In Portugal, thousands of pensioners remain active in the job market, even after retiring. What many are unaware of is that this effort can directly increase the value of the pension. According to the legal Social Security regime, anyone who receives an old-age or relative disability pension and continues to deduct it is entitled to an automatic increase in the value of the pension, without having to submit any request.
According to Social Security, the calculation is made annually and 1/14 of 2% is applied to the total remuneration recorded in the previous year, with effect from January 1st.
Payment is processed the following year, typically in June or, where applicable, in November, based on the income actually declared.
What the law says
According to the Contribution Regimes Code, anyone who works as an employee continues to make contributions, but at the pensioner rate.
In the case of those retired due to old age, the rate is 7.5%, and for those with relative disability it is 8.9%. The employer contributes, in turn, 16.4% or 19.3%, depending on the professional context, values that differ from public functions.
Pensioners who work on their own are, as a rule, exempt from contributions. However, they can waive this exemption, informing Social Security, and start paying contributions on the relevant income, in order to benefit from the same annual increase. These rules are contained in Regulatory Decree no. 1-A/2011, namely in articles 60 and 61.
Who can benefit
The right to increase only applies to old-age and relative disability pensioners with registered discounts. Pensioners with absolute disability cannot carry out paid work and, therefore, are excluded from this benefit.
In situations where the beneficiary receives a foreign pension, these rules only concern the Portuguese pension under the general regime. In the case of Caixa Geral de Aposentações (), specific rules apply.
There is, however, an important exception: anyone who retired early under the flexibility regime cannot work in the same company for three years following the start of the pension.
How accrual works
The additional amount is calculated every year, based on the remuneration declared in the previous calendar year. The amount resulting from this calculation is incorporated into the monthly pension value with retroactive effect from January 1st. A minimum period of 12 months of consecutive deductions is not necessary: only the remuneration actually recorded in the system counts.
In practical terms, pensioners who maintain a professional activity with discounts have a direct increase in their pension in the following year, proportional to the income earned. This is a way of compensating those who continue to contribute to the system, even after retirement.
Therefore, if you continue to work for someone else, you will deduct the pensioner rate and see your pension automatically reinforced. If you are self-employed, you can choose to contribute to access the same benefit.
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