Article

Decree-Law 220/2006 of 3 November, as amended, establishing the legal framework for unemployment protection of employees: * Article 1 (scope of protection); * Article 2 (characterisation of unemployment); * Article 6 (objectives of unemployment benefits); * Article 9 (definition of involuntary unemployment); * Articles 10 and 10-A (termination by mutual agreement qualifying as involuntary unemployment); * Articles 11-17 (capacity and availability for work, active job search, suitable employment, vocational training, socially necessary work, the Personal Employment Plan and personalised employment support); * Articles 18–24 (general eligibility conditions, registration with the employment service, qualifying contribution periods and the means test for social unemployment benefit); * Articles 28–31 (amounts and limits of unemployment benefit and social unemployment benefit); * Articles 34 and 34-A (full or partial lump-sum payment of unemployment benefit for the creation of the beneficiary’s own employment); * Articles 36–38 (commencement and duration of unemployment benefit and social unemployment benefit); * Article 41 (beneficiaries’ duties); * Articles 68–70 (responsibilities of the social security institutions and the public employment service). Labour Code (Law 7/2009 of 12 February), as amended, including by Law 13/2023 of 3 April: * Articles 343–345 (expiry of employment contracts, including fixed-term employment contracts); * Articles 359–366 (collective dismissal); * Articles 367–372 (dismissal following the elimination of the employee’s position); * Articles 373–380 (dismissal on grounds of unsuitability); * Articles 394–399 (termination of the employment contract by the employee with just cause).

Description

The Portuguese legal framework provides public income support for employees who become involuntarily unemployed. It combines temporary income replacement with active employment measures intended to support their return to work. The two principal forms of income support for fully unemployed employees covered by this measure are unemployment benefit (subsídio de desemprego) and social unemployment benefit (subsídio social de desemprego). In addition to periodic payments, unemployment benefit may be paid in full or in part as a lump sum where the beneficiary presents a project to create their own employment.

Unemployment benefit is granted to employees who are involuntarily unemployed, registered for employment with the public employment service and have completed at least 360 days of employment with registered earnings during the 24 months preceding unemployment. The benefit is initially calculated at 65% of the reference remuneration, based on earnings registered during the relevant reference period.

The general monthly minimum coresponds to one Social Support Index Indexante dos Apoios Sociais, unless the beneficiary’s net reference remuneration is lower. Where the earnings used to calculate the benefit are at least equal to the applicable statutory minimum monthly wage, the amount is increased to a minimum of 1.15 IAS, subject to the other statutory limits. The maximum is 2.5 IAS. The benefit is also generally limited to 75% of the beneficiary’s net reference remuneration and can never exceed that net remuneration. A 10% increase applies in certain family situations involving dependent children, including specified households in which both adults are unemployed and single-parent households. The basic period of entitlement ranges from 150 to 540 days, depending on the beneficiary’s age and contribution record, with additional periods for longer contributory careers.

Social unemployment benefit may be granted as an initial benefit where unemployment benefit is not payable, including where the 360-day qualifying period is not met, or as a subsequent benefit after unemployment benefit has been exhausted. The initial benefit generally requires at least 180 days of employment with registered earnings during the previous 12 months. This period is reduced to 120 days where unemployment results from the expiry of a fixed-term contract or from termination by the employer during the probationary period. Access under the special rule for termination during the probationary period is limited to once every two years, counted from the end of any social unemployment benefit previously awarded under that rule.

Entitlement to social unemployment benefit is subject to a means test. The equivalised monthly income of the household may not exceed 80% of the IAS. The monthly amount is 100% of the IAS for beneficiaries living with other household members and 80% of the IAS for beneficiaries living alone. Where either amount exceeds the applicable net reference remuneration, the benefit is reduced to the level of that remuneration. The benefit is also increased for each child in the household by a monthly amount corresponding to 10% of the applicable statutory minimum monthly wage.

The duration of initial social unemployment benefit follows the age and contribution-based periods applicable to unemployment benefit. Where social unemployment benefit is awarded after unemployment benefit has been exhausted, its duration is half of the applicable basic period for beneficiaries aged under 40. For beneficiaries aged 40 or over, it has the same duration as the unemployment benefit initially awarded.

Entitlement is generally restricted to involuntary unemployment. This includes termination at the employer’s initiative, expiry of an employment contract not resulting from the award of a pension, termination by the employee with just cause and qualifying termination agreements. Relevant situations include the expiry of fixed-term contracts, collective dismissal, dismissal following the elimination of the employee’s position, dismissal on grounds of unsuitability and termination by the employee with just cause.

Termination by mutual agreement qualifies as involuntary unemployment only in the cases specified by law. These include qualifying workforce-reduction processes linked to restructuring, viability, recovery or economic difficulty; certain agreements based on grounds that would permit collective dismissal or dismissal following the elimination of a position, subject to statutory quantitative limits; and agreements intended to strengthen the company’s qualifications and technical capacity without reducing employment levels. Ordinary voluntary resignation is generally excluded, although resignation by a worker with recognised domestic-violence victim status is expressly treated as involuntary unemployment.

The Social Security Institute, through its district social security centres, and the competent authorities in the autonomous regions manage the benefits, determine whether unemployment is involuntary and assess entitlement. Public Employment Service functions are exercised by the Institute for Employment and Vocational Training (Instituto do Emprego e Formação Profissional, IEFP) and by the competent regional authorities.

Following registration, the beneficiary and the relevant employment centre jointly prepare and sign a Personal Employment Plan. This sets out the actions required for reintegration, minimum active job-search requirements and the monitoring, evaluation and control measures to be undertaken by the employment centre. Personalised support includes guidance and individual follow-up, assisted job-search sessions, information on vacancies, training opportunities and employment programmes, and the development of employability skills. Vocational training is intended to strengthen employability and facilitate a rapid and sustainable return to work. Beneficiaries must actively seek employment, accept suitable employment, vocational training, socially necessary work and other appropriate active employment measures, and participate in monitoring and assessment activities.

Commentary

Decree-Law 166/2026 of 13 August provides that, from 31 December 2026, social unemployment benefit will be incorporated into the Single Social Benefit (prestação social única – PSU). Existing awards of social unemployment benefit will continue until the end of their respective award periods. The new PSU regime is subject to an impact evaluation within 24 months.

Additional metadata

Cost covered by

National government

Involved actors other than national government

Public employment service National government

Involvement (others)

None

Thresholds

Affected employees: No, applicable in all circumstances
Company size: No, applicable in all circumstances
Additional information: No minimum threshold applies. The measure may apply where a single employee becomes involuntarily unemployed, provided the unemployment conditions are met.

Sources

• Decree-Law 220/2006 of 3 November
• Labour Code (Law 7/2009 of 12 February) - Updated version
• Decree-Law 166/2026 of 13 August