New containment: measures to support the economy and employment

The Minister of State, Economy and Digital Transition, Pedro Siza Vieira, in a press conference, said that in the working meetings with the business associations, "what we were most asked to do was to implement as soon as possible the new supports and those approved a month ago for the first quarter of 2021, and that is what we will do".

Simplified layoff

Thus, all companies which activity is closed have immediate access to the simplified layoff scheme, which is reinforced.

For each worker in a simplified layoff, either with reduced working hours or suspended contract, the employer pays 19% of the salary and is exempt from a single social tax. This scheme is in place for as long as the restriction is maintained and allows companies in the phase-in support scheme to switch immediately to the simplified layoff. 

The possibility of reducing working hours for companies with billing losses of more than 100% and reducing the single social tax by 50% for micro, small and medium-sized companies is maintained.

Income support

Dependent workers earning up to 3 minimum wages receive 100% of their wages. For the self-employed, support for activity reduction, which supported 182 thousand in 2020, has been reactivated to include those who are exempt from contributions. 

For managing partners, activity reduction support was reactivated, as it had covered 60 thousand in 2020, without prejudice to access to phase-in support.

Informal and domestic service workers also have access to extra income support for workers.

The government has ordered the suspension of tax execution proceedings under way or in the process of being initiated by the Social Security and Tax Authority, and, until 31 March, there will be no attachment, and the payment of instalment plans for debts to the Social Security will also be suspended.

The state-guaranteed credit line for the sectors most affected by the pandemic mitigation measures, worth 400 million euros, has been reopened, and the banking system will make the credit line available as of 18 January for exporting companies and event companies, which are characterized by the possibility of converting 20% of the credit amount into a non-repayable grant, by maintaining jobs.

Apoiar (Support) Programme

The Apoiar programme, launched in October 2020, which provides grants to the sectors most affected by pandemic mitigation measures, is expanded.

All companies that had a turnover drop of more than 25% in 2020 compared to the previous year have access to this programme, on condition that jobs are maintained and profits are not distributed. Companies that have been closed by legal order since the beginning of the pandemic, such as nightclubs, maintain a surcharge.

The government has decided to advance the payment of the second tranche of support, increase the amounts by increasing the limits per company, and extend the compensation for the falls in invoicing in the 4th quarter of 2020, and pay extraordinary support to compensate for fixed non-wage costs during the period of confinement. 

Applications for this new format open next week and payments will start immediately.

The Apoiar programme compensated for the loss of invoicing in the first 3 quarters of 2020 compared to the first 3 quarters of 2019 by paying 20% of that loss of invoicing, with limits according to the size of the company. The new model extends and strengthens this support by compensating for the turnover losses in the 4th quarter and supporting, in anticipation of the 1st quarter 2021, the equivalent of the 4th quarter 2020. 

Paying support quickly

The measures are slightly different for micro and small enterprises and for medium-sized enterprises.
 
For individual entrepreneurs with simplified accounting, applications will be opened on 28 January for a non-repayable grant of 5 thousand euros, still under the Apoiar programme.

Support for the payment of commercial rents for entrepreneurs and companies with a turnover of less than 50 million euros will open on 4 February, and will be a non-repayable support corresponding to 30% or 50% of each company's monthly income, depending on the rent value and the breakdown in invoicing.  
 
Other decisions

The Minister also announced other decisions with an impact on economic activity, highlighting the limitation of the value that home delivery platforms can charge to restaurants to 20% of the price of the meal.

He also said that the limitation on the sale in super or hypermarkets of products which are sold in shops which have been closed is being regulated.

Siza Vieira stressed that "the fundamental orientation of the government's economic policy remains. Normalisation of the economy will occur when the health situation is normalised. Until this normalisation, we must continue to provide sufficient support to mitigate the impact of the pandemic, so that companies can preserve their productive capacity and protect jobs".

Source: Portal do Governo