Government Aims to Distribute 100% of R$ 9.5 Billion Profit from FGTS to Workers

To Compensate the Limit of R$ 500 Per Account in Extra Withdrawals from FGTS This Year, the Government Announced That the Fund’s Profit Will Be Fully Distributed Among Workers.

The government announced that it will distribute 100% of the profit from FGTS to workers. Previously, by law, only half of the profit from FGTS was shared among the account holders – the amounts are credited proportionally to the balance of each account on December 31 of the previous year. The yield will remain equivalent to the Reference Rate (TR), plus 3% per year.

In addition to increasing the returns given to workers on the investments made by the fund, the government will allow an exceptional withdrawal this year of up to R$ 500 per account, as we at Click Petróleo e Gás announced yesterday, July 24.

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Caixa suggested a calendar for those who have already celebrated their birthday, with withdrawals starting on August 19. The agencies are expected to open over the weekend to serve the account holders.

“The previous government only released (the inactive accounts). We will release both active and inactive. They released it once, we will release it forever, every year there will be,” said the Minister of Economy, Paulo Guedes, shortly after participating in a ceremony with President Jair Bolsonaro about the natural gas market.

According to the Ministry of Economy, the measure has the potential to generate, in ten years, 3 million jobs and increase per capita Gross Domestic Product (GDP) by 2.5 percentage points.

According to data from the Credit Protection Service (SPC Brazil), the withdrawal of up to R$ 500 from FGTS accounts would pay off the debts of nearly 40% of Brazilian defaulters. The average debt of defaulters in the country is R$ 3,252.70, but a significant percentage of 37.4% owes up to R$ 500.

At the Ceremony, the Government Also Reported That:

• Those who have an account at Caixa, the bank will automatically deposit the amount;
• Those without an account at Caixa must follow the schedule that will be disclosed by the bank;
• Those with the Citizen Card will be able to make withdrawals at automatic terminals;
• Withdrawals of less than R$ 100 can be made at lottery outlets, upon presenting an identity card and CPF;
• A birthday withdrawal modality will be created (more information below)
• Those who opt for the birthday withdrawal may use the resources as collateral for personal loans;
• There will be no change in the 40% fine in case of dismissal without cause if the worker migrates to the birthday withdrawal;
• There will be no deadline for withdrawals from PIS-Pasep;

Starting in 2020, Workers Will Be Able to Choose a New Modality

Starting in 2020, a new FGTS withdrawal modality will be implemented, the birthday withdrawal. In this case, the higher the balance, the lower the percentage that can be withdrawn. The percentages will range from 50% to 5%, according to seven balance brackets, from R$ 500 to above R$ 20 thousand.

Those with up to R$ 500 will be able to withdraw 50% of the amount. Those with more than R$ 20 thousand will be able to withdraw 5%. The date of the withdrawals will vary according to the account holder’s birthday.

This modality also provides for an additional fixed amount beyond the established percentages. This extra portion starts to be paid in the bracket from R$ 500.01 to R$ 1,000. For example, in this bracket, the authorized percentage is 40% of the balance, but there is an additional amount to be paid of R$ 50.

Thus, those with R$ 750 in the account can withdraw 40% of that amount (R$ 300), plus the R$ 50 fixed amount. That is, R$ 350 in total. In practice, they can move 46.6% of the balance.

The same applies at the other end; for someone with R$ 25 thousand in the account, subject to the bracket authorized to withdraw 5% of the balance, they can withdraw 5% (R$ 1,250) plus an additional amount of R$ 2,900. Thus, the total amount would be R$ 4,150, which in the end sums up to 16.6% of the total balance.

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