The Council of Ministers on September 5th approved a package of exceptional measures to support families to mitigate the effects of inflation.

This program will represent an amount of 2400 million euros, in order to support families in the face of the recent increase in the cost of living.

Of the eight measures announced by Prime Minister António Costa, five will take effect during 2022, with the rest only coming into force in 2023.

The measures will be:

• VAT reduction on electricity from 13% to 6% until December 2023;
• Individual support of €125 paid in October to non-pensioned citizens with a gross monthly income of up to €2700;
• One-time payment of €50 in October for each dependent child, up to 24 years of age;
• Extraordinary pension of 50%, paid in October, for all pensioners with pension updates. A 4.43% increase in pensions up to €886; 4.07% on pensions between €886 and €2659; 3.53% in the remaining pensions subject to updating;
• Update of rents with a limit set at 2% and respective compensation in the IRS and IRC of landlords;
• Minimum savings of 10% with the transition to the regulated gas market for the typical consumer (couple with two children);
• Freezing of the prices of public transport passes and travel by CP (Comboios de Portugal), as of January 1, 2023;
• Extension, until the end of 2022, of the following measures: suspension of the carbon tax, return of additional VAT revenue and reduction of the ISP (Tax on petroleum products). These measures should represent savings of €16 and €14 on a 50 liter tank of gasoline and diesel, respectively, based on the prices in force at the time of the announcement.

Adding to the amount associated with these measures the more than 1600 million euros mobilized until the month of September, the total expenditure in 2022 exceeds 4200 million euros.