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Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case PT-2020-12/432 Updated – measures in Portugal

Extraordinary support for the reduction of self-employed economic activity

Apoio extraordinário à redução da atividade económica de trabalhador independente

Country Portugal , applies nationwide
Time period Open ended, started on 15 March 2020
Type Legislations or other statutory regulations
Category Income protection beyond short-time work
– Extensions of income support to workers not covered by any kind of protection scheme
Author Heloisa Perista and Maria da Paz Campos Lima (CESIS) and Eurofound
Case created 09 April 2020 (updated 27 July 2021)

Background information

The ‘Extraordinary support for the reduction of self-employed economic activity’ - as a result of the COVID -19 pandemic - was established by Decree-Law no. 10-A/2020 of 13 March (article 26). It established the right to financial assistance – up to a maximum of six months payment – for self-employed workers who perform exclusively activities under the self-employed regime (and that are not pensioners), under certain conditions, when they had to stop completely their activity on the grounds of the economic impact of COVID-19 pandemic.

The Decree Law no. 12-A/2020 of 6 April - that prorogue the ‘state of emergency’ – updated the provisions defining that financial supports applies also in case of partial reduction of activity and introduced two ceilings for the maximum amount of financial support depending of self-employed workers previous earnings. Moreover, this amendment extends also the extraordinary support to managing partners of companies, as well as other members of bodies, without employees, under certain conditions.

The amendments introduced in May 2020 extended to managing partners or similar entities with employees with a turnover of less than €80,000 (Decree Law 20-C / 2020 of 7 May) and created two additional measures: the ‘extraordinary measure to encourage professional activity” aimed at self-employed workers with records of contributions below those required to access the ‘extraordinary support' and the ‘support for social self-employed in unprotected situations’, aimed at informal workers.

Finally the amendments introduced in August 2020 extended the allowance to self-employed workers having also a labour contract under certain conditions (Law 31/2020 of 11 August).

Content of measure

Article 2 of Decree Law no. 12-A/2020 of 6 April establishes: Extraordinary support for the reduction of self-employed economic activity takes the form of support financial assistance to workers covered exclusively by the self-employed regime who are not pensioners, subject to compliance with contributory obligations in at least 3 consecutive months or six months interpolated for at least 12 months:

  • In a proven situation of total stop of activity or of stop of the activity of the respective sector as a result of the COVID-19 disease pandemic; or
  • By means of a declaration by the applicant to support and an accountant's certificate that attests to it, in a situation of abrupt and sharp breakdown of at least 40% of the billing in the period of thirty days, prior to the application to the competent social security services, with reference to the monthly average of the two months prior to that period, or compared to the period previous year or, for those who started the activity less than 12 months before.

During the period of application of this measure, the self-employed person is entitled to financial support lasting one month, extendable monthly, up to a maximum of six months, corresponding to:

  • The value of the remuneration recorded as a contributory basis, with the maximum value of Social Support Index (Indexante de Apoios Sociais, IAS), currently €438.81, in situations where the value of the remuneration recorded as a basis incidence is less than 1.5 IAS;
  • Two thirds of the value of the remuneration recorded as a base of contributory incidence, with the maximum limit of the mandatory minimum wage, currently €635, in situations where the value of the registered remuneration is higher or equal to 1.5 IAS.

Financial support is paid from the month following the submission of the application. The support provided is granted, with the necessary adaptations, to partners - managers of companies, as well as members of statutory bodies of foundations, associations or cooperatives with functions equivalent to those, without employees that, in the previous year, had invoices with less than €60,000.

Updates

The following updates to this measure have been made after it came into effect.

07 April 2021

The amendment imposed by the Assembly of the Republic to article 3 of Decree Law 6 -E/2021, of 15 January, introduced by Law No. 15/2021 established a safeguard clause to protect workers defining that for the purposes of calculating the support granted under the extraordinary support for reduction of economic activity of the self-employed workers and the extraordinary measure of incentive to professional activity, it should be considered the monthly average annual income of the worker in the year 2019.

15 January 2021

Decree Law 6-E/2021 of 15 January 2021 (article 3) prolonged the right to resort to the extraordinary support for reduction of economic activity for the period of suspension of activities or closure of facilities and establishments by legislative or administrative determination of the government during the state of emergency.

13 July 2020

The ‘Extraordinary support for the reduction of self-employed economic activity’ - as a result of the COVID-19 pandemic - established by Decree-Law 10-A/2020 of 15 March (article 26) was regulated by the Order 94-A/2020, of 16 April.

For the calculation of the support, the remuneration considered corresponds:

  • for independent workers: to the average of the basic contributory incidence in the months with record of remunerations in the previous 12 months;
  • for managing partners of companies: to the basic remuneration declared in March 2020, or if not existing to the Social Support Index.

Use of measure

Information by the Ministry of Labour, Solidarity and Social Security (MTSS) - April 2010 'COVID-19 | Informação relativa a famílias e empresas no âmbito do MTSSS': Estimated that on 7 April 2020, around 117,000 independent workers were with reduced activity.

Information by the GEP / Ministry of Labour, Solidarity and Social Security (MTSSS) - 7 July 2020:

  • Reduction of activity of independent worker (March-June): 156,313 - 84,768 women and 71,545 men
  • Extension - Reduction of activity of independent worker (April-June): 127,447 - 69,348 women and 58,099 men
  • Reduction of activity of worker member of statutory body (April-May): 18,918 - 7,197 women and 11,721 men
  • Extension - Reduction of activity of worker member of statutory body (May): 8,843 - 3,284 women and 5,559 men

The information 'Indicadores COVID-19' published by the Strategy Planning Office of the Ministry of Labour, Solidarity and Social Security (GEP/MTSSS) provides to the number of independent workers that applied for this support. See

According to the information published on 12 February 2021 - accumulated data since the measure entered in March until the end of December 2020 the total number of self-employed applying was 214,618 of whom 20,091 with reduced activity.

Target groups

Workers Businesses Citizens
Self-employed
Other groups of workers
Solo-self-employed
Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
Public employment service
Social insurance
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: Unknown

Involvement

The social partners were informed at the tripartite Standing Committee for Social Concertation.

Views and reactions

Employer and trade union confederations were informed at the tripartite Standing Committee for Social Concertation.

Sources

  • 13 March 2020: DECRETO-LEI N.º 10-A/2020 - DIÁRIO DA REPÚBLICA N.º 52/2020, 1º SUPLEMENTO, SÉRIE I DE 2020-03-13 (dre.pt)
  • 06 April 2020: Decreto -Lei n.º 12-A/2020 de 6 de abril (dre.pt)
  • 16 April 2020: Portaria n.º 94-A/2020 - Diário da República n.º 75/2020, 1º Suplemento, Série I Publicação: Diário da República n.º 75/2020, 1º Suplemento, Série I (dre.pt)
  • 07 May 2020: Decreto-Lei n.º 20-C/202 (dre.pt)
  • 24 July 2020: Lei n.º 27-A/2020 (dre.pt)
  • 11 August 2020: Lei n.º 31/2020 (dre.pt)
  • 15 January 2021: Decreto-Lei n.º 6-E/2021 de 15 de Janeir (dre.pt)
  • 12 February 2021: Indicadores Covid-19 MTSS (www.gep.mtsss.gov.pt)
  • 07 April 2021: Lei n.º 15/2021 (data.dre.pt)
  • 13 April 2021: Decreto-Lei n.º 26-C/2021 (data.dre.pt)

Citation

Eurofound (2020), Extraordinary support for the reduction of self-employed economic activity, case PT-2020-12/432 (measures in Portugal), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.