Measures to support workers and businesses – major changes

On Wednesday, Decree-Law No. 23-A/2021 was published, which introduced important changes to support for workers and companies most affected by the current health crisis.

We present below the main changes that come into force today:

Extraordinary support for the progressive resumption of activity

• This support is extended until 30/09/2021, instead of 30/06/2021;
• The worker is entitled to monthly retaxing compensation corresponding to unworked hours, in the amount of 4/5 of the normal iliquid remuneration;
• Monthly retaxing compensation may not exceed 1995€ (3xRMMG);
• This measure already provided for a reduction in payment of 50% of contributions to micro, small and medium-sized enterprises on retaxing compensation due for unworked hours;
• Employers in the tourism and culture sectors now have a specific framework with regard to the exemption or reduction of the payment of contributions to their charge due to the drop in invoicing in March, April and May 2021, in the following terms:
  • Fall below 75%, confers the right to exemption from charges for workers covered by the measure, calculated on the value of the retaxing compensation;
  • Decrease equal to or greater than 75%, confers the right to a reduction of 50% in the payment of contributions to its responsibility in relation to workers covered by the measure, calculated on the value of the retaxing compensation, while maintaining the right to support corresponding to 100% of the retaxing compensation;
  • It is to be defined the Portuguese Classification of Economic Activities of the entities covered by the tourism and culture sectors.

Cumulative vocational training with extraordinary support for the progressive resumption of activity

• Training plans approved by the Institute of Employment and Vocational Training which have not begun by suspension of face-to-face training activities should start five working days after the end of the suspension of training activities, even if companies are no longer covered by extraordinary support for the gradual resumption of activity;
• By granting extraordinary support for the progressive recovery by social security, the employer is entitled to an advance payment of 85 % of the value of the approved training grant.

Extraordinary support for the maintenance of employment contracts in a situation of business crisis, “simplified lay-off”

• Entities which have not been obliged to close or suspend their activity but which are at full or partial stop of their business of the company or establishment exceeding 40 %, the month preceding the application to be made in March and April 2021, may access this support when:
  • have been significantly affected by the disruption of global supply chains and will be able to access this support again, provided that they have documents demonstrating the cancellation of orders or reservations, from which it is apparent that the use of the company or unit affected will be reduced by more than 40% of their production or occupancy capacity in the month following that of the request for support;
  • They have recorded the suspension or cancellation of orders, in situations where more than half of the billing in the previous year was carried out to activities or sectors that are currently suspended or terminated by legislative or administrative determination of a government source.
• The managing partners paid with workers in their charge are now eligible.

Simplified support for micro-enterprises

• The number of eligible workers is now measured in relation to the month prior to the submission of the application instead of the month of submission;
• Only the employer who, in the first quarter of 2021, did not benefit from the extraordinary support for the maintenance of a simplified lay-off or the extraordinary support for the gradual resumption of planned activity may benefit from this support;
• The maintenance of the level of employment shall be required during the period of granting the support, as well as for the following 90 days, instead of the 60 days;
• This support is guaranteed during the 3rd quarter of 2021, and additional support is expected in this period in the amount equivalent to a guaranteed minimum monthly remuneration (665€);
• This support lacks regulation.

Extraordinary support for the reduction of the economic activity of workers

• This support is reactivated in relation to tourism, culture, event and show workers, whose activity, not suspended or closed, is still in a proven situation;
• It is in force until 30/06/2021.

Extraordinary new incentive to normalize business activity

• Entities which, during the first quarter of 2021, have benefited from extraordinary support for the maintenance of the employment contract or extraordinary support for the gradual resumption of activity are eligible;
• The incentive referred to in the preceding paragraph shall be granted, per worker covered by the support, in the following terms:
  • When requested until May 31, 2021, it has twice the RMMG (1,330€) and is paid in a phased manner over six months;
  • When requested on a later date and until August 31, 2021, it has the value of an RMMG (665€), paid at once, corresponding to the period of three months.
• The number of workers is measured by reference to the month prior to the submission of the application, with a limit on the number of workers covered by the support in the last month of its application;
• In addition, the partial exemption of 50 % of the payment of social security contributions by the employer, with reference to the workers concerned, during the first two months of the support;
• The employer may withdraw from this support at the end of 3 months to subsequently apply for support for the progressive recovery, without the need to return the amounts already received, but are limited to receiving an incentive of up to 1 RMMG (635€) per worker covered and the reduction of 50% of social security charges during the first 2 months.

How can Moneris help?

Our Crisis Management team, in addition to the support of your usual Moneris manager, is available to analyze with you the measures in force, ensuring a holistic performance in the areas of taxation, labor, financial, technological and support and incentives, with the commitment to ensure the best solutions, adapted to the context of each sector and each company.

It remains essential to continuously evaluate the state of the art, plan and adapt the activity in the short and medium term, resort to extraordinary incentives and measures, adjust business plans, treasury plans, business plans and restructure the company’s strategy.

To learn more about these changes and to apply for these supports, please contact us: gestaodecrise@moneris.pt.