On May 5, 2025, Minister of Labor and Employment Luiz Marinho announced in Brasília that the government of President Luiz Inácio Lula da Silva is actively addressing issues related to unauthorized deductions from the benefits of retirees and pensioners of the National Institute of Social Security (INSS). This announcement came during the opening of the Work Week, organized by the Ministries of Labor and Employment and Health.
Marinho explained that illegal deductions for association fees from retirees' benefits have been occurring since 2019. He emphasized that the government is now equipped with the necessary tools and support from the Ministry of Justice, the Attorney General's Office, and the Comptroller General's Office to rectify the situation. "What President Lula is doing is a change that provides the tools, authorization, and backing to take all measures to resolve the problem," Marinho stated.
In recent developments, the INSS opened administrative proceedings against 12 entities implicated in a Federal Police investigation concerning fraud in retirements and pensions. The INSS aims to ascertain potential administrative responsibilities attributed to these entities, which have been accused of making unauthorized deductions. The deadline for concluding these investigations is set for 180 days.
The Federal Police is investigating a staggering R$ 6.3 billion fraud affecting INSS retirees and pensioners. This investigation has revealed that the improper deductions were not isolated incidents; they are part of a broader scheme involving 31 entities suspected of making unauthorized deductions. Among the 12 entities targeted by the INSS, six are also under investigation by the Federal Police.
Gilberto Carvalho, the National Secretary of Popular and Solidarity Economy (Senaes) of the Ministry of Labor and Employment, provided insight into the government’s swift actions, noting that the investigation was initiated internally. "The report did not come from outside the government. It came from the CGU, which has been investigating for some time, followed by the Federal Police, which is also led by the government. It’s important to highlight that this is a government that self-audits," Carvalho said.
One of the key measures being implemented is the restitution of improperly deducted funds to affected retirees and pensioners. Marinho assured that the government is committed to ensuring that retirees will not suffer financial losses due to these illegal deductions. "The retired person can be assured that they will receive their money back. I cannot say it will be tomorrow because we need to follow legal processes, but President Lula's decision is clear: no retiree will incur losses in this story," he added.
The INSS is currently formulating an Exceptional Reimbursement Plan for those who have been victims of unauthorized deductions by associations. This plan is under discussion by a Special Group established by the Attorney General's Office (AGU), with support from Dataprev and the INSS itself.
The scandal surrounding unauthorized deductions has drawn significant public attention, particularly as it affects a vulnerable demographic. Reports indicate that retirees from rural areas represent 67% of the victims of this fraud scheme. Many of these individuals face challenges in accessing information about their deductions, highlighting the need for effective communication and support from the government.
In a related development, the Brazilian Association for the Defense of Clients and Consumers of Financial and Banking Operations (Abradeb) has filed a lawsuit against the INSS, seeking R$ 112.3 billion in damages due to the undue deductions made by non-profit associations. Abradeb estimates that approximately R$ 300 million are being diverted each month from retirements through illegal deductions, impacting more than 7.8 million retirees and pensioners over the past decade.
As part of the ongoing investigations, the Federal Police have also expanded their focus to suspicious payroll loans made through the INSS. This line of inquiry has revealed that nearly R$ 90 billion in payroll loans were released to INSS beneficiaries in 2023 alone, raising concerns about the legitimacy of these loans and their connection to the fraudulent deductions.
Audits conducted by the Tribunal de Contas da União (TCU) uncovered over 35,000 complaints regarding improper loans in 2023, indicating a significant issue within the system. Investigators are exploring potential links between unauthorized charges by associations and the issuance of loans without the retirees' consent.
The gravity of the situation has led to significant personnel changes within the INSS. Following the revelation of the fraud, President Lula dismissed Alessandro Stefanutto, the president of the INSS, on April 23, 2025. The then-Minister of Social Security, Carlos Lupi, resigned on May 2, 2025, amid growing pressure related to the scandal.
In light of these developments, the government has suspended the Technical Cooperation Agreements of the entities associated with the INSS, halting all deductions made from the payrolls of retirees and pensioners. The government has urged individuals who identify unauthorized deductions to report them via the "Meu INSS" app or website for automatic removal of the charges.
As the investigations continue, the government remains committed to ensuring that justice is served and that affected retirees receive the compensation they deserve. The situation serves as a critical reminder of the importance of oversight and accountability in protecting the rights and benefits of some of society's most vulnerable members.
