Portugal | Max-Planck-Institut für Sozialrecht und Sozialpolitik - MPISOC

The Portuguese Old Age Security System in 2020

By João Carlos Loureiro, Institute for Legal Research (UCILeR) – Coimbra

Despite the important 1919 legal framework on mandatory social insurance pensions (which provided a theoretical basis that, however, only saw little implementation in practice), it was not until the military dictatorship and the New State (Estado Novo) that the legal bases of a new social protection system were laid down in Portugal. With the establishment of democracy, the Constitution of 1976 (CRP) set forth a right to social security (Art. 63), and established the right to economic security in old age (Art. 72/1). Since the beginning of the 21st century, and as a result of demographic change and financial constraints, different reforms have been implemented to ensure the financial sustainability of the Portuguese old age pension system. For example, a sustainability factor was introduced, with important implications for the benefit calculation; access to early retirement pension was restricted and penalties for early retirement were tightened; a voluntary capital-funded public pension scheme was created. In recent years, however, adjustments easing access to old age pensions for long contributory careers were made and a personal retirement age was introduced. Currently, ‘standard protection’ in old age is provided through pension benefits of the general public contributory social insurance system (Previdência) and a special public scheme for lawyers and solicitors which has been in operation for a long time. Public pension benefits can be ‘topped up’ by voluntary participation in the complementary system (sistema complementar) which comprehends public, occupational, and private1 pension schemes for which tax incentives are granted. A ‘minimum’ level of protection is guaranteed by various social assistance measures of the solidarity subsystem (subsistema de solidariedade), which is part of the citizenship social protection system (sistema de proteção social de cidadania)2.

Standard Protection in Old Age

The general social security scheme (regime geral de segurança social), as part of the contributory social security system (Previdência), is a mainly pay-as-you-go (PAYG)-financed public pension scheme managed by the ‘Institute of Social Security’ (Instituto de Segurança Social, I.P.)3. It covers the majority of the economically active Portuguese population, including employees, self-employed workers4, persons with activities considered equal to those of employees for the purposes of social security (such as members of statutory boards) and civil servants who entered the system from 2006 onwards. Persons not protected by mandatory insurance can join the contributory social security system on a voluntary basis (seguro social voluntário)5

In the past, several special social protection institutions (caixas de previdência) and schemes existed for specific occupational groups. These schemes have been gradually integrated into the general social security scheme6, in light of the constitutional requirement of building a unitary system of social security. Throughout this process, the convergent social protection scheme (regime de proteção social convergente) for civil servants managed by the Civil Servants’ Pension Agency (Caixa Geral de Aposentações,CGA) has been closed for new entries since 01 January 2006. As a result, new public sector employees are now part of the general social security scheme. Other schemes, such as the special social security scheme for agriculture (regime especial de segurança social das atividades agrícolas), have been closed. Notwithstanding, the retirement pension scheme for lawyers and solicitors from the Lawyers’ and Solicitors' Pension Fund (pensão de reforma da Caixa de Previdência dos Advogados e Solicitadores, CPAS) is  still in place.


Public pension benefits can be topped up by participating in fully funded public, occupational, and private pension schemes of the complementary system (sistema complementar). Participation is voluntary but fiscally incentivised by the state. Three different types exist: the public funded scheme (regime público de capitalização) is managed by a social security institution (Institute of Management of Capitalisation Funds of Social Security/Instituto de Gestão de Fundos de Capitalização da Segurança Social); the complementary schemes of collective initiative (regimes complementares de iniciativa coletiva), which include occupational pension plans that are often based on collective agreements, are usually financed by the employer only; the complementary schemes of individual initiative (regimes complementares de iniciativa individual) include personal pension plans, such as retirement savings plans.


