Extraordinary Income Support for Workers
The economic and social crisis triggered by the COVID-19 pandemic has clearly highlighted the weaknesses of the current social protection system, in particular the protection of unemployment and precarious employment. The high proportion of unemployed people who, as a whole, are not covered by unemployment benefit and the very limited access to unemployment benefits aimed at supporting the self-employed attest to this. "Secondary employment protection" in Portugal had clear weaknesses before the pandemic hit. The pandemic has exacerbated them.
In order to address some of the limitations of social protection mechanisms since the beginning of the pandemic, the government has adopted, on the one hand, a set of direct and indirect support measures to maintain the level of employment, on the other hand, it has extended the duration of unemployment benefits and also approved extraordinary measures to compensate for the reduction in income from work. With regard to this second set of measures - those that directly concern the policy under analysis in this text - the fundamental aim was to ensure that the Social Security system's coverage was extended to unprotected groups or to mitigate the risk of unprotection.
As mentioned, this goal was achieved as early as March 2020 through the automatic extension of unemployment benefits until the end of 2020 and the introduction of extraordinary benefits to support loss of income for self-employed workers and members of companies' statutory bodies. The employment protection system, calibrated above all to deal with the risk of unemployment in subordinate work with a record of sufficient contributions, had to be extended to also respond to the risk of total or partial loss of income for other categories of workers. In order to accommodate very different socio-occupational realities, in an extraordinarily demanding context from the point of view of the need for economic support, various ad-hoc schemes were introduced to protect against the loss of employment and income, which are autonomous from each other. The introduction, as of January 1, 2021, of extraordinary income support for workers aims precisely to give a common framework to exceptional support measures for the unemployed and loss of income, which until then had been scattered.
In this text, we will describe the system and rules of the new support, simulate the amount of this benefit taking into account the applicant's family and socio-occupational profile, but also reflect on the "new" support.
Authors: Luís Manso, Frederico Cantante, Pedro Adão e Silva, Catarina Mendes Cruz, Jena Santi, Carlos Simões, Renato Miguel do Carmo.
