Reduction of the INSS queue pressures Budget at the end of the year

The faster reduction of the INSS (National Social Security Institute) queue poses an additional challenge to the Ministry of Economy in managing the Budget at the end of 2022.

If, on the one hand, the end of the waiting period can be beneficial for the insured persons covered, on the other hand, the granting of a greater volume of benefits puts pressure on government expenditures at a time when there is almost no room for manoeuvre.

technicians heard by Sheet state that there is fear of a new increase in the forecast of social security expenses in the bimonthly evaluation of November 22, when almost the entire Budget has already been executed and there is little room for possible cuts.

For this reason, the government adopted a more cautious stance and carried out a kind of preventive block on spending by all ministries scheduled for the month of December.

The idea is to prevent the bodies from starting the execution of these expenses ahead of time, making it impossible to later block any funds to avoid bursting the spending ceiling — a fiscal rule that limits the growth of expenses to the variation of inflation. It was this lock that reached, for example, the resources of the MEC (Ministry of Education).

The reduction of the INSS queue has gained traction in recent months, after the agency managed to unlock the release of resources to resume the payment of a bonus for extra analysis to its servers.

In October, the stock of cases to be analyzed by the agency dropped to 976 thousand. It is the first time that the queue is below 1 million in the Jair Bolsonaro (PL) government. The peak was recorded in July 2019, when there were 2.56 million pending applications. Earlier this year, the inventory was 1.76 million.

The accumulation of requests harmed policyholders and also the government’s image in the face of negative repercussions. At the same time, however, there was what technicians called the “political convenience” of avoiding an increase in expenses, consuming space for other expenses, such as investments or even parliamentary amendments.

Last year, the 2022 Budget proposal was sent to Congress without including a specific reserve of resources to contemplate possible reduction of the queue – configuring in practice an underestimation of expenses. Members of the Executive were warned about the risks of this conduct by technicians and economists outside the government, but the impasse was ignored.

The delay in analyzing requests for social security benefits results in a temporary postponement of public expenditures. When the INSS grants a retirement, for example, the benefit is paid retroactively to the period in which the insured submitted the request, with monetary correction.

In September, the government was forced to admit the impact. The social security benefits alone had an increase of R$ 6.6 billion in the forecast of expenses. Spending on BPC (Benefício de Prestação Continuada), an assistance benefit paid to the elderly and low-income people with disabilities, also increased by R$2.1 billion.

“Roughly speaking, we had growth of more than R$ 8 billion [por causa dos benefícios]”, said the special secretary of the Treasury and Budget, Esteves Colnago, in the interview with journalists that updated the forecast figures for the year.

With this change and the review of expenses with court rulings, spending on the RGPS (General Social Security Regime) should be R$ 795.3 billion this year. The amount is R$ 29.7 billion above what was initially foreseen in the Budget proposal for 2022.

To prevent this from happening again, the TCU (Union Court of Auditors) ordered the government, at the end of June, to incorporate a kind of provision in the Budget to contemplate the possible granting of new benefits that are currently awaiting a response from the government. In a technical note, the INSS itself lists this as one of the factors that can put even more pressure on expenses.

Also cited as a risk is “the growth in high levels of analysis of requests for social security benefits”. The INSS plan is to eliminate the waiting list by the end of the year. This means not having requests outside the analysis period (which varies according to the benefit), since zeroing in absolute terms is difficult, as there are always new requests coming in.

In May, the body’s president, Guilherme Serrano, presented a timetable to the Work, Administration and Public Service Committee of the Chamber of Deputies, in which he expected to achieve this objective by the end of the year.

“We have been working to leverage this analysis potential, reaching in October below 1 million cases, and by the end of the year we will deliver to society a queue of the monthly flow, the processes up to date”, said at the time the president of INSS

Despite the INSS’s public plans, technicians from the Ministry of Economy reported surprise with the increase in social security expenses in the September report. The government expected to release funds, but ended up having to block BRL 2.6 billion on the eve of the election.

To try to avoid a ceiling burst in the November report, the Ministry of Economy also made a preventive blockade of the bodies’ appropriations planned for the month of December. The measure, however, has generated even more wear and tear for the government.

The MEC alone suffered a limitation of R$ 2.4 billion, which triggered protests from entities linked to universities and federal institutes. The Minister of Education, Victor Godoy, had to call the Minister of Economy, Paulo Guedes, and the ministry unlocked R$ 665.2 million from these institutions.

The government has also not yet managed to find space in the Budget to release resources from rapporteur amendments, used as a bargaining chip with Congress in political negotiations.

The faster reduction of the INSS benefit request queue is observed in the midst of questions from policyholders. The agency has used digital tools for automatic analysis to gain speed, but the IBDP (Brazilian Institute of Social Security Law) reports having received numerous complaints of undue dismissals.

According to experts, the analysis carried out by robots has increased unnecessary dismissals and expanded the queue of workers who file an appeal and, in practice, continue to wait for the benefit.

Since the beginning of the year, there has been a 27% increase in requests for resources at the CRPS (Social Security Resources Council). In January, there were 590,400 cases and the number rose to 750,511 in July – the most recent data available.

“It is believed that the institution of the robot that analyzes the processes can lead to an even greater reduction, as it accelerates the analysis. However, reports reveal that the analyzes are being very harmful, as they do not analyze the requests in full – including annotation of time [registro dos períodos trabalhados]from contribution salaries, from rural time to urban retirement—and they are generating denials”, says IBDP vice president Diego Cherulli.