Pension bonuses and IRS relief approved this week: What do you know?

O Government will implement and approve this week, in the Council of Ministers, the bonus for pensioners and the relief of the IRS, which will come into force later this year, as the Prime Minister, Luís Montenegro, announced last week. 

Montenegro announced the award of an extraordinary supplement for pensioners who receive up to EUR 1,611 and a tax relief up to the sixth tier of the IRS.

The announcement was made by Luís Montenegro in opening the debate in Parliament on the motion of censure of the Aquis to the Government, saying that the two measures will be implemented in the Council of Ministers this week.

“The first: assign a extraordinary supplement to pensioners progressively up to eur 1,611,13, which represents a value of around eur 400 million that will be paid together with the december pension,” he said.

The second, intended to “support the middle class, will be “one iRS reduction up to the sixth step, a value of eur 400 million”.

“ This decline covers, in practice, all IRS taxpayers, even those who are above incomes, given the progressive nature of the tax. This tax relief will already be felt with a reduction in the retentions of the source in November, in the salary and Christmas subsidy ", said.

According to the Prime Minister, the two measures “will cover more than two million pensioners and more than two million households.”

“ And they are only possible thanks to the economic performance of the country and the sound financial and budgetary management of the government. We are not talking about more debt, we are not talking about illusions for the future”, he said.

Montenegro has ensured that this will not compromise the right accounts, saying that “ruling responsibility is knowing how to distribute the results without destroying the conditions that made them possible.”.

“ We in the government do not accept the false choice between right accounts and social justice. We prefer fair accounts, the condition to support those who need, reduce taxes and protect the country in the most difficult moments ", said.

New cut on the IRS reaches two million families and is worth 400 million

The chief executive (PSD/CDS-PP) said that the reduction of the rates that the Government will propose to the Assembly of the Republic will cover the first six income steps and will be reflected in wages and pensions in November, through a decrease in withholding tax.

 
 
If it is approved in parliament, this will be the third time that the governments of Montenegro have proposed and managed to ‘green light’ to apply additional reductions of IRS in the middle of the year, after it took place in 2024 and 2025. The other two coincided with the beginning of the year with the entry into force of the State budget.

In 2024, after a degravation in force since January with the last State Budget (OE) of the Government of António Costa (PS), the parliament out of the legislative elections of 2024 gave ‘green light’ to a reduction of IRS at the middle of the year, with a decrease in the rates up to the sixth step.

At the time, the drop resulted from a proposal from the PS, after failing an initiative from the PSD and CDS-PP that only reduced the rates of the 6th, 7th and 8th steps.

In January 2025, the IRS rates remained, but an update of the income levels was approved by 4.62% and an increase in the specific deduction of employees and pensioners (from the value subtracted from tax income).

In the middle of 2025, after the laws of which the second executive of Luís Montenegro resulted, there was an additional reduction of the IRS, from the 1st to the 8th step, translated in the retentions at the source.

In January 2026, in addition to updating the values that define the echelons, the rates returned between the 2nd and 5th step (in 0.3 percentage points).