OE2024. How much can I save next year with the changes?
With the new measures outlined in the State Budget of 2024, which value the salaries of the Portuguese, how much can we save in total? According to the new changes that strengthen incomes, let's see the savings generated by each one, but also how much you can save if you have a mortgage and transfer it.
Looking to save in 2024? Poupança no Minuto can help you with your credit and insurance portfolio, at no cost, just contact them. But first, understand how much you can save next year with the changes planned by the Government to Portuguese incomes, compared to what you can save with a credit transfer.
New income reinforcement measures: How much can I save?
With the presentation of the proposal for the new State Budget for 2024 (OE2024), the Finance Minister, Fernando Medina, confessed that "one of the pillars is to reinforce the income of the Portuguese", as can be read in a publication by Notícias ao Minuto.
To increase salaries, and according to information from the news platform, here's what you can save with each measure:
Horizontal reduction of IRS
Facing the proposal for amendment regarding IRS, with a greater focus on households with gross income up to 2,000 euros per month, households will be able to benefit from a reduction in the average rate up to 2.4%. This is "through the protection of the national minimum wage, as well as through the reduction of the average tax rate for all income brackets," explains the news website.
Increase in the National Minimum Wage
Another of the planned measures is the increase of the National Minimum Wage from 760 euros to 820 euros in 2024. This 8% increase allows for a gross annual salary of 11,480 euros, plus 840 euros annually. In addition, the Government also states that, in 2024 and during the minimum subsistence mechanism, households with the minimum wage will not pay IRS.
Appreciations in Public Administration
Also, public sector employees will be entitled, in 2024, to salary increases corresponding to an "increase of at least 52.63 euros or 3% per month, whichever is higher in their base salaries".
Extra paid work
Employees who perform up to 100 hours of overtime annually will be entitled to the following compensation: "25% for the first hour or fraction thereof and 37.5% for each subsequent hour or fraction on a normal working day; 50% for each hour or fraction on a weekly rest day, mandatory or additional, or on a holiday". When overtime exceeds 100 hours, they will be entitled to "50% for the first hour or fraction thereof and 75% for each subsequent hour or fraction on a normal working day; 100% for each hour or fraction on a weekly rest day, mandatory or additional, or on a holiday", as reported on the platform's news.
Reduction of meal allowances and transportation subsidies has been eliminated
To help strengthen the incomes of the Portuguese, in 2024 the Government will also eliminate the reduction that was in force, related to the value of daily allowances and transportation subsidies, in order to further restore the rights of the Public Administration.
Increased deduction of union dues
Currently, union dues are deducted from gross earnings of dependent work and pensions, up to 1% of gross earnings for each category, at 50%. In this OE2024, an increase in this deduction from 50% to 100% is therefore planned.
And how much can I save with a credit transfer?
But have you ever thought that, if you have a home loan, there are other solutions that you can invest in for 2024 that allow you to achieve even greater savings?
The mortgage credit transfer was a procedure commonly done by Portuguese people in 2023 to lower monthly payments.
If you have a variable rate, indexed to Euribor and pending subsequent increases, by transferring credit to a new bank you may have access to campaigns with favorable mixed rate conditions for savings in this product.
Nowadays, there are banks running campaigns that allow fixing the interest rate for 2 years (period in which it is expected that Euribor rates will continue to rise), and then return to the variable rate (when it is expected that Euribor will stabilize again). This type of fixed-rate solutions allows for greater savings currently compared to the variable rate.
Practical example
But let's take a practical example to better understand the impact, through a couple who made a home loan credit transfer with the help of our credit intermediaries at Poupança no Minuto.
The couple had a debt capital of 285 thousand euros, a contract maturity period of 30 years, a variable rate indexed to the Euribor at 12 months, and a spread of 1.40%, with a monthly installment of 1,141.73 euros.
Requesting new simulations with new financing conditions from other banks, the couple obtained a new proposal with a mixed rate, in which their rate was fixed for the next two years. With the same credit conditions, they managed to pay a monthly installment of 881.43 euros. This resulted in a savings of 260.30 euros monthly and 3,123.60 euros annually.
If you are in the same situation and the savings achieved by the new measures planned for 2024 are not enough, contact us. We can help you save not only through a home loan transfer, but also with your other loans and/or insurance. Poupança no Minuto offers a free mediation and mediation service for the client, and allows for support throughout all procedures. Enter 2024 with the right savings!