Lisbon, Oct. 1, 2026 (Lusa) - Unemployment benefits now represent a smaller percentage of last salary, falling from 70% in 2015 to 64% in 2025, according to an analysis by the Bank of Portugal published on Thursday.
This trend results from wage growth outpacing adjustments to benefit thresholds, which are defined in relation to the IAS, the central bank explains, emphasising that «this mechanism is particularly relevant at the lower end of the wage distribution, where the minimum benefit thresholds are most frequently applicable».
On the other hand, the inclusion of top-ups mitigates this reduction, bringing the replacement rate to around 66% in 2025.
Despite this decline in the benefit's value relative to wages, the analysis also found that, over the last decade, unemployment benefits increased by an average of 3.4% per year in nominal terms and 1.3% in real terms, reaching an average of €700 in 2025.
By wage level, the share of low-wage workers increased, while the share of high-wage workers remained relatively stable between 2015 and 2025.
Last year, around 40% of new claimants for unemployment benefits were workers earning up to €880 (in a year when the minimum wage stood at €870).
Meanwhile, the breakdown of new unemployment benefit claims by sector of activity shows that manufacturing and administrative and support activities accounted for the largest shares, both at around 17%, followed by retail at 14.2%.
Compared with 2015, the share of manufacturing and, above all, accommodation and catering increased, while the share of construction and public administration, education and health fell sharply, the analysis concludes, in the Economic Bulletin to be published next week.
This study, based on Social Security microdata, also noted that «the composition of new claimants for unemployment benefit has been changing, with an increasing proportion of older workers, women and foreign nationals».
The share of workers aged 50 or over rose from 21% to 26%, whilst the share of women rose from 51.6% in 2015 to 53.4% in 2025, and that of foreign workers increased from 2.2% to 26.6% over the same period.
However, this trend must be «interpreted in light of changes in the composition of salaried employment over the last decade, in particular the significant increase in the proportion of foreign workers in the labour market, who are on average younger than their national counterparts».
According to the study, after six months, foreign claimants are more likely than nationals to transition off unemployment benefits.
The analysis also concludes that a return to work may involve a pay cut and a sector change, although most claimants move directly into employment, with «among those who ceased to receive benefits in 2024, around 60% started a job within a month».
MES/ADB // ADB.
Lusa
