The Prime Minister, António Costa, announced exceptional support measures to support families who are being affected by the cost-of-living crisis due to the effects of inflation.

The announcement was made on Monday evening, 5 September, at the Palácio Nacional da Ajuda, in Lisbon, after the extraordinary meeting of the Council of Ministers, and includes a 2,4 billion package. The measures include energy, household benefits, pensions, public transport and rents.

Energy

The reduction of VAT on electricity supply from the current 13 percent to 6 percent, a measure in force until the December 2023 was one of the measures announced. A long with the increase in carbon tax which will be suspended until the end of the year.

The Government announced that the reduction of the taxes on petrol products (ISP) will be extended until the end of the year. These measures have a direct impact of a 16-euro reduction on a tank of diesel and 14 euros on a tank of petrol (50-litre tank), at the price charged this week.

According to a note published on the official website of the Presidency of the Republic, the Head of State approved the Government's decree allowing the return of gas for consumers with an annual consumption of less than or equal to 10,000 m3 to the regulated tariff regime.

Household Benefit

Additionally, the government has given a payment of 125 euros to each citizen with an income of up to 2,700 euros per month, which applies to all those who declared income of up to 37,800 euros in the year 2021. As for families with children, regardless of income, they will receive an extraordinary payment of 50 euros for each dependent child up to the age of 24.

More than half of the Portuguese (5.8 million people) will receive 125 euros in October, according to the Finance Minister with the aim to return income to taxpayers, which will cost the State around 725 million euros.

The amount of 125 euros to be paid by the State will not be subject to taxation, so this same amount will be what will fall into the taxpayers' account. The guarantee was given by Fernando Medina, who explained that the support will not be subject to IRS.

Although the Minister assures that there are exceptional cases. For example, young people who started working in 2022 do not receive a benefit. In that case, clarified Fernando Medina, the 125 euros will not be paid, and instead will be given to the support of 50 euros to the parents of the now worker who last year was considered dependent child.

In order to receive this support, Portuguese taxpayers should pay attention to the International Bank Identification Numbers (IBAN) that are associated in the Segurança Social and Finanças websites, and update them if they are not correct as this is an automated payment.

Pensions

Pensioners have not been left out in which they will receive 14 and a half months of pensions, instead of the usual 14 months, with the extra half pension paid in October. It is important to note that this applies to people receiving up to 5318 euros, who represent 99.9 percent of pensioners.

In addition, pensions will increase, in 2023, by 4.43 percent for pensions up to 886 euros and by 4.07 percent for pensions between 886 and 2,659 euros and by 3.53 percent for other pensions.

Public transport

There will also be a price freeze on public transport passes and CP tickets throughout 2023. The impact that this measure will have on public transport companies will be compensated, according to the Prime Minister.

Rent cap

Regarding rents, in 2023 landlords cannot increase housing and commercial rents more than 2 percent instead of the original 5.43 percent that would have been fixed according current inflation.

Author

Paula Martins is a fully qualified journalist, who finds writing a means of self-expression. She studied Journalism and Communication at University of Coimbra and recently Law in the Algarve. Press card: 8252

Paula Martins