Pensioners of the Caixa Geral de Aposentações (CGA) are set to receive their August pensions on Tuesday, the 19th, with the application of new IRS tables, mirroring the situation of Social Security retirees. According to the payment schedule, these pensions will be processed using the updated IRS withholding tables, potentially resulting in a higher net pension this month.
A spokesperson for the Ministry of Labor, Solidarity and Social Security confirmed that both Social Security and the CGA will implement the new tables starting in August. This contrasts with last summer when both entities were unable to apply the new tables immediately after the announcement of the updated withholdings. This time, both expect to pay the upcoming pensions according to the new withholdings.
In 2024, taxes also fell mid-year, and when the government released new tables at the end of August, to be applied in September, Social Security and CGA had already processed the pensions for the following month. Consequently, they only applied the new rates in October, making adjustments for September’s pensions. This time, forecasts differ.
What Changes?
According to the government’s decree published on the Finance Portal, companies and other entities responsible for paying salaries and pensions must apply the new tables from August. If immediate application is not feasible, adjustments can be made later in the year.
The decree by the Secretary of State for Fiscal Affairs, Cláudia Reis Duarte, provides tables for two distinct periods. The tables applicable in August and September feature exceptionally lower rates to compensate for withholdings made between January and July when it was not yet possible to account for the reduction of IRS rates for the 1st to 8th brackets approved by parliament this month.
Second-period tables concern October, November, and December, reflecting the final version of the IRS. During these three months, rates are higher than those in August and September but lower than the current rates. The provision allowing for withholding corrections pertains only to the values for August and September.
The decree anticipates that “in situations where withholdings on dependent work and pensions paid or put at disposal between August 1 and September 30, 2025, have not been made according to the tables provided in No. 2 [of the decree], the entity obligated to withhold can adjust the withholdings in subsequent months, up to and including December 2025.”
In remarks to Lusa regarding the new tables, Cláudia Reis Duarte had already mentioned that the expectation was for pensioners to see this reduction reflected in August.
In September, besides their usual pension, pensioners earning up to 1,567.5 euros gross monthly will receive an extraordinary supplement, varying according to the pension amount, potentially being 100, 150, or 200 euros.
This supplement will not be subject to withholding, as the government decided to exclude it from the monthly charge. The decree-law, published in the Official Gazette on July 18, explicitly states that the amount “is not subject to withholding at the source in terms of personal income tax.” It is also safeguarded as “unseizable” and “does not count towards the calculation of the solidarity supplement for seniors.”
