How does rental support for new contracts operate?

Even though they stayed in the same house, those who were compelled to modify their rental agreement now receive the same monthly assistance as tenants who put in a lot of work.

In July 2024, the entitlement to this assistance was restored. You can benefit from our assistance if this is the situation for you. When new contracts are made, you will learn how rental support operates.

How leasing assistance is calculated and how it functions

The extraordinary income assistance is paid out on a monthly basis for a maximum of five years to families with an effort rate exceeding thirty-five percent.

Simply divide the monthly rent by the net disposable monthly income, then multiply the result by 100 to determine the effort rate of a family renting a home.

The application must be submitted by the last business day of the month following the rent update. For example, if the rent was altered in February, the application must be submitted by the last working day of March.

Who is eligible for rental assistance?

The household must fulfil a number of conditions in order to be eligible for the extraordinary income support, including:

• The household must be a tax resident of Portugal; it must also be properly registered with the Federal Revenue Service and have a lease or sublease agreement executed by March 15, 2023. At least 35% of the effort must be put forth.

• The annual income is limited to 38,632 euros, the maximum amount allowed by the sixth IRS bracket.

• For households that are exempt from filing an income tax return, the monthly income must come from employment or specific social benefits and cannot exceed 1/14 of this total.

It is crucial to remember that this assistance is only available for contracts signed after March 15, 2023, provided that the new agreement is for the same renter and the same property, which serves as their tax domicile. Furthermore, the renter must have previously benefited from this assistance, and the prior agreement must have ended at the landlord's request. Additionally, income support is given to those who are exempt from filing an annual income tax return, to people who get retirement, pension, or survivor's pension benefits, or to people who receive benefits under the voluntary social security program for research fellows.

In addition to these options, recipients of the following social benefits may also be eligible for assistance, provided that the household's yearly income stays below the sixth IRS bracket, which is now €38,632:

• Social, disability, survivor's, or old-age pensions;

• Unemployment insurance;

• Parenting allowance; occupational disease and sickness benefits (with a minimum one-month waiting period);

• Social integration income;

• Social inclusion;

• Senior solidarity supplement; and

• Support allowance for the primary unpaid carer.

However, there will be requirements that must be met before the support can be granted, and supporting documentation will need to be submitted.

• When the rent amount exceeds the beneficiary's income;

• When there are discrepancies between the rental income reported in the landlord's IRS, the rent reported in the tenant's IRS, and the rental agreement recorded with the Tax Authority.

How does the rental aid payment process operate?

Social Security transfers the support to the bank account listed in the information system by the twentieth of every month.

The only way to pay for rental assistance is by bank transfer. As a result, having a current bank identification number (IBAN) linked to Social Security is crucial.

The Tax Authority (AT) is in charge of getting in touch with recipients to find out if they qualify for help. If so, it is necessary to specify the amount to be received as well as the length of the aid.

Income support: new regulations to be considered

Prior to March 15, 2023, the assistance was only available for rental or sublease agreements for a first residence. When the lease was cancelled, the income support payments ceased.

New contracts that are signed after this date have to be for the same renter and the same house. Therefore, the benefit is once again available to those who were deprived of extraordinary rental support as a result of their landlord terminating their employment.

Renting a home: the significance of providing this assistance

Given the current housing situation, it was necessary to extend the special support for rent payments to renters who were coerced by the landlord into signing a new renting agreement for the same residence.

Many tenants expressed concern about the Federal Revenue Service's and the Institute of Housing and Urban Rehabilitation's (IHRU) lack of responses. These worries were addressed by the current decision that formalises this move, lessening the harm that the termination of rental agreements would have caused. Families may manage the present rental market and boost their spare income in this way.

Is rental assistance payment retroactive?

Both yes and no. It is contingent upon the circumstances surrounding your request for exceptional assistance, specifically:

• There is no retroactive effect when income support is restored for new contracts;

• If the support is requested, for instance, in March and payment does not begin until September, you will be compensated for the funds from the date of application submission for the preceding months.

• Support can be resumed in this way for those who have lost it. The law simply permits the extension of support; it has no retroactive impact, thus it is impossible to regain help from prior months.