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Amendments to social protection legal framework for unemployment, illness and parenthood

Portugal - 

Labor and Employment Law Alert 12-2018

The Decree-law 53/2018, of July 2, 2018, entered into force and introduced several amendments in the legal framework for social protection in the event of unemployment, illness and parenthood.

The abovementioned amendments aim to approach the conditions and legal requirements applicable to dependent workers, self-employed workers and members of statutory bodies, in case of unemployment, illness and parenthood. 

The following can be highlighted:

1. Unemployment 

The access to social protection in case of unemployment is simplified through the recognition of the beneficiary’s contribution records in other contributory schemes and through the reduction of the minimum number of days with contributions to Social Security necessary to access to unemployment subsidy.  

These changes are applicable to the different types of Social Security regimens, as follows: 

1.1 Dependent workers

The beneficiary’s contributions as self-employed worker will now be considered to fill the minimum days with contributions to Social Security necessary to have access to unemployment subsidy and social unemployment subsidy. 

1.2 Economically dependent self-employed workers

  • The concept of ’”economically dependent self-employed worker” is broadened: the dependence to an economic entity is reduced from 80% to 50% of the self-employed worker’s earnings in each calendar year. 
  • The legal requirements to have access to unemployment subsidy are lightened:  

          - The minimum period with contributions to Social Security necessary to have access to unemployment subsidy is reduced to 360 days in the 24 months preceding the involuntary termination of the service provision contract (until now such period was 720 days in the preceding 48 months).  

         - The self-employed worker has to have been considered economically dependent from a given entity in the previous calendar year preceding the termination of the providing services contract (until now, the self-employed worker had to have been considered economically dependent in the preceding two calendar years). 

         - The beneficiary’s contributions as dependent worker will now be considered to fill the minimum days with contributions to Social Security necessary to have access to unemployment subsidy.

  • The formula to calculate the daily amount of the unemployment subsidy is amended in accordance with the self-employed workers new contribution rules, ceasing to use contribution tiers as reference (the contribution tiers have been recently eliminated – view Commentary 1-2018, accessible here) and now uses the reference remuneration of the self-employed worker. 

1.3 Membership of corporate body and self-employed workers with business activities 

  • The legal requirements to have access to subsidy due to the termination of activity are lightened:  
  • The concept of “involuntary termination of activity due to the decrease of the yearly turnover” is broadened, as now it includes cases when the billing has reduced, at least, 40% in the two preceding years. 
  • The beneficiary’s contributions as dependent worker will now be considered to fill the minimum days with contributions to Social Security necessary to have access to unemployment subsidy. 

2. Illness (self-employed workers)

  • The illness subsidy for self-employed workers is payed after 10 days of illness, which constitutes a reduction as previously it was paid after 30 days of illness. 
  • The self-employed workers incapacity for work due to illness that last for more than 20 days will be inspected.

3. Parenthood (self-employed workers)

The parenthood social protection of self-employed workers is now equivalent to the parenthood social protection offered to dependent workers. As a result, self-employed workers will now have access to the followings subsidies:

  • Childcare assistance subsidy; 
  • Grandson assistance subsidy. 

4. Retroactive effects

This amendments have retroactive effects to July 1, 2018.