New rules for family credits

Download article in original language : PT9704115NPT.DOC

The Standing Committee for Social Dialogue (the Economic and Social Council's tripartite committee) has approved new rules relating to family credits in Portugal.

The Government has announced that it will soon issue a Decree-Law to reformulate the rules governing family credits. Draft legislation submitted to the social partners for discussion and analysis on the Standing Committee for Social Dialogue has been met overall with a favourable response. However, the General Confederation of Portuguese Workers (CGTP) has expressed its disagreement over certain changes, considering them less favourable than those in force under the terms of current legislation.

Basically, current Portuguese legislation grants the following family credits: marriage grant; monthly family allowance for workers' children covered by the general social security system or by the public sector social protection system; birth grant; newborn child allowance; funeral benefit; special credits for workers' children with physical, mental or psychological injuries; and also special credits for permanent assistance for disabled people who cannot work.

The main changes to be introduced are as follows:

  • a new allowance will be created called the "family allowance for children and young persons";
  • this new allowance will replace the former family allowances, the birth grant and the newborn child allowance;
  • the marriage grant is also abolished, but in the context of the new "family allowance for children and young people;".
  • slight changes are made to the system of disability credits;
  • the new "family allowance for children and young persons", in contrast to what was established until now, will introduce a range of credits related to three varying levels of income (first level - incomes in a ratio equal to or less than 1:1.5 of the National Guaranteed Minimum Wage; second level - incomes in a ratio of between 1:1.5 and 1:8 ; third level - incomes over 1:8). In this way, those on the lowest incomes will receive the highest payments (this is the principal innovation contained in the legislation). However, this means-testing will not be used for any other type of social benefit; and
  • for workers to claim the right to benefit, the new legislation has increased eligibility requirements (at least six months' paid employment, whether continuous or not). It also states that family credits may be permanent (such as monthly lifelong benefit, assistance benefit or funeral benefit) or variable (the other payments). The actual sums payable will be subsequently determined by Government Decree.
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