The Brazilian government is set to implement new measures pertaining to the Fundo de Garantia do Tempo de Serviço (FGTS), allowing workers who elected the anniversary withdrawal option and were dismissed without just cause access to previously restricted funds. This new directive, confirmed by the Ministry of Labor and Employment (MTE), seeks to reinstate financial resources to millions of workers who have faced unemployment since January 2020.
On Friday, August 28, 2024, President Luiz Inácio Lula da Silva will officially publish this measure, which is anticipated to benefit approximately 12.1 million workers, releasing R$ 12 billion back to the economy. The funds will be made available automatically to the respective accounts of the workers through the FGTS platform.
The announcement of the regulatory changes is part of the government’s strategy to support those affected by job losses, particularly in light of economic challenges faced by many following the pandemic. Labor Minister Luiz Marinho has pointed out the significance of returning this financial security to individuals impacted by unemployment, reinforcing the essence of the FGTS as a safety net for workers.
The disbursement of these funds will occur in two phases. Initially, up to R$ 3,000 will be available for withdrawal. Should the total amount exceed this limit, the remaining balance will be accessible to workers 110 days post the measure’s publication. This structured release aims to provide workers immediate but limited liquidity, helping to alleviate financial burdens during periods of unemployment.
This decision marks the first significant alteration to the anniversary withdrawal policy since its implementation under former President Jair Bolsonaro's administration. Under the original terms, workers who opted for the anniversary withdrawal could only access their funds once they had concluded two years following their dismissal without just cause, only allowing access to the termination penalty instead of their complete FGTS balance.
The MTE's announcement highlights the rising urgency to rectify these restrictions. Sergio Nobre, president of the Central Única dos Trabalhadores (CUT), expressed, “This measure will benefit 12.1 million workers and will inject R$ 12 billion to the economy.” He emphasized the need for these funds, urging they will empower workers to manage immediate financial obligations.
Support from labor unions has also been pivotal as they advocate for the revision of previously stringent measures impacting job-seeking individuals. Miguel Torres, president of the Força Sindical, remarked on the previous two-year restriction, stating: “The restriction of two years should be reviewed, which is very important for us.”
Going forward, the MTE has clarified the stipulations of the new measure. After the initial two phases of fund releases, any workers who choose the anniversary withdrawal option and are dismissed will retain the inability to access their funds, which will remain frozen until subsequent anniversaries.
Historically, the anniversary withdrawal method was set up to allow individuals to extract portions of their accrued FGTS balance annually during their birth month. Although this provided workers with more frequent access to their funds, it also complicated the situation for those who faced sudden unemployment, as they had to wait to regain access to the bulk of their savings.
Overall, the impending changes are viewed as advantageous for workers and the economy alike. Integrative financial flexibility encourages consumer spending, potentially benefiting local businesses and aiding recovery efforts following economic setbacks. With these amendments, the Lula administration aims to reaffirm its commitment to worker welfare at a time of heightened financial strain for many families.