Creates The Index Of Social Support And New Rules For The Updating Of Pensions And Other Social Benefits Of The Social Security System

Original Language Title: Cria o indexante dos apoios sociais e novas regras de actualização das pensões e outras prestações sociais do sistema de segurança social

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Read the untranslated law here: http://app.parlamento.pt/webutils/docs/doc.pdf?path=6148523063446f764c3246795a5868774d546f334e7a67774c336470626d6c7561574e7059585270646d467a4c316776644756346447397a4c334277624445774d6931594c6d527659773d3d&fich=ppl102-X.doc&Inline=false

1 PROPOSAL of law No. 102/X explanatory memorandum in the 17TH Constitutional Government program was undertaken, with a view to improving the functioning of the labour market, the need for the minimum monthly wage fails to be the determinant of the fastening frame, calculating and updating the State social support, as well as any other expenditure and revenue for this held or charged , thus allowing this fulfill your role of regulation of labour relations. This change was, however, already the subject of negotiation and agreement between the Government and the social partners, in the Permanent Committee of Social dialogue within the framework of the discussion there completed around the Social security reform. Therefore, it is important to replace the minimum monthly wage (or, in certain cases, through it, the social pension social security solidarity scheme) with a new index, calculating and updating those expenditure and revenue, with definition rules and autonomous and update previously determined. This Bill provides for the creation of the Index so the social support (IAS), whose initial value will be based on the value of the minimum monthly wage in force in the year 2006, updated by the consumer price index (CPI) without housing, corresponding to the average variation of the last twelve months, available at the date of 30 November 2006 adjusted on the basis of the real growth of gross domestic product for the year ended in the third quarter of 2006. It is important to point out that the IAS takes now for initial reference the value of the gross monthly minimum wage, so the percentages fixed indexing (in particular, in Annex, title indicative, for major social benefits) does not entail any diminution of its value. In addition, define what the objective indicators which will future annual update of IAS, namely: the real growth of gross domestic product (GDP) and the average of the last 12-month variation in the consumer price index (CPI), without housing, available on 30 November of the year preceding that reports to update. 2 Simultaneously, this proposal of law results the establishment of new, objective and clear rules, updating of pensions and other benefits under the social security system, given the obvious connection to your precisely. The definition of this table update objective, avoiding arbitrariness, will reference the consumer price index (known and not estimated) and the variations on this benchmark be established, according to the recent evolution of variables determining Social Security revenues, namely the evolution of the Portuguese economy. The rules to be established should take into account the impact on your sustainability of the social security system, but, still, ensure the replacement and even gain purchasing power to medium and low pensions. For higher pensions, maintenance of purchasing power must be guaranteed when you establish favourable conditions from the point of view of economic growth. Are still the principles enshrined in the current legislation, such as the exceptional rules update on some pension schemes, as well as the updating of pensions not rule in the year of your award. The new rule now update proposal should therefore pass to take effect from 1 January each year, in line with the annual wage increase and with a view to harmonization with the budgetary cycle. This mechanism must in any case be reassessed every five years, depending on your fitness to goals (protecting the purchasing power of pensions and financial sustainability of social security).

Giving still achieving the projected in the programme and agreed with the social partners, effective, now, too, the principle of nominal high pensions freeze, i.e. exceeding the value of IAS 12. Thus, if you are looking to make a contribution to the moralizing of the system and ensure the implementation of social justice. However, and in compliance with the principle of contributividade, ensures that this limit does not apply to pensions where the calculation made according to the new rules adopted by Decree-Law No. 35/2002, 19 February (which considered the whole contributory career), resulting in higher value to that limit. Whereas, finally, that the updates of pensions, in accordance with the procedure laid down in the proposal, will produce its effects from the date of 1 January each year, and given that even here the pensions have been subject to update in December, in the first year of application of this diploma. Hence predict, 3 at the time of the first update in the framework of the law, that is, in January 2008, the update due to the application of the rules laid down here now is plus an extraordinary increase, equivalent to 2/14 of the normal pension increase.

So: under d) of paragraph 1 of article 197 of the Constitution, the Government presents to the Assembly of the Republic the following Bill: chapter I objective and scope Article 1 subject-matter this law establishes the Social support Index (IAS) fixing the rules of your update and pensions and other benefits granted by the social security system.

Article 2 Scope 1-IAS constitutes the reference determinant of attachment, calculation and update of support and other expenses and revenues the State's Central Administration, the autonomous regions and Local authorities, whatever your nature provided for in legislation or regulations. 2-For the purposes of paragraph 1, within the support granted and the revenue collected to natural or legal persons of private and public entities of nature. 3-the provisions of paragraph 1 shall not preclude the existence of other indexing rules, in relation to acts of concession of aid and other expenditure or revenue collection of the autonomous regions and local authorities arising out of their own powers.

4 CHAPTER II Amount and IAS update article 3 the Amount value of IAS for the year 2007 shall be fixed by order of the members of the Government responsible for the areas of finance and of labour and Social solidarity, based on the value of the minimum monthly wage in force in the year 2006, updated by the consumer price index (CPI) without housing , corresponding to the average variation of the last twelve months, available on 30 November 2006.

