Legal Retirement Age The legal retirement age is regularly adjusted according to life expectancy. In 2020, it is set at 66 years and 5 months.

For 2023 and 2024, the legal retirement age is set at 66 years and 4 months.

The increase* in the legal retirement age also applies to access to the social old-age pension (non-contributory pension) and the elderly solidarity supplement (complemento solidário para idosos).

• Between 2014 and 2022, the retirement age steadily increased. However, due to the recent decline in life expectancy observed in Portugal, it decreased from 66 years and 7 months in 2022 to 66 years and 4 months (-3 months) in January 2023.

Compatibility

The old-age pension (pensão de velhice) cannot be combined with:

• Daily sickness benefit (subsídio de doença)
• Unemployment benefit (subsídio de desemprego)

Furthermore, when the old-age pension replaces a total disability pension (invalidez absoluta), it is not possible to engage in professional activity.

Deferred Pension

If the insured person continues working beyond the legal retirement age, the pension is increased for each month completed beyond this age and up to age 70. The increase rate varies between 0.33% and 1% depending on years of contributions:

Early Retirement

The insured person aged 60 or over who has at least 40 years of contributions with registered earnings may request early pension liquidation.

The months of anticipation (between pension liquidation and normal retirement age) used to determine the pension reduction rate (0.5% for each month of anticipation) are reduced by 4 months per year of contributions beyond 40. The anticipation coefficient is eliminated after 48 years of contributions, or after 46 years of contributions for people who started contributing before age 17.

Early retirement is also possible from age 57 or 62 for insured persons in long-term unemployment situations (pensão antecipada por desemprego de longa duração).

Pension Calculation

Note: To calculate the amount of a Portuguese old-age pension, insurance periods completed before 2002 are distinguished from those completed after that date. The following explanations concern periods contributed since 2002. For people with earlier insurance periods, the pre-2002 calculation rules are partially used. More information available.

The pension is calculated based on average monthly earnings over the entire professional career, up to 40 years. For longer careers, the 40 years with the highest earnings are considered. For a year to be counted, it must include at least 120 days of registered earnings.

The old-age pension amount equals the product of the reference income and the annual rate applied based on insurance duration.

For certain early pensions, a sustainability coefficient (fator de sustentabilidade) is applied (depending on insurance duration and early pension category). This corresponds to the ratio between average life expectancy at 65 in 2000 and that observed in the year preceding pension liquidation. In 2020, it is 0.8480.

As of January 1, 2023, the sustainability coefficient is 0.8617.

Old-age Pension = R x Ta

Where: R = reference income, calculated as total remuneration over the entire career, divided by the number of professional years (minimum 15 and maximum 40) x 14

Ta = annual rate (number of years with registered earnings considered for calculation). Up to 20 years of contributions, the annual rate is fixed at 2%; beyond that, it ranges between 2% and 2.3%, depending on the reference income.

The minimum old-age pension amount depends on the insured person’s contribution period:

Supplements

Elderly Solidarity Supplement (complemento solidário para idosos) Subject to residing in Portugal for at least 6 years, pensioners* whose annual income is below €5,258.63 (single person) or €9,202.63 (couple) may receive a monthly payment equal to the difference between their income and these amounts (2020 values).

• They must have reached the legal retirement age.

Dependency Supplement (complemento por dependência) In 2020, a monthly amount of €105.90 (1st degree of dependency) or €190.61 (2nd degree) is paid to pensioners who need daily assistance from a third party.

2. Disability

• Work incapacity of non-occupational origin confirmed by the SVI (Sistema de Verificação de Incapacidades)
• A certain period of membership in the Portuguese general social security system, depending on the degree of incapacity

a) Relative Disability

Relative disability (invalidez relativa) is considered to be any permanent incapacity that causes a reduction of more than 2/3 of the insured person’s earnings compared to the normal exercise of their professional activity. Disability is declared if it is considered that the next 3 years will not allow the insured person to earn more than half of their last salary.

The insured person must have at least 5 years of membership, consecutive or not, in the social security system. A year is counted from 120 days of registered earnings.

