Portugal moves to exempt clergy abuse victim compensation from taxes

The Portuguese Parliament has taken a significant step toward exempting victims of sexual abuse by members of the clergy from taxation on their compensation. In a first-phase approval, lawmakers advanced a legislative initiative that would exclude these indemnities from the personal income tax (IRS).

The government, led by Prime Minister Luís Montenegro, introduced the bill with the aim of ensuring that financial compensation received by victims of abuse within Catholic Church institutions is not subject to taxation. If the initiative passes, compensation agreed upon under the regulations of the Portuguese Episcopal Conference and the Conference of Religious Institutes of Portugal, published in July 2024, would be excluded. The proposal also includes provisions for extending this exemption to financial compensation awarded under other recognized regulations, agreements, or protocols for sexual abuse against minors and vulnerable adults, as determined by a joint decree from the finance and justice ministers.

This legislative push aligns with similar proposals from other political parties, including the Bloco de Esquerda, Livre, and Chega, all of which were approved in this initial phase. These various proposals will now proceed to committee debate before a final vote in the full parliament. The urgency for such measures is underscored by a February 2023 report from an independent commission, which estimated that over 4,800 individuals may have been victims of abuse by members of the Portuguese Catholic Church over the past 60 years.

Adding to the context, the Portuguese Episcopal Conference announced on March 26 that it had approved compensation for 57 victims, with amounts ranging from 9,000 to 45,000 euros. However, this offer was met with strong criticism from Coração Silenciado, a leading association representing abuse survivors, which described the compensation as an "affront."