Observation (CEACR) - adopted 2007, published 97th ILC session (2008)

Social Security (Minimum Standards) Convention, 1952 (No. 102) - Portugal (Ratification: 1994)

With reference to its previous comments, the Committee notes the Government’s report, accompanied by observations from the Confederation of Trade and Services of Portugal (CCSP), the Portuguese Confederation of Tourism (CTP), the General Confederation of Portuguese Workers (CGTP–IN) and the General Union of Workers (UGT).

Sustainable development of social security. The Committee recalls that following the entry into force of Framework Act No. 32/2002 of 23 December, establishing a new structure for the social security system, extensive reforms have been carried out in the various branches and have been covered by a broad public discussion (as was the case in 2006 on the occasion of the revision of the legal framework for unemployment protection). The signature in October 2006 of the Agreement on Social Security Reform between the Government and the social partners with a view to ensuring the financial equilibrium of the social security system in the face of current economic, social and demographic challenges constituted a new stage in this process. In accordance with the Public Administration Restructuring Programme (PRACE), Legislative Decree No. 211/2006 of 27 October approved the organigramme of the Ministry of Labour and Social Solidarity. In 2007, a new Framework Act on the social security system, Act No. 4/2007 of 16 January, once again reformed the structure of social security, among other measures by introducing optional public and private supplementary capitalization schemes. Finally, Legislative Decree No. 52/2007 of 8 March reactivated the National Social Security Council, which is an advisory body through which the social partners and other social organizations participate in the management of social security policy. The Committee is bound to note that Portugal is in the process of establishing a new social security system redesigned for the twenty-first century. Although there is no unique model to be followed in this respect, in order to ensure their sustainable development all systems should nevertheless comply with certain basic principles of sound governance and social cohesion, compliance with which is under the general responsibility of the State. Moreover, this responsibility takes on particular importance during such periods of restructuring, not only in the national context to ensure the survival of the system, but also at the international and regional levels with a view to maintaining the regulatory framework established by the common provisions of international and European law. In view of the profound and evolutionary nature of the social security reforms in Portugal, the Committee considers it necessary to follow closely developments in the situation from the point of view of the application of the relevant ILO Conventions. In order to do so, it would be grateful if the Government would continue providing detailed information on any new legislative, administrative or judicial measures adopted giving effect to the Agreement on Social Security Reform of 2006.

Part II (Medical care) of the Convention, Article 10. The Committee notes the detailed information provided by the Government concerning the current reform of the health system in Portugal and the main initiatives to improve the quality and effectiveness of care and to contain costs. It notes in particular that, for the first time for several decades, the financial situation of the national health system in 2006 was in surplus by 167 million euros. The containment of the cost of primary care and in public hospitals with an enterprise status (EPE) was accompanied by an increase in productivity and a reduction in the average waiting time for surgery, which fell from 8.6 months at the end of 2005 to six months during the first quarter of 2007. The Committee notes these developments with interest. It requests the Government to indicate the other criteria that are used in Portugal to monitor and measure the improvement in the general health condition of the population and the effectiveness of the action of the national health system in this respect. It would also be grateful to be provided with information on the new rules relating to the cost-sharing of beneficiaries in health care, including the new scale of cost-sharing approved by Order No. 395‑A of 30 March 2007.

Part IV (Unemployment benefit). The report indicates that the legal framework for unemployment protection was modified by Legislative Decree No. 220/2006 of 3 November, including in relation to the following aspects: clarification of the concept of suitable employment; reduction of the qualifying period for access to unemployment insurance; modification of the period during which unemployment benefit is provided, which is based on the age of the beneficiary and the length of the contribution period; and changes to the rules relating to early retirement. The Committee hopes that the Government’s next report will contain a detailed evaluation of the impact of these changes on the application of each of the Articles of Part IV of the Convention, with particular reference to the provisions relating to suitable employment and the qualifying period.

Part V (Old-age benefit). Legislative Decree No. 187/2007 of 10 May, which entered into force on 1 June, established a new legal framework for old-age and invalidity benefits under the general social security scheme. Among the innovative measures, the Committee notes in particular:

–      the acceleration of the transitional period towards the calculation formula introduced by Legislative Decree No. 35 of 19 February 2002;

–      the introduction of a financial viability factor in the calculation of pension benefits as from 2008, which is the outcome of the relationship between average life expectancy in 2006 and the figure for the year prior to the date on which the pension is claimed; and

–      the changes in the rules of the scheme relating to the flexibility of the retirement age, which takes the form of a penalization of 0.5 per cent for each month prior to the age of 65 years.

