€600 million hangs in balance as PS raises fresh concerns over single social benefit – Portugal Resident

The path towards Portugal’s new PSU single social benefit has become uncertain once again, with the Socialist Party raising concerns over legislation it had appeared ready to support little more than a week ago.

The PS has written to the government seeking clarification on several aspects of the Prestação Social Única (PSU), approved by the Council of Ministers on Thursday, July 30, and has not ruled out asking parliament to review the decree-law.

Any further delay could have serious financial consequences. The reform must come into force this month if Portugal is to meet the milestone linked to the release of €600 million in European PRR recovery funding.

The latest intervention comes after the Socialists announced on July 24 that they had reached an agreement with the PSD-led government, saying the compromise would “preserve social cohesion, human dignity and inclusion”.

But according to Público, the party now fears that aspects of the decree-law approved by the government could leave some claimants worse off.

At the centre of its concerns is the PSU’s reference value of €268.60, equivalent to 50% of Portugal’s Social Support Index (IAS). The PS has also queried the proposed calculation rules and their potential effect on both eligibility and the sums paid.

Those who currently receive social unemployment benefit, social parental benefit or a social pension are among the groups that could face lower payments under the new system, the party fears.

Questions have also been raised over how housing support will be taken into account, the rules governing additional payments and the responsibilities given to local councils for monitoring and supervising claimants.

The PS further wants ambiguities removed from passages that could be interpreted as creating a universal obligation for PSU recipients to perform socially useful activities.

This is particularly sensitive because the party said its earlier agreement with the government had ensured such activities would not be compulsory. It had also claimed to have secured the removal of a proposed complaints channel, criticised as a system encouraging “poor people to spy on poor people”.

Another concern involves vulnerable children. The decree-law reportedly refers specifically to orphaned minors, without clearly covering children who are not orphans but whose circumstances could nevertheless justify access to the benefit.

Although parliament is in its summer recess, the PS could request parliamentary scrutiny of the decree-law and seek amendments when MPs return – but that would imply the country losing out on the €600 million as the deadline set for the PSU’s implementation is August 31.

Trade union confederation CGTP has meanwhile launched a broader attack on the reform, arguing that it contains provisions that breach fundamental principles of equality, the right to work and the right to social security.

The union said it is impossible to conclude that the PSU will not be “globally less favourable” than the benefits it is intended to replace, either in its eligibility conditions or payment levels.

It reserved its strongest criticism for the possibility of beneficiaries being required to undertake unpaid work, describing the proposal as bearing “many similarities to the definition of forced labour”.

Providing organisations with a pool of unpaid workers could also distort the labour market, CGTP argued, by removing incentives to employ salaried staff for the same duties.

The government says the €268.60 reference amount represents an 8.5% increase on the current Social Integration Income (RSI). CGTP countered that it remains far below Portugal’s monthly at-risk-of-poverty threshold of €723 and offers no meaningful prospect of allowing economically vulnerable people to live with dignity.

The PSU consolidates a range of existing means-tested benefits into one system. The government expects it to add around €50 million a year to public spending — approximately 10% more than the present cost of the payments being absorbed.

The decree-law implements legislative authority approved by parliament in June and promulgated by the President on July 17. But the latest doubts suggest the political agreement that cleared its path may not have settled what the new welfare system will mean in practice.

Source material: noticiasaominuto/ ECO