Law No. 39/2013. D.R. (Portuguese official gazette) No. 118, Series I of 2013-06-21 Parliament

Governing the repayment in, 2013, of the holiday allowance for public employees, retirees and other pensioners.

The above mentioned law governs, primarily, the repayment of the holiday allowance of employees in public sector, setting out that the value of the holiday allowance repayable is determined based on the remuneration relevant for that purpose, after the remuneration reduction provided for in article 27 of Law No. 66-B/2012, of 31 December, which approved the 2013 State Budget.

For the purposes of this Law, the holiday allowance corresponds to all sums that, regardless of their formal designation, are directly or indirectly related to the holiday allowance, in particular under the form of additional monthly remuneration, that is, the so called duodécimos. Moreover, in accordance with this Law, the arrangements of repayment of the holiday allowance also apply to service agreements, in the form of retainer, with monthly payments throughout the year plus two additional payments of the same amount.

With regard to the form of payment of the holiday allowance, a distinction is made depending on whether the base monthly remuneration is less than € 600.00, between € 600.00 and € 1.100,00, or more than € 1,100.00. In the first case, the holiday allowance or any equivalent benefit that may be due, must be paid in full in June 2013; in the second case, part of the amount (1320 - 1,2 x base monthly pay) is paid in June 2013, with the remainder being paid in November 2013 and, in the last case, the entire amount due is paid in November.

On the other hand, the Law sets out the rules relating to the payment of the 14th month or equivalent benefits for retirees and other pensioners of Caixa Geral de Aposentações, I.P., as well as for staff in reserve or similar situation and staff released from service and waiting to retire or obtain a pension.

It should be mentioned that the provisions relating to the repayment of the 14th month or equivalent benefits do not apply to pensions automatically updated by indexation to the remuneration of active employees neither to those who cease their functions for retirement purposes that year.

With regard to this matter, the Law sets out that the amount of the 14th month or equivalent benefits payable shall correspond to the pension payable in July 2013.

However, it should be emphasised that the amount of the 14th month or similar sums is reduced by the amount of the extraordinary solidarity contribution, subject to a percentage rate applicable to a pension of the same amount of the said monthly sum or allowance.

With regard to the form of payment, and as provided for in respect of the payment of the holiday allowance, the legislator makes a clear distinction depending on whether the monthly pension is less than € 600.00, between € 600.00 and € 1,100.00, or more than € 1,100.00. In the first case, the 14th month or equivalent benefits is paid in whole in July 2013, in the second case part of the amount is paid in July and the remainder in November 2013 and, in the last case, 10% of the amount is paid in July and 90% in November.

In addition to the above, this Law also regulates the form of payment of the additional amount of disability, old age and survivor’s pensions, granted by the social security system, in respect of July, making a distinction depending on whether the monthly pension is less than € 600,00, between € 600.00 and € 1,100.00, or more than € 1,100.00. in the first case, the additional amount shall be paid in full in July, in the second case, part of the amount (1188 - 0,98 x monthly pension) is paid in July and the rest in December, and, in the last case, 10% of the amount is paid in July and 90% in December.