Amendment of the exceptional and temporary measures related to the COVID-19 pandemic

Legal Alert no. 129

On September 29th, 2020, the Decree-Law no. 78-A/ 2020 was published in the Portuguese Official, modifying the exceptional and temporary measures in response to the COVID-19 pandemic, making the twenty-first amendment to Decree-Law no. 10-A/2020, of 13 March, the fourth amendment to Decree-Law no. 10-J/2020, of 26 March, the first amendment to Decree-Law no. 20-F/2020, of 12 May, the first amendment to Decree-Law no. 37/2020, of 15 July, and extending the effects of paragraph 1 of Article 5-A of Decree-Law no. 10-I/2020, of 26 March.
The Decree-Law no. 10-A/2020, of March 13, is amended, providing for an extension, until December 31st, 2020, of the temporary procedure, provided therein, for hiring workers to establish fixed-term employment relationships for a period of four months, in bodies, agencies, services and other entities, including the public business sector of the Ministry of Health, to cope with the exceptional and temporary increase in activity related to COVID-19 disease.
With regard to Decree-Law no. 10-J/2020, of 26 March, which establishes exceptional measures for the protection of credits of families, companies, private charitable institutions and other social economy entities (“beneficiary entities”), the main changes noted are as follows:

• Beneficiary entities which, on October 1st, 2020, are covered by any of the envisaged support measures, will benefit from an additional and automatic extension of these measures for a further period of six months, between March 31st, 2021 and September 30th, 2021;

• Beneficiary entities may benefit from the effects of the support measures for a period shorter than the duration of the moratorium and, to this end, must notify this intention to the institution, at least, 30 days before the date on which they intend to cease their effects;

• Mortgage credit as well as housing leasing and consumer credit for education granted to natural persons and credits granted to the entities belonging to the sectors most affected by the economic impact of the pandemic, identified in the list of economic activity codes annexed to the new Decree-Law, shall continue to be eligible for the suspension of payment of interest, commissions and other charges during this additional period;

• For the other entities, as from April 1st, 2021, these support measures will exclusively cover the suspension of the reimbursement of capital, with the payment of interest being resumed;

• It is also determined that the distribution of profits, in any form, the repayment of credits to members and the acquisition of shares or quotas of their own by the beneficiary entities, determines the termination of the effects of these support measures;

• The regime of Decree-Law no. 10-A/2020 will now be in force until September 30th, 2021, without prejudice to the rules, for extending the maturity of credits, for adjusting and recalculating outstanding instalments, for mechanisms for resuming the original profile of repayment of credits in the event of default or execution of a pecuniary obligation by a third party, maintaining the configuration of the previous version of the law.

Decree-Law no. 78-A/2020 also amends the provisions of Decree-Law no. 20-F/2020, of 12 May, which provides for the exceptional and temporary regime relating to insurance contracts, establishing that it shall remain in force until March 31st, 2021, without prejudice to the period of production of the contractual effects arising from the application of certain provisions. The amendment also provides for a duty on insurers to disclose measures.

Decree-Law no. 37/2020, of 15 July, on social support measures under the Economic and Social Stabilization Program, is also amended by Decree-Law no. 78-A/2020, being the rules applicable to support for preventive measures in social responses and units providing social support modified.
It is envisaged that the expenditure to be made under the social action subsystem will become expenditure under protocols to be concluded by December 31st, 2020 for the carrying out of screening tests on professionals attached to residential structures. It is also foreseen that protocols will be signed to enable the maintenance of the social response activity within the framework of the implementation of measures for the prevention of COVID-19 disease through the coverage of expenditure on personal protective equipment, disinfection products and isolation materials, in institutions that present financial difficulties in securing this expenditure.

The above protocols are in force for a maximum period of six months.
Finally, Decree-Law no. 78-A/2020 extends until December 31st, 2020 the ban on live performance in indoor or outdoor venues of festivals and shows of a similar nature, provided for in Decree-Law no. 10-I/2020.

To access the full text of Decree-Law no. 78-A/2020, of 29 September, please click here.