Portugal is ageing. The Synthetic Fertility Index (ISF) does not reach 1.5 children on average per woman of childbearing age, according to Pordata data for 2019, a figure that is far from the 2.1 Children needed to ensure generational replacementand further away from 2.3 children that the Portuguese would like to haveaccording to a report on the evolution of world population, prepared by the United Nations Population Fund (UNFPA).Lack of financial and job stability are the main reasons for postponing the birth of the first child. The problem of low birth rates in Portugal has been on the agenda of policy makers. Some municipalities have given birth incentives, in an attempt to settle people in the municipalities and to contribute to the increase in the birth rate in the country. The State has also made its contribution with subsidies and tax deductions. The State Budget for 2023 (OE 2023) presented by the Executive includes precisely some measures to support birth rates, namely the increase in IRS deduction it’s the expansion of the Young IRS🇧🇷 there is still a support for higher education students who are displaced from their residence. Others, better known, like the parental allowance, they are to be kept. If you are thinking about expanding your family or if you already have a baby on the way, find out about some of the birth incentives you are entitled to.
parental allowance
The first of the first: parental allowance. It is about a financial support given to workers while they are looking after their children, who have just been born or adopted. This subsidy thus replaces workers’ wages during their period of parental leave. The subsidy must be applied for within six months from the first day you stopped working. If you do not submit the application within this period, but submit the application during the legal period for granting the subsidy, you will have a discount on the period for granting the benefit in relation to the time that has passed beyond the six months. To apply for the parenting subsidy, you must submit the ModeloRP5049-DGSS form, duly completed, and accompanied by the requested documents mentioned therein. Here you will find all the information and instructions you need to complete the form correctly.
IRS deduction
Any household is also entitled to a Fixed IRS deduction for each dependent child🇧🇷 The amount of this deduction depends on the age of the child and whether there are more dependents in the same household: 600 euros if the dependent is over three years old; and 726 euros (600 euros plus a “bonus” of 126 euros) if you are three years old or younger by December of the tax year. However, this “bonus” can be higher if there are other dependents in the same household. The executive decided to increase the IRS deduction from the second child to 900 eurosas long as these children are no older than six years old by December 31 of the tax year. Read more: IRS: What changes next year
familiar IMI
In addition to the IRS deduction, the Municipal Property Tax (IMI) for families is, in practice, a tax rate discount that some municipalities attribute to property owners who have dependants. In other words, a fixed deduction is previously subtracted from the total tax payable, which varies depending on the number of dependents. The decision is taken in the Municipal Assembly and communicated annually to the Tax Authority, so you do not need to request the tax deduction or go to the municipality services. If so, it is an automatic procedure. Also read: Family IMI: Who is entitled and how to apply?
local incentives
There are also certain areas of the country (especially inland) that are implementing some benefits to increase birth rate of the region and, at the same time, retain young people and couples. To this end, they go even further than the Government. Municipalities, parishes and islands provide various types of support, ranging from free passes for young people and offer of snacks or meals in pre-primary and 1st cycle until the offer of school material🇧🇷 However, the most common is the allocation of an allowance to new parents. This is the case of Nelas, Mealhada and Alcobaça, which allocate the money through the reimbursement of expenses incurred in the municipality for the child (according to the regulations of the respective municipalities). Lamego also attributes a subsidy of 500 euros for the purchase of diapers or milk in establishments in the municipality.
large families
If yours is considered a large family – that is, one that contributes to the national average being more than two children per couple, which implies having three or more children – there are some benefits especially for your family. Among them the discount given on the electricity bill, regardless of provider; The special component for large families in the water tariff (although this is not an obligation, so the implementation of the measure, recommended by the Regulatory Entity for Water and Waste Services (ERSAR), depends on the municipality in which you reside); it’s the 50% discount on Vehicle Tax (ISV) in the purchase of a light vehicle with a capacity of more than five seats (subject to compliance with certain preconditions, namely, at least two of the three dependents are under the age of eight, and the light passenger vehicle, new or used, has emissions NEDC CO2 emissions equal to or less than 150 g/km or WLTP CO2 emissions equal to or less than 173 g/km and seating capacity greater than five).
support for day care centers
In the State Budget proposal for 2023, the State expects to spend 60 million euros to extend the free day care centers to 60 thousand children. The measure is aimed at the neediest families, namely those belonging to the 1st and 2nd income brackets.
Support for displaced higher education students
If your child attends higher education and is away from home, the proposed State Budget for 2023 includes 43 million euros to ensure that students who are not scholarship holders are also entitled to support for accommodation, which corresponds to a monthly support ranging from 221 euros to 288 eurosdepending on the municipality where the educational institution is located.
Expansion of the Young IRS
Finally, if your child is about to start making their own IRS, be aware that the application period for the Young IRS will be, according to the OE 2023, extended to five years, and now includes self-employed workers. The exemption applicable to young people’s income, currently 30% in the first two years, 20% in the two subsequent years and 10% in the last year, increases to 50% in the first year, 40% in the second year, 30% in the third and fourth years, and 20% in the last year. In addition to the support provided by law, there are other ways to acquire flexible benefits in the context of parenting. Several companies have reinforced their offer in this regard, offering employees the possibility of issuing childhood checks and providing other support for their children’s education. Coverflex’s childhood check issue experience, for example, has met the needs of employees who are going through a new phase in their lives and covers education expenses for children up to 7 years old (exclusive), and the flexible benefits offered by company include Education expensesa benefit that covers educational expenses for both the employee and people in their household who are 7 years old or older. 
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