Portugal’s Taxpayers Foot €885M Sick-Pay Bill as E-Cert System Fails

Nearly €900 M left the public purse last year to pay for short-term illness, and the country’s top auditor warns that Portugal is footing a steadily larger bill partly because the digital paperwork meant to police the system is riddled with holes.

At a glance

• 57.3 % surge in spending on subsídio de doença between 2018-2023, reaching €885.2 M.

• 22.7 M electronic sick-leave certificates issued in the same period; many carried incomplete data.

• One-way data flow from Saúde to Segurança Social blocks automatic error correction.

• Auditors urge stronger IT links, tougher validation rules and a rethink of who pays the first days of leave.

The numbers behind the jump

The Tribunal de Contas calculated that the State’s outlay on illness benefits climbed from €562.8 M in 2018 to €885.2 M in 2023—an extra €322.4 M. The steepest annual leap, 22.1 %, was logged in 2020 at the height of the pandemic. Even after COVID-19 waves subsided, expenditure never fell back to pre-crisis levels.

Eight forces underpin this trend: higher employment, rising wages, ageing workers, long-Covid diagnoses, more generous coverage for carers, digital self-declarations of up to 3 days, stronger awareness of mental-health rights and persistent administrative glitches.

What the auditors found inside the files

While the switch to fully electronic certificados de incapacidade temporária was designed to speed up payments, auditors spotted 55 917 certificates with no location of issue, thousands lacking any diagnostic description and several that contradicted validity rules. Because the IT platforms of the Serviço Nacional de Saúde and the Instituto da Segurança Social still talk in one direction only, invalid records are not bounced back automatically for correction—forcing manual intervention and delaying payments.

Other red flags included duplicate certificates, inconsistent identity numbers, overlapping leave dates and the absence of real-time dashboards for managers. The Tribunal warns that such weaknesses open the door to fraud, speculative back-dating and chronic data-quality issues that cloud policy decisions.

Why the bill keeps rising

Beyond technical faults, structural shifts are inflating costs:

• Workforce growth: Portugal added roughly 400 000 jobs between 2018-2023.• Salary inflation: Average gross pay rose 21 % in the same span, lifting the replacement values paid during leave.• Older employees: The share of workers aged 55+ climbed from 18 % to 23 %, raising illness incidence.• Lingering pandemic effects: Long-Covid cases and postponed treatments continue to push up medical absences.

Economists note that illness benefits still hover near 0.3 % of GDP, modest by Nordic standards but double the ratio seen a decade ago.

How Portugal stacks up in Europe

Portugal’s replacement rate ranges from 55 % to 75 % of salary, depending on leave length. That sits mid-table in the EU. Yet unlike Germany, Italy or Belgium, Portuguese employers generally do not cover the first sick-pay days; the burden goes straight to public coffers after a three-day waiting period. Several member states have cut costs by imposing employer-financed “waiting wages”, shortening maximum benefit duration to 6 months or lowering caps for repeat absences.

The fixes on the table

The Tribunal de Contas recommends a multi-pronged plan featuring at least eight priority actions:

Full bidirectional data links between health and social-security servers.

Mandatory validation fields so certificates cannot be issued with blanks.

Real-time analytics to flag abnormal patterns by sector, region or practitioner.

Expansion of e-transmission to public-sector workers under the Regime de Proteção Social Convergente.

More frequent medical reviews for leave beyond 30 days.

Employer co-payment for the opening days of an absence, phased in to shield small firms.

Return-to-work programmes backed by occupational-health teams.

Stronger fraud penalties, including temporary suspension of issuing rights for doctors repeatedly breaching rules.

Voices from the ground

Union leader Ana Pires argues that many flaws originate in over-stretched family doctors who have “seconds, not minutes” to fill digital forms. Business confederation CIP counters that abuse “drives up wage costs” and supports partial employer funding coupled with active reintegration schemes.

General practitioner Rui Almeida says the proposed mandatory fields are “welcome” but warns that legacy software in some health centres still runs on Windows 7, hampering upgrades.

What happens next

The ministries of Work and Health have 180 days to deliver a joint action plan. If Lisbon can plug the IT gaps and rebalance incentives, officials estimate annual savings of €90 M-€120 M—enough to cover, for example, an extra week of paid parental leave. Failing that, the Tribunal cautions, the illness-benefit bill could pass €1 B well before the decade’s end, adding fresh pressure to a social-security system already grappling with demographic headwinds.

For households, the audit is a reminder that every medical certificate carries a public price tag, and for policymakers, it is a signal that digital transformation must be paired with rigorous governance—otherwise, Portugal risks paying not just for people’s recovery but also for avoidable data errors.