The new law aims to establish “a uniform and singular legal regime” for the two autonomous regions, aimed at ensuring simplification, efficiency, and equal treatment across the regions.
Among the key changes is the reduction in the maximum fare amounts paid by beneficiaries of the subsidy, set by a decree, which takes effect on Thursday.
The creation of an electronic platform to streamline reimbursements and a financing mechanism to allow passengers to access credit is also planned.
The Social Mobility Subsidy
Established in 2015, the social mobility subsidy enables residents, equivalent residents, and students from the Azores and Madeira to travel at a maximum fare, stipulated by decree, to the mainland and between the two archipelagos.
The subsidy, guaranteed by the state, aims to ensure social and territorial cohesion.
Beneficiaries must purchase tickets at the sale price and can only request reimbursement at a CTT store after the trip is complete.
Initially, reimbursement was the difference between the eligible cost of the ticket (in economy class) and the maximum fare borne by the resident, with no ceilings. However, limits were later imposed on the eligible cost of tickets: 400 euros in Madeira and 600 euros in the Azores.
In 2023, the social mobility subsidy cost amounted to 126.2 million euros, with 81.2 million allocated to beneficiaries in the Azores and 45 million to those in Madeira.
In July 2024, a working group, chaired by the National Civil Aviation Authority (ANAC), was formed to propose changes to the social mobility subsidy.
The New Fares
Starting Thursday, there is a reduction in the maximum fares paid by residents and students of the Azores and Madeira under the social mobility subsidy program.
For trips between the Azores and the mainland, the maximum fare for residents drops from 134 to 119 euros and for students from 99 to 89 euros, with a 600-euro limit on the eligible cost of the ticket.
For connections between Madeira and the mainland, the maximum fare for residents decreases from 86 to 79 euros and for students from 65 to 59 euros.
In this case, the limit on the eligible cost of tickets is 400 euros in Madeira and 500 euros in Porto Santo.
For travel between the two archipelagos, the maximum fare for residents lowers from 119 to 79 euros and for students from 89 to 59 euros, with a 600-euro maximum on the eligible cost of tickets.
The reduction in maximum fares was announced by Prime Minister Luís Montenegro at the regional congress of PSD/Azores in October 2024.
The New Model for 2025
One of the main changes in the new model is the establishment of a “platform for managing beneficiaries and the reimbursement process,” designed to “simplify, dematerialize, and automate eligibility and reimbursement procedures,” pending the publication of a decree.
In November, the Minister of Infrastructure and Housing, Miguel Pinto Luz, expressed the expectation that the platform will be operational “by June 2025”.
The electronic platform will not only eliminate the need to visit CTT locations but also allow for reimbursement requests to be submitted immediately after ticket purchase and before the flight.
The decree also envisions “the possible establishment of a financing mechanism that allows passengers credit paid 100% within a specified timeframe.”
Until the electronic platform is available, the subsidy payment will continue to be processed through CTT, following the “previously existing” rules.
The New Eligibility Requirements
The new subsidy allocation model revises the eligibility criteria for beneficiaries, “seeking to clarify and simplify the respective regime,” aligning with “concerns raised regarding the eligibility of non-Portuguese residents.”
Previous decrees defined the beneficiaries of the social mobility subsidy as “citizens of Portuguese nationality or another EU member state or any other state with which Portugal or the EU had concluded an agreement on the free movement of persons.”
Eligible passengers could also be family members of EU citizens who “had acquired the right of permanent residence in Portuguese territory” or citizens of any state with which Portugal had “concluded an agreement related to the general equality of rights and obligations between Portuguese citizens and third countries.”
Despite the legal requirements, all immigrant residents in the two autonomous regions had access to the social mobility subsidy until November 2024, when citizens of third countries were informed they would no longer benefit from reimbursement.
In January, the Assembly of the Republic approved a proposal originating in the Azorean parliament to cover all immigrant residents in the autonomous regions.
The new decree clarifies that residents eligible for the subsidy are “citizens, regardless of their nationality or statelessness, residing for at least six months in an autonomous region.”
The change in the concept of resident passenger came into effect starting November 1, 2024.
The Control Mechanism
The new social mobility subsidy model introduces “a control mechanism intended to mitigate potential overcharging of fares above the price practiced by airlines,” to prevent “potential undue exploitation by certain economic agents.”
According to the decree, the General Inspectorate of Finance must “conduct selective verifications, particularly concerning the prices practiced by carriers in these connections and the amount stated on the respective invoices issued by intermediaries, to cross-verify the public subsidies requested and paid to beneficiaries.”
Air carriers are required to inform the National Civil Aviation Authority (ANAC) and the Mobility and Transport Authority (AMT) about their fare structures, fare distribution, and “additional charges to the ticket price, specifically the ticket issuance fee and the fuel surcharge.”
Whenever changes occur, they must “notify the ANAC and AMT respectively, 24 hours before the effective date of the respective change.”
The Frauds
In April 2024, the Public Prosecutor’s Office charged 60 defendants in the Azores with crimes of aggravated fraud and document forgery related to the social mobility subsidy, causing the State a loss of over 318,000 euros.
In January of this year, charges were brought against 43 individuals and a company for the wrongful collection of the social mobility subsidy at CTT counters by falsifying flight tickets between Madeira and Lisbon, with an estimated loss to the State of at least 529,000 euros.
In the Azores, the Public Prosecutor filed charges in March against 22 individuals and two companies for crimes of speculation, document forgery, fraud, money laundering, and criminal association, also linked to the social mobility subsidy.
The case involves two travel agencies allegedly created to sell tickets between the autonomous regions and the mainland at prices below market rates, causing the State a loss of over 9.5 million euros.
