Find out what pre-retirement is, the characteristics of this career stage and how to access the benefits it can bring you.
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First of all, it should be noted that, although they are often confused, pre-reform and early retirement are different things.
While early retirement allows access to an old-age pension before the legal retirement age (albeit with some reductions provided for by law), early retirement allows the worker, through a written agreement with the employer, to reduce your hours and/or workloador even stop working, but continue to receive remuneration.
This written agreement, signed by both parties, must contain the start date of the pre-retirement, the amount of the amount you will receive monthly and how your working time will be organized if you work fewer hours.
Pre retirement: 11 questions and answers
Who is the pre-reform accessible to?
This scheme is available for workers aged 55 and over.
Does it apply to civil servants?
Yes, civil servants are also covered in accordance with the terms of the General Law of Labor in Public Functions (Law No. 35/2014).
What types of pre-retirement exist?
There are two types of pre-reform – reduction of working hours Or the total suspension of work.
The two modalities have different consequences in terms of Social Security, but both allow the worker to receive a monthly remuneration also known as pre-retirement.
The process to obtain this status is simple: the employer must deliver the pre-retirement agreement signed with the worker to Social Security, together with the remuneration statement for the month in which the agreement comes into force.
How is the agreement made with the employer?
The agreement must be written and signed by the employee and the employer, and must contain:
- The identification, signature, domicile or headquarters of the employee and the employer;
- The start date of the pre-retirement situation;
- The monthly value of the pre-retirement remuneration;
- The organization of working time if the agreement is to reduce the provision of work.
How much money will the worker receive?
The amount to be received must correspond to an amount between 25% of the last salary earned, and the total value of that same salary.
If, during the pre-retirement period, there are salary increases (including the adjustment based only on the inflation rate) to which you would have been entitled, had you been working full-time, the pre-retirement amount will be updated in the same proportion, unless otherwise stipulated in the agreement signed between the parties.
What are the consequences in terms of rights in Social Security?
It all depends on the modality defined in the agreement.
If the agreement contemplates only a reduction in working hours, the worker’s rights are maintained in their entirety.
If the worker stops working, he no longer has access to sickness, unemployment and parenting benefits.
How are Social Security contributions processed?
The worker and the company continue to have to pay contributory fees, which are based on the remuneration that the worker earned before the pre-retirement and not the amount he will receive during that period.
But here, too, there are differences according to the pre-retirement regime. In situations where the worker retains all rights, the rate applied before the agreement is maintained. In case he loses rights, the contribution rate is reduced.
The fees to be applied are therefore the following:
|Suspension of work||18.3%||8.6%||26.9%|
|Reduction of working hours||Fee applied prior to agreement||The levy applied to it prior to the agreement is maintained.||total contributory rate|
The worker will be able to confirm that the Social Security contributions are being made by consulting his personal page in the Direct Social Security.
What if the employer does not pay the agreed pre-retirement amount?
If the employer does not pay the agreed amount, and if the lack of payment lasts for more than 30 days, the worker has the right to resume his full-time activity, without losing seniority, or to terminate the contract, with the right the compensation.
The compensation due corresponds to the value of the entire pre-retirement remuneration that would be due (without updates) up to the legal retirement age.
Is pre-retirement compatible with the exercise of other professions?
Yes. During the pre-retirement period, the employee can carry out another parallel and remunerated activity.
The legislation states that the regime comes to an end when the worker reaches the legal age for access to the old-age pension or when he requests retirement due to disability.
In addition, pre-retirement ends with the return of the worker to the normal work situation, or with the termination of the employment contract.
Article originally published in July 2021. Last updated in February 2023.