Have you been unemployed for a long time? See if you can apply for early retirement

Applying for early retirement is possible in case of long-term unemployment. Find out if you meet the necessary requirements and what penalties you may suffer.

If you have been out of work for a long time, ask early retirement for long-term unemployment it might be a possibility to consider. Although the legal age for claiming the old-age pension corresponds to 66 years and four months in 2023there are situations in which it is possible to anticipate the reform.

Long-term unemployment is one such case. Unemployed persons who have already exhausted their unemployment subsidy or social unemployment subsidy (initial) may apply for early retirement, as long as they have the years of discounts required by Social Security.

How does early retirement for long-term unemployment work?

To access early retirement due to long-term unemployment, it is necessary to meet the following requirements:

• Long-term involuntary unemployment (i.e. for more than twelve months);
• Having expired the period for granting unemployment benefit or social unemployment benefit.

In cases where this subsidy is not received, the unemployed person is not entitled to early retirement.

Penalties in force for those who access this regime

Applying for early retirement due to long-term unemployment may require consideration and some study, as it is best to try to figure out how much money you will lose with this decision.

In 2023, if you apply for early retirement due to long-term unemployment, which means retiring before the age of 66 years and four months, a 13.83% cut in pension amountvia the sustainability factor.

In addition to this cut, there may (or may not) be a reduction in the amount of the pension depending on:

• The date on which you applied for unemployment benefits;
• Of age;
• Two years of discounts.

Retirement with a penalty of 0.5% per month in advance

In order to apply for and be entitled to this early retirement, it is necessary that, on the date he became unemployed, the beneficiary has age 52 years or older and at least 22 years of discounts.

Another condition is that, on the date of commencement of the pension, you must be at least 57 years old and the period for granting unemployment benefit or social unemployment benefit (initial) has already expired. The situation of involuntary unemployment must also be maintained.

In this case, the penalty will be 0.5% per month of anticipation in relation to the age of 62. For example, if you are 61 years old and you are eight months short of turning 62, the penalty will be 0.5% x 8, that is, 4%.

Early retirement without penalty

In order for the value of early retirement due to long-term unemployment not to be reduced, it is necessary that, when unemployed, the applicant was at least 57 years old and 15 years of discounts.

In this case, you can apply for early retirement at age 62.

The beneficiary must be in involuntary unemployment situation and no longer be entitled to either unemployment benefit or social unemployment benefit (initial).

Penalty for unemployment by agreement

If unemployment resulted from the termination of the employment contract by agreement, a reduction factor of 0.25% is applied for each month of anticipation between the age of 62 and the legal retirement age.

In 2023, taking into account that the retirement age is 66 years and four months, the calculations would be as follows: 52 months x 0.25% = 13%.

The reduction factor is annulled when the beneficiary reaches statutory retirement age.

Other early retirement schemes

In addition to long-term unemployment, there are other situations in which it is possible to apply for early retirement:

• Be 60 years of age or older and have at least 40 years of discounts (flexibility scheme);
• Be 60 years of age or older and at least 46 years old (very long careers);
• Have carried out a professional activity of a painful or exhausting nature;
• Be covered by specific protection measures.

Where to apply for early retirement due to long-term unemployment?

Whether you intend to apply for early retirement due to long-term unemployment, or under any other anticipation scheme, you must go to Social Security, if you want to do it in person.

You can also apply online, through Social Security Direct, or by mail, to Social Security. If you mail the forms, you must include an addressed and stamped envelope so that services can return the delivery receipt to you.

Documents needed to apply for the renovation

When filling out the necessary form to claim retirement, in this case early retirement due to long-term unemployment, that document must be suitable for the type of pension you are claiming.

Also, do not forget to present photocopies of other documents (take the originals if verification by the entity is required) that you must deliver to Social Security, namely:

• Beneficiary’s valid civil identification document, namely, Citizen Card or Identity Card, Civil Registration Certificate;
• Title of Permanence/Residence if you are a foreign citizen;
• Beneficiary’s tax identification document;
• Document from the banking institution, proof of the IBAN, where the name of the beneficiary is shown as holder;
• Valid identification document of the requested party, in case of signature by request;
• Documents proving the length of compulsory military service.

As you are applying for early retirement, you will also need to submit:

Who lives abroad

If you live abroad, you must apply for an old-age pension at the Social Security institution in the country where you live. If there is no international Social Security agreement with Portugal in that country, contact the Centro Nacional de Pensões.

Article originally published in July 2019. Last updated in January 2023.