Social Security contribution  reforms to be phased in

A new Social Security reform law, ratified by President Cavaco Silva on Monday, will widen Portuguese national insurance contributions across the board.

Under the terms of the new law, designed to fill a multi-million euro black hole in the nation’s Social Security system, the new regime will see a reduction in Social Security discounts for companies and employers employing full time staff on indefinite contracts from 23.75 per cent to 22.75 per cent.

But for employers using staff on less secure fixed term contracts, Social Security contributions will increase from 23.75 per cent to 26.75 per cent.

When it comes to independent workers using Green Receipts (Recibos Verdes), all contributors will have to discount a fixed, as yet unspecified amount, from their Green Receipts for health and will no longer have the option of choosing a particular discount regime.

Help in the running costs and upkeep of own vehicles used in the service of a company will also be included in Social Security discounts making it dearer for companies who do not provide the use of company cars.

The new Código dos Regimes Contributivos da Segurança Social will come into effect in phases between 2010 and 2011.