In view of the new rules for the calculation of old-age pensions introduced as of January 2008, the Committee requests the Government to recalculate in its next report the replacement rate of the old-age benefit for a standard beneficiary who has completed a qualifying period of 30 years.

Part VI (Employment injury benefit). In its observations, the CGTP–IN alleges that as a result of the dualistic insurance system, private for employment accidents and public for occupational diseases, the victims of employment accidents often receive less favourable treatment than those affected by occupational diseases. Moreover, the legal provisions relating to vocational rehabilitation are still not properly regulated and are not therefore applied. In view of these allegations, the Committee requests the Government to demonstrate in its next report that the medical care provided to victims of employment accidents covered by private insurance companies includes all the types of care referred to in Article 34, paragraph 2, of the Convention without any limitation whatsoever and that it is provided not only with a view to restoring the health of the person concerned and her/his ability to attend to her/his personal needs, but also to maintain and improve the health and ability to work, in accordance with Article 34, paragraph 4. Please also indicate the extent to which the contracts concluded by employers with private insurance companies envisage the vocational rehabilitation of victims of employment accidents, in accordance with Article 35 of the Convention.

Part XI (Standards to be complied with by periodical payments), Article 65, paragraph 10. (a) In reply to the Committee’s previous comment, the Government shows in its report that the adjustment rate of pensions indexed to the minimum monthly guaranteed earnings (RMMG), namely minimum old-age and invalidity pensions under the general scheme, pensions under non-contributory and assimilated schemes and under the special social security scheme for agricultural activities, benefited during the period 2003–06 from increases that were higher than the inflation rate, in accordance with Article 65, paragraph 10, of the Convention. The report also indicates that, in accordance with the new Framework Act on the social security system, Act No. 53-B/2006 of 21 December established the Social Support Index (IAS) and determined new rules for the adjustment of pensions and other social benefits under the social security system. As from 1 January 2007, the IAS replaced the earlier RMMG as the reference index for benefits. The value of the IAS is updated annually on the basis of the real growth of the gross domestic product (GDP), corresponding to the average of the average annual growth rates for the past two years, and based on the average variation over the past 12 months of the Consumer Price Index (CPI), without housing, which is available on 30 November of the year prior to the year to which the adjustment is related. The Government indicates that with a view to reconciling changes in the purchasing power of pensions and the financial sustainability of the system, the new mechanism provides for a differentiation in adjustment rates, by giving priority to pensions at a level that is equivalent to or lower than 1.5 IAS, which cover around 90 per cent of the beneficiaries of old-age pensions; an increase in the purchasing power of this segment of beneficiaries is guaranteed. The Committee would be grateful if the Government would explain the advantages for beneficiaries of the transition from the former system of indexation related to the RMMG introduced in 2002 to the new system of the adjustment of pensions related to the GDP and the CPI and if it would demonstrate, based on statistical data for the period covered by its next annual report, that the adjustment rate of pensions for all persons protected follows variations in the general level of earnings and the cost of living, in accordance with Article 65, paragraph 10, of the Convention.

(b) In its previous comments, the Committee requested explanations on the manner in which pensions provided in respect of employment injury by private insurance companies have been revalued and adjusted. The report indicates in this respect that the legal framework governing employment accident funds (FAT) was modified by Legislative Decree No. 185/2007 of 10 May, so as to guarantee insurance companies the reimbursement of the amounts required for the adjustment of pensions for death or for permanent incapacity of 30 per cent or higher, as well as the adjustment of the supplementary benefit for the assistance of another person. This Legislative Decree establishes a specific system for the annual adjustment of employment injury pensions based on the adjustment references (the CPI and the growth of the GDP) envisaged by the new system for the adjustment of social security pensions, with the exclusion of step adjustments over contribution careers. The Committee hopes that the new system for the adjustment of employment injury pensions will continue to maintain the real value of the benefits in relation to the cost of living.