Article 4 the reference Indicators of IAS 1-update the value of the IAS is updated annually with effect from 1 January each year, taking into account the following indicators: a) the real growth of gross domestic product (GDP), corresponding to the average of the average annual growth rate of the last two years, finished in the third quarter of the preceding year reports the update or in the immediately preceding quarter If that is not available on the date of 10 December; (b)) the variation average of the last 12 months in the consumer price index (CPI), without housing, available on 30 November of the year preceding that reports to update. 2-for the purposes of this Act, the annual change of GDP is that between the fourth quarter of a year and the third quarter of the following year.

Article 5 of IAS 1-Update the updating referred to in the preceding paragraph is carried out in the following terms: 5 a) If the average real GDP growth is equal to or greater than 3%, the IAS update corresponds to plus 20% of IPC real growth rate of GDP; b) If the average real GDP growth is equal to or greater than 2% but less than 3%, the IAS update corresponds to 20% plus CPI rate of real GDP growth, with the minimum of 0.5 percentage points above the value of the IPC; c) If the average real GDP growth is less than 2%, the IAS update corresponds to the IPC. 2-update rates resulting from previous numbers are rounded to the first decimal place. 3-the annual update of the IAS consists of joint Government Ordinance responsible for the areas of finance and of labour and Social solidarity.

CHAPTER III updating of pensions and other social security benefits article 6 pensions Update


1-the value of pensions granted by the social security system is updated annually with effect from 1 January each year, taking into account the indicators referred to in article 4 2-pensions equal to or less than one and a half times the value of the IAS are updated according to the rule laid down in paragraph 1 of article 5 3-pensions of value between one and a half times and six times the value of the IAS, are updated according to the following rule: a) If the average real GDP growth is equal to or greater than 3%, the update matches the CPI increased by 12.5% of the real GDP growth rate; b) If the average real GDP growth is equal to or greater than 2% but less than 3%, the update matches the IPC; c) If the average real GDP growth is less than 2% the update matches the CPI less 0.5 percentage points. 6 4-pensions worth more than six times the value of the IAS, are updated according to the following rule: a) If the average real GDP growth is equal to or greater than 3%, the update matches the IPC; b) If the average real GDP growth is equal to or greater than 2% but less than 3%, the update matches the CPI less 0.25 percentage points; c) If the average real GDP growth is less than 2% the update matches the CPI less 0.75 percentage points. 5-the increase of pensions referred to in paragraphs 3 and 4 shall not be less than the maximum update resulting from the rules laid down in paragraphs 2 and 3, respectively. 6-are updated pensions which at the date of effect of the annual increase referred to in paragraph 1, have been initiated for more than a year. 7-update rules laid down in the preceding paragraphs shall not apply to pensions of beneficiaries of the social security of employees of Banco de Angola, extinct by Decree-Law No. 288/95, of 30 October, to beneficiaries covered by the special regulations of social security of railway workers and staff of the public transport service of the port, except as regards the minimum indexed pension to the IAS. 8-The pensions of the general social security system are updated by applying the respective percentages for calculating the amount of the invalidity and old-age pension that will serve as a basis. 9-annual updating of pensions consists of the members of the Government Ordinance responsible for the areas of finance and of labour and Social solidarity.

Article 7 fixing the value of the minimum payments of pensions and other social benefits is indexed to the IAS according to the coefficients set out in the annex to this law which is an integral part.

CHAPTER IV Supplementary Provisions, transitional and final provisions Article 7 8 replacement of the 1-index With the entry into force of this law would replace the minimum monthly wage while the benchmark referred to in paragraph 1 of article 2 2-IAS replaces the social pension while mounting frame, calculating and updating of social benefits, where applicable.

Article 9 reference indicator for the year 2008 Transiently in the year 2008, real GDP growth,) (a) of paragraph 1 of article 4, corresponds only to verified in the year ended in the third quarter of the preceding year reports to update.

Article 10 Limit the updating of pensions pensions awarded under the provisions of Decree-Law No. 329/93 of 25 September) (a) of paragraph 1 of article 13 of Decree-Law No. 35/2002, 19 February, whose value exceeds 12 times the value of the IAS, are not updated until your value to be exceeded by this limit.

Article 11 extraordinary increase of pensions 1-To make up for the postponement of pension update in January 2008, the update due to the application of the rules laid down in this law shall be increased of an extraordinary increase equivalent to 2/14 of the normal pension increase. 2-the new indexing of pensions, resulting from the extraordinary increase established in the preceding paragraph, is defined by ministerial order of members of the Government responsible for the areas of finance and of labour and Social solidarity, published until 31 December 2007. 8 article 12 review of pensions update criteria 1-the criteria that determine the methodology for the updating of pensions provided for in article 5 shall be reviewed every five years, after evaluation of the financial impacts of the new way of updating of pensions on the financial sustainability of the social security system. 2-the first evaluation referred to in the preceding paragraph takes place in 2012.

Article 13 entry into force this law enters into force on 1 January 2007.

Seen and approved by the Council of Ministers of 12 October 2006 Prime Minister the Minister of Parliamentary Affairs Minister Presidency 9 Annex IAS Indexing of pensions and other social benefits, referred to in article 7 Provision% IAS indexing General Regime-minimum value of invalidity and old age: number of years number of years 15 to 20 years civil 64.5% number of calendar years 21 to 30 years 71.2% number of calendar years > 30 years 89.0% pensions of the Special Social Security Regime of agricultural activities 53.4% Pensions non-contributory scheme 44.5% pensions of the Transitional Scheme farm workers and other Similar Regimes in the non-contributory Schemes 44.5% value of Social insertion Income 44.5%