Littler Global Guide - Portugal - Q1 2017

SUMMARY

State Budget Law 42/2016 of December 28, 2017 - Enacted Legislation - Effective January 1, 2017, State Budget Law for 2017 introduced various modifications to the labor law landscape, which have had an immediate impact on the daily management of private companies, including... (see full summary)

 
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[author: Ricardo Grilo - Senior Associate — Garrigues]

State Budget Law 42/2016 of December 28, 2017

Enacted Legislation

Effective January 1, 2017, State Budget Law for 2017 introduced various modifications to the labor law landscape, which have had an immediate impact on the daily management of private companies, including: (i) the reinstatement of the pro rata monthly payment of 50% of the Christmas and vacation allowances and (ii) the review of the meal allowance payable to public servants (which is relevant for the calculation of the meal allowance personal income tax and social security contributions’ exemption threshold).

Work Accidents Pensions Update: Ordinance No. 97/2017

Enacted Legislation

Ordinance No. 97/2017 of March 7, updated the pensions for permanent disability and death as a result of a work accident for 2017. The pensions’ update is made by the application of a 0,5% increase, effective as from January 1, 2017.

Retirement Age: Ordinance No. 99/2017 of March 7, 2017

Enacted Legislation

Ordinance No. 99/2017, of March 7, 2017, updated to 66 years and 4 months the regular age to access retirement pension under the Portuguese general social security system. Such an update was made in accordance with Decree-Law No. 187/2007, of October 10, 2016, which determined the gradual update of the regular age to access the retirement pension in Social Security general system, considering the average life expectancy at 65 years old, between the second and third year prior to the commencement of the pension.

Sustainable Factor for Retirement and Invalidity Pension's Calculations

Enacted Legislation

Ordinance No. 99/2017, of March 7, 2017, also set the sustainable factor to be applicable in retirement or invalidity pensions, to be granted or converted during 2017, as follows: (i) Early retirement pension: 0,8612; (ii) Invalidity pensions (partial or total) for a 20 or less year period, to be converted in retirement pension: 0,9291.

Social Security Contributions from the Self-Employed

Enacted Legislation

Regulative Decree No. 2/2017 was published in the Official Gazette, introducing an amendment in article 62 of the Social Security Contributions Regulative Decree (Regulative Decree No. 1-A/2011, of January 3), that sets the rules to determine the self-employed workers’ relevant income for social security contributions.

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