The government has decided that the measure to loosen FGTS withdrawals will give workers the opportunity to withdraw funds every year, not only once. In addition, both active (current) and inactive (dormant) accounts will be contemplated.

The Minister of Economy, Paulo Guedes, said the initiative will submit about BRL 30 billion to transactions this year. Until next year, funds will reach BRL 42 billion.

“I said it was going to be around BRL 42 billion. That’s it. It should be about BRL 30 billion this year and about BRL 12 billion next year. But there will be news. More interesting things are coming,” said the minister.

According to Guedes, this measure will be recurring throughout the government. “The past government only released inactive accounts. We will release active and inactive [accounts]. They were only released once. We will release them forever. Every year.”

According to the agenda, the installments of the amounts accommodates requests from Caixa. The bank sees operational difficulties in releasing this many funds in a few months.

Caixa’s CEO, Pedro Guimarães, told Folha last week that a release of withdrawals would require operational adjustments by the bank and withdrawals could extend for months or even a year. In any case, he said, funds should be released in about a month.

In addition, the government underwent pressure from the construction industry. As FGTS funds the Minha Casa Minha Vida program, businesspeople expressed concern to the Federal Government about a possible cut in funds.

Following their meetings with President Jair Bolsonaro, Chief of Staff’s Minister Onyx Lorenzoni said that funds for popular housing would not be hampered.

Brazilian Presidency’s spokesman, Otávio Rêgo Barros, said the federal government should limit withdrawals to about BRL 500 this year. The measure should be released per account. Therefore, if workers are holders of different accounts, they may withdraw a higher amount.

Rêgo Barros also confirmed that, at this time, the government will not propose the reduction of the 40% fine over the balance paid to workers for unfair dismissal.

Over the weekend, President Jair Bolsonaro criticized the percentage (40%) that companies should pay workers in the event of unfair dismissal. In order to change this percentage, a supplementary law regulating the matter should be passed by a majority vote of the congressmen in the House and Senate.

In any case, the decision for annual FGTS withdrawals was aligned with the Ministry of Economy’s preference, which sought a permanent (rather than punctual) change to the FGTS.

Their goal in the agenda was to deflect from criticism that such measure could provide only a temporary growth to the country (i.e., an artificial and punctual growth).

As a result, the measure should release withdrawals for both active and inactive accounts. And always once a year. Withdrawal easements will be staggered according to the amount saved. Those with less, may withdraw a higher percentage.

Changes should also cause workers to make a decision. If they withdraw amounts every year, they would forfeit the right to withdraw funds all at once when laid off (in which case they would continue to withdraw installed amounts in later years).

Internally, the summit of the Ministry of Economy recognizes that the slow recovery of the economy and the tax crisis that reduced public investment were the factors that motivated the government to address changes to the FGTS. The goal is mainly to stimulate household consumption.

The special secretary of Finance, Waldery Rodrigues, argued that this measure would have to be maintainable.

“We understand that much of the tax problem we are going through, most errors were committed because too much focus was put on the demand. We are now looking for measures that allow the GDP to grow maintainably,” he said.

The measure for loosening FGTS withdrawals was abrupt amid declining official growth estimates, which fell from 2.5% at the beginning of the year to 0.81% recently.

But the government also argues that change will bring productivity gains in the labor market, avoiding (for example) situations where employees reach an agreement with their employers for being laid off and still receiving related funds.

One of the options discussed is that of private agents purchasing FGTS quotas to increase the fund’s profitability. However, according to a source in the economic team, this change should not be officially disclosed this week.

RULES

Today, the law governing the FGTS does not allow withdrawals from active fund accounts (regarding the current employment of workers who receive monthly deposits).

One worker can have one active and one or more inactive accounts, according to Otavio Pinto e Silva, a professor at USP and a partner at Siqueira Castro.

“The change the government intends to make requires amendments to law 8.036, a statutory law. Currently, withdrawals can only be released to inactive accounts, from terminated employment contracts, for example,” he says.

“Most likely, the government will send a Provisional Measure to the Congress providing for the possibility of provisional releases of the fund and leaving the regulation to the FGTS Board of Trustees,” he says.

“The main issue is that people who have free access to the released amount are unlikely to use it to invest or for savings. The fund is emptied and with less investment capacity to fund housing and home construction.”

For attorney Caio Madureira, a partner at Tortoro, Madureira & Ragazzi, the release of periodic withdrawals must be approved by law.

The government’s proposals to widen the possibilities for withdrawing amounts from the fund mean “a change to the FGTS purpose, which is no longer a guarantee to workers in cases of unfair dismissal and becomes an opportunity for saving,” he says.