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COVID-19 EU PolicyWatch

Database of national-level responses

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-2020-53/1731 Updated – measures in Portugal

New measures addressed to businesses and employment

Novas medidas destinadas às empresas e ao emprego

Country Portugal , applies nationwide
Time period Open ended, started on 30 December 2020
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Access to finance
Author Heloisa Perista and Maria da Paz Campos Lima (CESIS) and Eurofound
Case created 18 January 2021 (updated 20 July 2021)

Background information

In view of the evolution of the epidemiological and economic situations, the Portuguese Government continues to understand as a priority, in the current context, the following measures:

support for the maintenance of employment; strengthening of mechanisms to support the treasury situation of companies, in particular micro, small and medium-sized companies, which operate in the sectors most affected by the measures reducing social and economic activity, which in recent months have been accentuated; *support for job creation and maintenance; training and qualification.

Content of measure

The Resolution of the Council of Ministers 114/2020 approves (among other measures):

  1. Expansion of treasury support in the form of non-repayable subsidies (APOIAR Programme) to medium-sized companies and self-employed under simplified schemes.
  2. Support for non-residential leasing for micro, small and medium-sized companies, namely: treasury support, in the form of a non-repayable subsidy for immediate support, to take place during the first half of 2021, in the global amount of up to €300 million; credit line to allow payment of 2020 rents that have been deferred to 2021, in the global amount of up to €100 million.
  3. Expansion of the credit line to companies in the tourism sector that have a high percentage of turnover from exports of goods and the increase in the global amount of that line to €1,050 million, with the possibility of 20% of the credit granted to be converted into non-repayable loans, in case of maintenance of jobs.
  4. Launch, operationalisation and monitoring of a credit line aimed at Mid Cap and large companies operating in sectors particularly affected by the health crisis, in the global amount of €750 million.
  5. Extend the ATIVAR.PT programme to 2021.
  6. Streamline and extend the duration of support for the hiring of human resources in the social sector for the 1st half of 2021, namely within the scope of the emergency response support measure (MARESS).
  7. Move forward with initiatives in the field of training of employees and strengthening measures for training unemployed, adults and young adults, while efforts will be made to complete, in the 1st quarter of 2021, the dialogue process in course in social concertation on these matters.

These supports are cumulative with the other measures that have been approved by the Government in recent months to support the economy.

Eligibility conditions: the beneficiary companies have not been subject to insolvency proceedings; do not distribute funds to members; do not effect collective redundancies or extinguish jobs for economic reasons.

Updates

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

14 May 2021

Ordinance 102-A/2021, of 14 May, regulates the procedures, conditions and terms of access to the supports to be granted by the Institute for Employment and Vocational Training (IEFP, I. P.):

  • the new incentive to the normalisation of business activity, provided for in article 5 of Decree-Law 23-A/2021, of 24 March;
  • and the simplified support for micro-enterprises to maintain jobs, provided for in Decree-Law No. 46-A/2020, of 30 July.

The new incentive to normalisation aims to promote job maintenance and reduce the risk of unemployment of workers in companies affected by the effects of the pandemic COVID-19, by granting a financial incentive to the employer in the phase of return of their workers to normal work and normalisation of business activity.

The simplified support aims to promote job retention and reduce the risk of unemployment for workers in micro-enterprises in a situation of business crisis due to the COVID-19 pandemic, in order to mitigate the respective social and economic consequences, through the attribution of financial support to the employer.

Only employers with their head office in mainland Portugal are eligible.

The granting of the new incentive and the simplified support will only take place after the application of the preceding social security support ceases.

The new incentive is aimed at private employers, including those in the social sector, that have received, in the first quarter of 2021, at least one of the following supports:

  • Extraordinary support for the maintenance of a work contract, under the terms of article 2 of Decree-Law 6-E/2021, of 15 January, as amended;
  • Extraordinary support to the progressive resumption of activity in companies in a situation of business crisis, with a temporary reduction of the normal working period, under the terms of article 4 of Decree-Law 46-A/2020, of 30 July, in its current wording.

The new incentive is granted in one of the following modalities:

  • Incentive in the amount of twice the minimum monthly guaranteed remuneration (RMMG) per worker covered by the support referred to above, paid in a phased manner over six months, when applied for by 31 May 2021;
  • An incentive in the amount of one RMMG per worker covered by the support referred to above, paid in a lump sum, when requested after 31 May 2021 and until 31 August 2021, being considered as corresponding to a concession period of three months.