The disability pension is calculated in the same way as the old-age pension. It is paid as long as the incapacity lasts, not exceeding retirement age, at which point it is replaced by the old-age pension.

The minimum amount of the relative disability pension is identical to the minimum old-age pension.

The relative disability pension may be combined with employment, within certain limits (more information available).

b) Total Disability

Total disability (invalidez absoluta) is defined as any incapacity that results in a permanent loss of the ability to work (not only in one’s profession but for any type of work). To qualify for the total disability pension, the insured person must have at least 3 years of membership.

The disability pension is granted until retirement age at the latest, where it is converted into an old-age pension.

The disability pension is calculated in the same way as the old-age pension.

In 2020, the minimum monthly amount for the total disability pension is €398.34.

Note: The total disability pension cannot be combined with any professional activity, regardless of the income earned from the activity.

It is possible to simulate the calculation of the disability pension amount by connecting to the social security online services (simulador de pensões).

c) Social Inclusion

Benefit The social inclusion benefit (Prestação Social para a Inclusão) is awarded, subject to means testing, to residents with a disability rate between 60% and 80% who do not receive a disability pension, or to disability pension recipients with a rate above 80%. Monthly resources must be below the base amount of the benefit. The disability must be certified before age 55.

The base amount is up to €273.39 per month (€136.70 before age 18). The supplement is up to €438.22, increased by 75% for each household member who is a beneficiary (from age 18 only).

The benefit cannot be combined with a social pension (or its solidarity supplement) or with the supplement to family benefits for disabled children.

3. Survivors

Conditions Survivors’ insurance covers:

• the surviving spouse
• former spouse who received alimony
• person who lived with the deceased in a marriage-like relationship
• children

In the absence of other beneficiaries, parents who were dependent on the insured person may receive a survivor’s pension.

The deceased must have had at least 36 months of insurance.

In the absence of children, the surviving spouse must have been married to the insured person for at least 1 year (this condition is waived when death is caused by an accident).

In the absence of marriage, it is necessary to have lived with the insured person for at least 2 years.

Note:

• If the beneficiary is under 35 years old, the surviving spouse’s pension is only paid for 5 years. This age condition does not apply if there are dependent children or in case of permanent work incapacity.
• The surviving spouse’s pension is terminated in case of remarriage.
• For a former spouse, the survivor’s pension cannot exceed the alimony previously paid by the insured person.
• Children may receive a survivor’s pension until age 18, or until 25/27 if they are pursuing studies (depending on the type of studies). Children with permanent and total work incapacity continue to receive benefits as long as the incapacity lasts.

Amount The amount of the survivor’s pension depends on the old-age or disability pension that the insured person was receiving or would have been entitled to:

• 60% for the surviving spouse/partner or former spouse (70% if both are entitled)
• 20%, 30% or 40% for 1, 2 or 3 or more children. In the absence of a spouse or former spouse, these amounts are doubled
• 30%, 50%, or 80% for ascendants (for 1, 2, or 3 or more beneficiaries respectively)

E. Unemployment

The unemployment insurance system covers only employed workers and certain groups of self-employed workers. There is no voluntary insurance.

1. Total Unemployment

a) Unemployment Benefits

To qualify for unemployment benefits (subsídio de desemprego), one must have worked as an employee for at least 360 days in the 24 months preceding unemployment.

Additionally, the person must:

• reside in Portugal
• be able and available for work
• be registered with the local employment center (centro de emprego)
• actively seek work
• not be receiving an old-age pension

The daily amount of unemployment benefit is set at 65% of the average daily earnings from the 12 months preceding the 2 months before job loss. The monthly benefit amount cannot exceed 2.5 times the IAS (IAS in 2020 = €438.81), meaning €1,097.03 in 2020. The minimum amount corresponds to the IAS amount or equals the reference earnings when these are lower than the IAS.

Note: The unemployment benefit amount is increased by 10% for single parents or when both spouses are benefit recipients and have dependent children.

The unemployment benefit is paid without a waiting period.

