with
250 or more employees are entitled to partial exemption of 50% of the payment of contributions
related to the compensation in August and September.
Government measures in key jurisdictions