Companies have until December 31, 2026, to withdraw balances from the Work Compensation Fund (“FCT”), which was converted into a closed-end fund under Decree-Law 115/2023. These amounts may be used for housing support, investments agreed with employee representative bodies, certified training, and payment of up to 50% of the statutory severance owed when an employment contract is terminated.
What happens to unclaimed balances?
Any amount not withdrawn before the FCT is terminated will be transferred to the Guarantee Fund for Work Compensation (“FGCT”). Employers should plan ahead to avoid losing access to these funds.
Requesting a withdrawal
Withdrawal requests must be submitted through the Compensation Funds portal, specifying the amount, purpose and beneficiaries. The following annual limits apply: Up to two withdrawals for balances under €400,000 Up to four withdrawals for balances above that amount.
FGCT’s role
The FGCT’s role is to ensure employee protection. If an employer fails to pay statutory severance owed when an employment contract is terminated, employees may request payment of up to 50% of the amount due. Requests may be submitted by post or email, and a digital form is expected to be launched to streamline the process further.
For more information and practical guidelines, see our Legal Flash, Changes to Work Compensation Fund and Guarantee Fund for work compensation.
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