The Portuguese Social Security Institute (ISS) made adjustments to the pensions of more than 300,000 retirees in April and May, which for almost half was reflected in a decrease in the amount to be received. But emigrants with pensions from Portugal are not affected by this cut, Contacto learned from the Government of Montenegro.
The adjustment in question is related to the withholding tax table, which only applies to “pension income received by holders residing on the continent”, explained the Ministry of Labour, Solidarity and Social Security. Therefore, emigrants living abroad are not affected and will receive the same amount in May.
The case was made public at the beginning of the week by Jornal de Negócios, which was contacted by several pensioners. After consulting the retirement receipt for May, they realized that they would receive a lower net pension amount, but they did not find an explanation for this in the document.
The diary consulted some pension receipts and gave examples of reductions in net pensions. For a gross pension of just over 2,500 euros, the net amount to be received in May will be 12 euros less than in February, March and April.
For a pension of almost 1,300 euros gross, the value in May will be 4 euros lower than what was received in the previous three months.
After the news was published, and the controversy ensued, the ISS came to clarify the reasons for this change in April and May pensions.
The reasons for the hits
The adjustments to IRS withholding in these two months occur to correct “IRS withholdings made in the month of January 2024”.
In the first month of the year, “a provisional IRS table was used with slight differences compared to the IRS retention table for 2024 that was only published at the end of December”, explains the ISS statement, noting that from February the table currently in force began to be applied.
Therefore, it was necessary to make adjustments: return excess IRS withheld to 184,000 pensioners (which was done with the April pension) and charge the under-withheld amount to 143,800 pensioners — carried out with the May pensions and which resulted in a lower net value for these people.
Government blames Costa’s executive
The current Government says it is “stunned” by this pension arrangement, highlighting that this was the result of political guidance from António Costa’s previous executive.
This situation results from, in January 2024, it being decided to “give an artificial idea of an increase to pensioners with less IRS withholding and then make this adjustment, after the elections, in the transition period”, writes the Ministry of Work, Solidarity and Social Security, in a statement released this Tuesday.
