Also, government workers' pensions higher than 600 euros a month will be reduced by about 10 percent.
Finance Minister Maria Luis Albuquerque said Tuesday the government aims to cut its spending by 3.9 billion euros in 2014.
Already, government employees work hours are being increased from 35 to 40 hours a week. And next year, the retirement age rises to 66 from 65.
Opposition parties and labor groups are demanding less austerity and more government spending to encourage economic growth.