With the recent worsening of the COVID-19 pandemic, the Government in Portugal has announced that it will broaden the criteria for allocating support to renters who need assistance in 2021 due to the COVID-19 pandemic after losing income. The ordinance published in the Official State Gazette defines new rules for the granting of loans, namely the reduction, from 35% to 30%, of a tenant's effort rate for the payment of rent, and which serves as a reference for the purpose of access to this exceptional scheme. Let's have a look at the changes made to this COVID measure in Portugal.
This financial support, it should be recalled, is based on the granting of interest-free loans by the Housing and Urban Rehabilitation Institute in Portugal (IHRU), aimed at supporting the payment of rent by tenants who have a proven drop in income of more than 20% as a result of circumstances related to the epidemiological situation caused by the pandemic, "demonstrated by comparing the sum of household members' income in the month in which the decisive cause of the income change occurs with the income received by the same household members in the month of February 2020, the previous month or, in the cases referred to in the following paragraph, the same period of the previous year", as can be read in Ordinance No. 26-A/2021.
The following groups are now eligible for rental support in Portugal:
- Tenants of housing which is their permanent residence, when the percentage of the total monthly income of the members of their household that is destined to the payment of the monthly rent of housing is equal to or greater than 30%;
- Students with a rental contract for housing situated at a distance of more than 50km from the permanent residence of their household, for the purpose of attending an educational establishment, when the percentage part of the total monthly income of the members of their household that is intended for the payment of the monthly rent for housing is equal to or more than 30%;
- Guarantors of tenants who are students and do not earn income from work, when the percentage part of the total monthly income of the members of the guarantor's household intended for the payment of the monthly rent of the student's dwelling is equal to or greater than 30%.
Take note that proof of loss of income must be submitted to the IHRU within 60 days of the date of submission of the application. The monthly rent to be taken into account is that shown by the monthly rent receipt, and the financial support granted to the borrower ceases if there is an addition or a new contract involving an increase in the monthly rent of the dwelling. Anyone who moves house without justification also risks losing rental support in Portugal, however, an "increase in the household" or if the landlord does not agree to renew the previous contract are accepted as justifications.
Proof of income breakdown every three months
The ordinance also states that tenants will have to prove a drop in income of more than 20% every three months. "Borrowers must send proof of continued income loss to the IHRU in the month following each quarter in which they benefit from the loan", the document states. Failure to provide such proof or proof that the income reduction requirement is no longer met will result in the cessation of rental support from the following month.