A minimum level of protection is guaranteed through various tax-financed social assistance measures that fall within the subsystem of solidarity (subsistema de solidariedade). The social complement (complemento social) is a supplement to the earnings-related pension of the general social security scheme and guarantees a minimum pension level (dependent on the number of contributory years) for persons with low contributory old age pensions. With this measure, the subsystem builds the bridge to the contributory social security system (Previdência). For elderly persons who do not qualify for any contributory old age pension7 or who are entitled to contributory survivors’/old age pensions lower than the amount of social pension, the subsystem contains the so-called social old age pension (pensão social de velhice), which is a tax-financed, non-contributory, and means-tested pension scheme. People who receive a social old age pension also qualify (automatically) for the extraordinary solidarity supplement (complemento extraordinário de solidariedade, CES), which is a small supplement granted on top of the social old age pension. Additionally, recipients of an old age pension (incl. the social pension) may also be eligible for a tax-financed solidarity supplement for the elderly (complemento solidário para idosos, CSI). This benefit is strictly means-tested, also taking into account the income of children, and requires persons to have resided in Portugal for the six consecutive years before claiming the benefit. Recently, a new supplementary benefit has been created, the extraordinary supplement for pensions of minimums8  (complemento extraordinário para pensões de mínimos), which is provided to persons with pensions equal to or less than 1.5 times the Social Support Index (Indexante de Apoios Sociais, IAS) for pensions awarded as of 2017 and later9.


1 Mutualist associations (associações mutualistas) that are part of the social sector also play a role in the complementary system, both in the schemes of collective and individual initiative.

2 Framework Law on Social Security (Lei de Bases da Segurança Social – Law No. 4/2007, 16 January, as amended by Law No. 83-A/2013, 30 December).

3 Although Portugal is a unitary state, there are two autonomous regions: the Azores and Madeira Archipelagos. This has implications for the organisation of social security. Putting aside some regional particularities, the benefits are managed in the two regions, respectively, by the Azores Institute of Social Security (Instituto de Segurança Social dos Açores, IPRA), and the Madeira Institute of Social Security (Instituto de Segurança Social da Madeira, IP-RAM).

4 In accordance with the Framework Law on Social Security (Article 53), which lays down a ‘general social security scheme applicable to the generality of employees and self-employed workers´, and with Decree-Law No. 187/2007, 10 May, which is the main statute regulating old age contributory pensions, self-employed workers are part of the general statutory scheme. Another perspective could be taken, as other statutes mention a ‘self-employed workers’ scheme’: e.g. the Contributive Code, which privileges the contributory particularities and treats separately (as a scheme) the special norms regarding the self-employed.

5 Voluntary social insurance will be addressed in connection with the general social security scheme as – despite differences in some aspects (e.g. coverage and contribution rates) – the material legal framework is basically the same (e.g. benefits).

6 The integration process, in order to safeguard acquired rights, has led to the survival of special social security schemes for some categories of workers.

7 Persons who receive an old age pension of the general social security scheme cannot qualify for a social old age pension, as old age pension benefits of the general social security scheme cannot fall below the social old age pension level due to the social complement. However, survivors’ pensions (incl. those of the general social security scheme) and contributory old age pensions of one of special schemes (i.e. schemes which are no longer open to new entrants in 2020) can be lower than the social old age pension level. In this case, entitlement to social old age pension is possible if the sum of the social old age pension plus the amount of the other public pension does not exceed the minimum pension level of the general social security scheme (EUR 275.30 in 2020). In these cases, the so-called social replacement pension (pensão social de substituição) is paid out.

8 These pensions of minimums should not be confused with the minimal amounts of pensions, often called ‘minimum pensions’ (pensões mínimas).

9 In 2017 (for pensions awarded until the end of 2016) and 2018 (for pensions awarded until the end of 2017), there was an extraordinary update of pensions with the aim to offset losses incurred in the context of the financial crisis. Thereby, a differentiation was generated between the new recipients (with pensions of minimums awarded as of 2017, and recipients having not or only partially benefited from these extraordinary increases) and the other pensioners, which led to the creation of this new supplement.

Full Report:
Schneider S. M., Petrova T., Becker U. (eds.), Pension Maps: Visualising the Institutional Structure of Old Age Security in Europe and Beyond, 2nd ed., Munich: MPISOC, 2021.

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