The duration of benefit payment depends on the insured person’s age and contributory career length:

• For each 5-year contribution period during the last 20 years. Source: Social Security Institute

b) Unemployment Assistance

Unemployment assistance (subsídio social de desemprego) is granted, subject to means testing, to insured persons who have exhausted their right to unemployment benefits or do not meet the contribution duration requirement to receive them. As with unemployment benefit, the person must be able and available for work, registered with the employment center (centro de emprego), actively seeking work, and not receiving an old-age pension. The person must also:

• demonstrate at least 180* days of paid employment during the 12 months preceding job loss
• have monthly income not exceeding 80% of the IAS

• 120 days when unemployment results from the end of a fixed-term contract or employer-decided termination of a trial period.

IAS in 2020 = €438.81

The daily amount of unemployment assistance is set at 100% of the IAS for unemployed persons with dependents and 80% for those without family responsibilities.

The duration of payment is generally identical to that of unemployment benefit. However, for insured persons under 40 years of age, when unemployment assistance is granted after exhaustion of unemployment benefit, the payment duration is halved.

2. Partial Unemployment

The partial unemployment benefit (subsídio de desemprego parcial) is granted to insured persons who engage in part-time employed or self-employed activity with income lower than the unemployment benefit amount (subsídio de desemprego) when they meet the conditions for the latter.

For employees, the partial unemployment benefit amount equals the difference between the unemployment benefit increased by 35% and the professional income.

The payment duration corresponds to that of total unemployment benefits.

F. Family Benefits

1. Family Allowances

Family allowances (abono de família para crianças e jovens) are paid subject to family income conditions for children residing in Portugal. The allowance amount also depends on the child’s age and household composition.

Generally, family allowances are provided until the child reaches 16 years of age. The age limit can be extended up to 24 years for students or those with disabilities, and in certain cases of infirmity, by an additional 3 years. The child must not engage in professional activity.

The family’s annual income must not exceed €15,358.35 (2020).

Monthly Amounts in Effect as of January 1, 2020

• Income brackets are calculated based on multiples of the IAS (set at €438.81 in 2020) and correspond to:

• Income equal to or less than 0.5 x IAS x 14
• Income between 0.5 x IAS x 14 and 1 x IAS x 14
• Income between 1 x IAS x 14 and 1.5 x IAS x 14
• Income between 1.5 x IAS x 14 and 2.5 x IAS x 14 Source: Official Portuguese Social Security website

Families with annual income less than €3,071.67 (2020) receive an additional annual amount paid in September for any school-age child between 6 and 16 years. The amount corresponds to one monthly payment of the family allowance received for that child.

2. Other Family Benefits

a) Prenatal Family

Allowance The prenatal family allowance (abono de família pré-natal) is paid monthly starting from the month following the 13th week of pregnancy and for 6 months, or until the month of birth if the pregnancy period exceeds 40 weeks.

The amount received depends on household income (2019 amounts):

Income Ceiling The prenatal family allowance is not granted when the annual household income exceeds €15,358.35 (2020).

b) Supplementary Allowance for Disabled

Young People and Care Allowance The supplementary allowance for disabled young people (bonificação do abono de família para crianças e jovens com deficiência) is a supplement to family allowances, granted to disabled children and young people under 24 years of age.

Only allowances already granted as of September 30, 2019, continue to be paid until the recipients turn 24. For new applications since that date, the allowance is for children up to 10 years of age maximum.

In 2020, its monthly amount is:

• €63.01 (up to 14 years)
• €91.78 (between 14 and 18 years)
• €122.85 (from 18 to 24 years)

A care allowance (subsídio por assistência de terceira pessoa) of a fixed amount of €108.68 per month (2020) may be added to this supplementary allowance when the disabled young person needs permanent assistance from a third party for ordinary daily life activities.

c) Single Parent Allowance

For single parents, family allowances and other related allowances and supplements are increased by 35%.

d) Funeral Allowance

The funeral allowance (subsídio de funeral) is paid as a lump sum to the person residing in Portugal, whether a family member or not of the deceased person, who has borne the funeral expenses and is not entitled to the death grant (subsídio por morte) under the survivors’ insurance scheme.

In 2020, it amounts to €219.96.