Exceptional instalment payment scheme of Social Security contribution debts

The State Budget Law for 2021 – Law 75-B/2020, of December 31 – approved an exceptional payment system in instalments for Social Security debts.

On April 7, 2021, Ordinance 80/2021 was published, which establishes the conditions for access to the aforementioned exceptional debt settlement regime and procedures for applying. This Ordinance came into force on April 8, 2021.

Debts covered and access conditions

This regime covers contribution debts, whose legal payment period ends on December 31, 2021:

• Companies – Employing entities and contracting entities
• Independent workers

The following are excluded from this regime: (i) Debts of contributions that are included in insolvency proceedings, special procedures for settlement of payments; extraordinary business viability processes; extrajudicial business recovery regime; financial consolidation or corporate restructuring contracts; and, also, in contracts for the acquisition, in whole or in part, of the capital of a company, by the technical staff or workers, whose purpose is its revitalisation and modernisation; (ii) Debts that are under tax foreclosure or are being settled by one of the mechanisms mentioned above.

In order to benefit from this special instalment payment regime, the agreement must cover the entire debt of contributions, including debt of contributions resulting from the calculation as a contracting entity and of arrears interest.

This exceptional regime is accessed through an application made electronically, at the Social Security Direct. The analysis and decision on the application are operated automatically, and there may be subsequent adaptations of payment in instalments in the event of a change in the values relating to the total calculation of the debt. The lack of a decision within 30 days determines the tacit approval of the application.

Payment in instalments
The payment of the debt can be authorised up to a maximum of six monthly instalments. This term can be extended up to 12 months when the value of the debt covered by the agreement is greater than:

• €3,060.00 for individuals
• €15,300.00 for legal persons

Payment instalments are due monthly from the notification of the plan, and payment must be made until the last day of the month to which it relates.
The amount paid under this regime will be imputed to the oldest debt and the respective interest, starting with the debt of contributions and then the interest due.

Important notes:
– Contributory situation regularised – after the payment of the first instalment and while the payment of the agreed instalments is being fulfilled, the contributory situation is considered regularised.

– The conclusion of payment agreements in instalments under this regime does not require the provision of any guarantees.

By Dr. Eduardo Serra Jorge
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Dr. Eduardo Serra Jorge is founding member, senior partner and CEO of lawyers firm Eduardo Serra Jorge & Maria José Garcia – Sociedade de Advogados, R.L., created in 1987.
In his column, he addresses legal issues affecting foreign residents in Portugal.
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