Work: Social security news in Portugal

The Portuguese government plans to reduce criminal penalties for employers who fail to report worker contracts to Social Security, proposing the removal of prison sentences and a significant reduction in maximum fines.

The tax authority has issued a new ruling removing the requirement for a collective bargaining agreement to qualify for tax-exempt productivity bonuses, significantly broadening eligibility for workers.

President António José Seguro has enacted a decree providing 100% salary coverage for workers under a simplified lay-off scheme in regions impacted by Storm Kristin, following parliamentary approval.

Former Labour Minister Ana Mendes Godinho has urged the Socialist Party to adopt an uncompromising stance against the proposed labour package, labeling it an attack on workers' rights and predicting its failure.

Fesinap anticipates a significant turnout for Monday's 24-hour public sector strike, with healthcare, education, and social security services expected to face the most disruption due to grievances over performance evaluations and staffing levels.

Mário Centeno's retirement at 59 with a 10,000 euro monthly pension from the Bank of Portugal has sparked scrutiny over the specific terms of his departure agreement and the calculation of his service years.

Beneficiaries can now instantly view sickness benefit calculations and submit work-related accident forms online for improved accessibility.

Foreign workers now make up 17.6% of Social Security contributors, a significant rise from 4.5% a decade ago. In December 2025, over 840,000 immigrant professionals contributed, reflecting a 5.4-fold increase since December 2015. Total contributions reached over 4.1 billion euros last year, an 8.5-fold increase from 491 million euros a decade earlier. This data, released by the Ministry of Labour, aims to dispel myths about immigrants and their contributions, with Secretary of State Filipa Lima emphasizing the need for transparency in statistics. The dashboard will provide detailed monthly updates on contributions by nationality and age, highlighting a notable increase in contributions from foreign workers, particularly in agriculture, hospitality, administrative services, and construction.

Support for families affected by the storm can reach up to 1074 euros per person. Applications for this support are made online, with Social Security required to respond within five days. Additionally, companies and self-employed individuals have a 30-day window to request a full exemption from social security contributions. However, it is important to note that a 100% salary guarantee during layoff is not included in this support.

The Government confirmed that workers placed on the simplified lay-off because of Kristin will receive 100% of their normal net pay, capped at three times the national minimum wage (€2,760). The guarantee strengthens immediate income protection for affected employees, though its fiscal and administrative implications will depend on eligibility rules, duration and how costs are shared between employers and public funds.

Following a severe storm, the government has eased its layoff scheme for affected firms: Social Security will cover 80% of salaries, guaranteeing workers their full pay up to €2,760, and shifting a larger share of labour costs and obligations away from employers.

A parliamentary move — despite abstentions from PSD and CDS-PP — brings Portugal closer to lengthening the initial parental leave available to working parents. The new episode of the 'Ao Trabalho!' podcast examines that development alongside other labour‑market highlights, offering concise analysis of labour, social-security and employment-law developments every Thursday.

A citizens' initiative that gathered more than 42,000 signatures has forced Parliament to reopen debate on reforming initial parental leave. The proposal — to extend leave from the current 120/150 days to 180/210 days (effectively six months) at 100% pay regardless of how it is shared between parents — will be reconsidered in the Assembly of the Republic after an earlier attempt was nullified by the dissolution of the Assembly and the fall of the Government in March 2025. An earlier related extension was approved on 27 September 2024, but procedural developments and the renewed petition have brought the issue back onto the legislative agenda.

A rise in the guaranteed national minimum wage to €920 gross per month, together with higher employer Social Security contributions, will raise labour costs by about €866 a year for each worker on the minimum wage. The increase reflects both direct pay and associated employer charges and will squeeze firm margins — particularly in low-margin sectors — with potential knock‑on effects on prices, hiring decisions and informal employment. Policymakers and businesses will need to weigh targeted support, phased implementation or productivity measures to offset the impact on competitiveness and employment.

This analytical piece urges readers to adopt an optimistic stance for the new year and to move past complaints about the recent increase in the retirement age. It explains that demographic shifts and the strain on social security systems underpin the policy change, outlines labour and legal implications for workers — including expatriates — and argues that better communication, phased implementation, retraining and age-friendly workplace measures would protect wellbeing while ensuring fiscal sustainability.