Labor & Taxes
Unemployment benefit drops from 70% to 64% of last salary in a decade
A Bank of Portugal analysis shows that the unemployment benefit replacement rate fell from 70% in 2015 to 64% in 2025, primarily because wages grew faster than the benefit caps linked to the IAS (Social Support Index). While the average nominal value of the benefit rose to 700 euros by 2025, it covers a smaller portion of previous earnings, particularly for low-wage earners. The study also notes a significant demographic shift in benefit recipients, with the share of foreign workers increasing from 2.2% in 2015 to 26.6% in 2025.
Why it mattersIf you become unemployed, the benefit you receive will likely replace a smaller portion of your previous salary than it would have a decade ago, which may affect your financial planning.
