The increasing number of foreign workers in formal employment contributes to the financial health of Portuguese Social Security, official data shows.
Contributions from foreign workers to Portugal's Social Security are already enough to pay 17% of pensions in the country. This is shown by data provided by the Ministry of Labor, Solidarity and Social Security. While the Portuguese pension system disbursed 15.8 billion euros in benefits in 2023, immigrants injected 2.7 billion euros in the system. This account does not include expenses from Caixa Geral de Aposentações, which pays public employee pensions.
Foreign workers' contributions to Portugal's Social Security are already enough to pay 17% of the country's pensions and retirement benets. This is according to data provided by the Ministry of Labor, Solidarity and Social Security. While the Portuguese social security system disbursed 15.8 billion euros in benets in 2023, immigrants injected 2.7 billion euros into the system. This gure does not include expenses from the Caixa Geral de Aposentações , which pays retirement benets to public employees.
The participation of foreign workers in the nancing process of Portugal's Social Security has been growing year after year. And this movement, according to Pedro Góis, professor of Economics at the University of Coimbra and technical director of the Observatory of Migrations, has been fundamental to maintaining the sustainability of Social Security. In other words, there is a guarantee that, for a period longer than expected, the Government will not need to go into debt to pay the insured.
“There is a Social Security fund to which surplus funds from the system are transferred. And the amount of money in this fund has been growing year after year, thanks to the greater presence of immigrants in the job market,” says the professor. Between 2017 and 2022, the total number of foreigners in formal employment, contributing to Social Security, increased from 166,000 to 534,000, that is, more than tripling. This growth was mainly due to the ow of citizens from Brazil and other countries to Portugal. The Brazilian community is the largest among foreigners in Portugal and 85% of its members who are of working age are employed. Góis points out, however, that Social Security revenue from immigrant workers could be even higher if it weren’t for their choice to contribute based on lower salaries. “A large portion of these workers contribute based on an income of 601 euros — compared to the current minimum wage of 820 euros. Many don’t know that, in the future, when they retire, they will have lower benets than expected,” he warns. Today, the average pension paid by Social Security is 533.38 euros.