The simplified support is aimed at private employers, including those of the social sector, that are considered micro-enterprises, under the terms of paragraph 1 of article 100 of the Labour Code, that are in a situation of business crisis, under the terms of article 3 of Decree-Law 46-A/2020, of 30 July, in its current wording, and that have benefited in 2020 from at least one of the following supports:

  • Extraordinary support to the maintenance of a work contract, provided for in article 5 of Decree-Law10-G/2020, of 26 March, as amended;
  • Extraordinary support to the progressive resumption of activity in companies in a business crisis situation, with a temporary reduction of the normal working period, provided for in article 4 of Decree-Law 46-A/2020, of 30 July, in its current wording.

Simplified support shall consist of financial assistance amounting to twice the RMMG per worker covered by the measures referred to above, paid in phases over six months.

The new incentive and the simplified support are eligible for European funding.

24 March 2021

Decree-Law 23-A/2021, of 24 March, amends the scheme that creates the extraordinary support to the progressive resumption of activity in companies in a situation of business crisis with a temporary reduction of the normal working period and the scheme that establishes support mechanisms under the state of emergency. It also creates extraordinary support measures for workers and economic activity in the context of the state of emergency. The following measures were approved:

  1. The extraordinary support for the reduction of economic activity of workers, which has already provided a response to self-employed workers, sole proprietors, managers and members of statutory bodies with management functions, it is reactivated in relation to workers in tourism, culture, events and shows, whose activity, not being suspended or closed, is still in a situation of proven downtime.
  2. The extraordinary support for gradual recovery is extended until 30 September 2021, and new contribution exemptions and partial exemptions are established within this support, especially for the tourism and culture sectors, which are particularly affected by the present health crisis.
  3. The application of simplified support for micro-enterprises is guaranteed during the third quarter of 2021, granting additional support during this period in the amount equivalent to a guaranteed minimum monthly remuneration (RMMG).
  4. A new extraordinary incentive for the normalisation of business activity is also created, of an amount equivalent up to two RMMG per worker that has been covered in the first quarter of 2021 by the extraordinary support to the maintenance of the labour contract or by the extraordinary support to the progressive resumption of activity. Added to this incentive is the right to a 50% partial waiver of the payment of social security contributions borne by the employer, with reference to the workers covered, during the first two months of the support.
  5. Within the scope of vocational training cumulative with the extraordinary support to the progressive resumption of activity, an extraordinary deadline is established for the start of training plans already approved by the Employment and Vocational Training Institute, I. P., but which have not started in practice due to the suspension of on-site training activities by legislative or administrative determination from a governmental source.
  6. The financing from the State Budget for the additional expenditure resulting from this support and for the loss of revenue resulting from the tax exemptions and dispensations granted is maintained, thus promoting, in particular, the sustainability of social security.

Use of measure

According to the COVID-19 monitoring indicators released by GEP / MTSSS, on 7 May 2021:

  1. Support to the progressive resumption of companies' economic activity: 39,411 employers submitted the document for requiring support; these companies have a total of 397,180 workers. (Data refer to 27 Abril 2021).
  2. Extraordinary incentive for the normalisation of economic activity: 55,451 applications; 53,372 applications approved/to be approved; 470,982 jobs. (Data refer to 1 May 2021).

Target groups

Workers Businesses Citizens
Does not apply to workers Solo-self-employed
SMEs
One person or microenterprises
Larger corporations
Does not apply to citizens

Actors and funding

Actors Funding
National government
European Funds
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:

  • No involvement
  • Main level of involvement: Peak or cross-sectoral level

Involvement

The social partners sitting on the Standing Committee for Social Concertation were heard.

Views and reactions

Unknown.

Sources

  • 30 December 2020: Resolução do Conselho de Ministros nº 114/2020
  • 24 March 2021: Decreto-Lei n.º 23-A/2021 de 24 de Març (dre.pt)
  • 27 April 2021: Apoio à retoma progressiva - GEP / MTSSS (www.gep.mtsss.gov.pt)
  • 01 May 2021: Incentivo extraordinário à normalização da atividade economica (www.gep.mtsss.gov.pt)
  • 14 May 2021: Portaria n.º 102-A/2021 (data.dre.pt)

Citation

Eurofound (2021), New measures addressed to businesses and employment, case PT-2020-53/1731 (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.