Background information

The one-off measure ‘exceptional supplement for pensioner' was decided by the Resolution of the Council of Ministers 74-A/2022 of 6 September 2022 which announced the package of extraordinary measures 'Families First' (Familias Primeiro) in view to directly support the purchasing power of families and mitigate the effects of inflation and rising prices for essential goods. The measure came into force with the publication of Decree-Law 57-C/2022 of 6 September.

The Resolution of the Council of Ministers 74-A/2022 includes other decisions linked with this measure, which were not included in the Decree-Law 57-C/2022 because they are dependent of parliamentary examination. Namely, the Resolution presented this 'extraordinary supplement' measure as an advance of part of the update foreseen for pensions in 2023 and considered suspending the automatic update of pensions (automatic update according to the Law 53-B/2006), which was initially expected to vary between 7% and 8%, and reduce it by half. Thus pensions up to €886 should receive, in January 2023, an increase of 4.43%; pensions between €886 and €2,659 receive an additional 4.07% and the remaining pensions usually subject to updating benefit from an increase of 3.53%.

Content of measure

The ‘exceptional supplement for pensioner', established by Article 4 of Decree-Law 57-C/2022 of 6 September, applies to all pensions subject to mandatory updating by law, that is, pensions worth monthly less than 12 X social support index (corresponding to €5,265.72 in 2022).

The measure consists of a payment of an additional amount of 50% of the monthly pension of each pensioner, that will be made in one lump sum, together with the October pension payment. The purpose of the measure is to compensate pensioners for the conjectural increase in prices.

The eligibility criteria comprise all disability, old age and survivor pensioners of the social security system and of the convergent social protection regime, residing in national territory, who receive pensions (covered by Laws No. 53-B/2006 in its current wording, and 52/2007, of 31 August, in its current wording), are entitled, in October 2022).

The Resolution of the Council of Ministers 74-A/2022 includes other decisions linked with this measure, which were not included in the Decree-Law 57-C/2022 because they are dependent of parliamentary approval and of final acceptance of the President of the Republic. Namely, the Resolution presented this 'extraordinary supplement' measure as an advance of part of the pensions update foreseen for 2023. The government bill no. 33/XV, approved at the parliament on 16 September 2022, suspends the automatic update of pensions foreseen by Law 53-B/2006, which was initially expected to vary between 7 and 8%, and reduce it by half. Thus, according to the bill, pensions up to €886 should receive, in January 2023, an increase of 4.43%; pensions between €886 and €2,659 receive an additional 4.07% and the remaining pensions usually subject to updating benefit from an increase of 3.53%.

Use of measure

According to the estimation of the Minister of Finances presented at a press conference on 6 September 2022, the measure will cover 2.7 million pensioners. The measure will cost €1 billion from the €2.4 billion package “Families first” of the government's plan to mitigate the impacts of inflation.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Does not apply to businesses	Pensioners

Actors and funding

Actors	Funding
National government 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:

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

Involvement

The social partners were informed.

Views and reactions

The reactions of the social partners, namely the trade union confederations, ie. the General Confederation of Portuguese Workers (CGTP) and the General Workers’ Union (UGT) did not concern the measure 'extraordinary supplement' per se, as established by the Decree-Law 57-C/2022, but the framework of measures concerning future pensions (2023 and beyond) to which the Resolution of the Council of Ministers linked the 'extraordinary supplement'. Namely they disagree with the suspension of the Law 53-B/2006 which would guarantee an automatic update of pensions expected to vary between 7% and 8% in 2023, and with the projected increases by half defined in the Resolution, not only because of the impact on 2023 but because of the long term impact in reducing pensions. The debate will continue, once these other measures have to be discussed at the parliament in the near future.

Sources

• 06 September 2022: Decree-Law 57-C/2022 of 6 September (dre.pt)
• 06 September 2022: Resolução do Conselho de Ministros n.º 74-A/2022, de 6 de setembr (dre.pt)