Employers Will Get More Time to Recover 434 Million Euros From the Closed Work Compensation Fund, but How Much More Is Still Undecided

Employers in Portugal will get more time to recover the money they paid into the Fundo de Compensação do Trabalho (FCT), the dismissal-compensation fund that closed to contributions in 2023. At the Concertação Social meeting on 21 October, the Government and the social partners agreed to negotiate an extension beyond the current deadline of 31 December 2026, Lusa reported via Notícias ao Minuto. About 434 million euros is still in the fund.

How long the extension will be has not been settled. "No point has been agreed, except that there will be a postponement," the Labour Minister, Maria do Rosário Palma Ramalho, said, according to ECO. She said a decision would come soon.

What was proposed

• Six more months. Two employer confederations and the UGT union federation proposed extending the deadline by six months. The minister said other periods had also been put forward.
• Small balances paid out. The CTP, CIP and CCP employer confederations want firms with balances under about 1,000 euros (roughly 70 percent of cases, by the employers' count) to be able to simply withdraw the money, without tying it to one of the purposes the law allows. The partners agreed to negotiate this too; the UGT's Mário Mourão did not rule it out.
• The CGTP is opposed. Its leader, Tiago Oliveira, wants unclaimed money to go to the Fundo de Garantia de Compensação do Trabalho (FGCT) or the Fundo de Garantia Salarial once the deadline passes.

What the FCT is and what the money can be used for

Employers paid into the FCT for workers hired from 1 October 2013, to cover up to half of the compensation due when a contract ends. Decreto-Lei n.º 115/2023, in force since 1 January 2024, closed it for good: no new contributions, debts to the fund wiped out, and each employer's individual worker accounts merged into one global account. The money still belongs to the employer, but under Lei n.º 70/2013 as amended it can be mobilised only until 31 December 2026, and only to:

• pay up to half of the compensation owed to a departing worker who was enrolled in the fund;
• fund certified training and qualifications for workers;
• support workers' housing costs and investments;
• pay for other investments agreed with worker representatives, such as canteens or crèches.

Balances under 400,000 euros can be drawn on at most twice; larger balances up to four times. For training or housing, employers without a works council or union delegates must tell staff 10 days in advance. Money not withdrawn when the FCT is wound up goes to the FGCT, the separate guarantee fund that pays workers half their compensation when an employer does not. The FCT's own factsheet put its market value at 451.1 million euros on 30 September.

What employers should do now

• Check your balance. Log in at fundoscompensacao.pt with your Social Security number (NISS) and password and open "Saldos e Movimentos FCT". The official FAQ explains the rules in Portuguese. If an accountant handles your Social Security affairs, the portal can now give them limited access.
• Do not count on the extension yet. Until a change is published in the Diário da República, 31 December 2026 remains the legal deadline.
• Keep records. The law does not require proof when you apply, but the Labour Inspectorate (ACT) can ask you to show how the money was spent.

The same meeting discussed the minimum wage, which the 2027 budget proposal assumes will rise to 970 euros. The minister said the Government will honour the existing agreement, while the UGT pressed for at least 1,000 euros and the CGTP for 1,100.