STF sets judgment to decide on greater FGTS correction

The STF (Federal Supreme Court) scheduled a judgment for this semester to define whether workers are entitled to a greater monetary correction of the amounts deposited in the FGTS (Fund for the Guarantee of Severance of Service).

The process has existed since 2014, when the Solidarity party filed a Direct Action of Unconstitutionality against the correction of balances provided for by law, which is based on the so-called TR (Referential Rate). The action questions the updates made since 1999.

The rapporteur at the STF is Minister Luís Roberto Barroso, who in 2019 determined the suspension of all other cases in the Brazilian courts that discuss the incidence of TR as a correction index until the STF analyzes the merits of the action. The trial is scheduled for April 20.

Despite the fact that the case entered the half-year agenda, the process had already been on the trial calendar for at least two years previously and has not yet been the subject of deliberation by the STF.

For the party, the mechanism used is not capable of protecting workers from inflation. The FGTS is mandatory savings for workers with a formal contract that can only be withdrawn in specific situations, such as dismissal without just cause and for the purchase of their own home, and for this reason it can be stopped for years.

The FGTS balance is corrected by applying the TR plus 3% per year. TR is calculated from a formula with different variables. According to the Central Bank, it stayed at 0% from 2017 to 2021 and rose after that period – currently, it is at 2.4% per year.

Solidariedade claims that the STF adopted in other cases the understanding that the TR does not reflect the Brazilian inflationary process. In addition, he claims that Caixa benefits from the mechanism.

“Applying an index lower than inflation, Caixa Econômica Federal, as the fund’s manager, appropriates the difference, which clearly goes against administrative morality”, stated the party in the records.

The party asked that the monetary correction of deposits in FGTS accounts be made provisionally by the IPCA-E, by the INPC or by another inflation index until a normative act establishes an index considered suitable.

The Presidency of the Republic has already defended the constitutionality of existing norms. The AGU (Attorney General of the Union) says that the understanding was signed by the STJ (Superior Court of Justice), which established the thesis that the remuneration of accounts linked to the FGTS is disciplined by law that establishes the TR as a form of monetary restatement , “therefore, the Judiciary is forbidden to replace the mentioned index”.

The BC, admitted as a third party interested in the process, argues that the process lost its validity after legislation created in 2017 (in the Michel Temer government) that improved the profitability of FGTS accounts through the distribution of profits recorded annually by the fund.

Supreme Court announces trial of tax lawsuits

The STF has also scheduled judgments of other cases in the economic area, such as the one that will decide the effects of the Court’s decision on tax matters when there is, subsequently, a pronouncement to the contrary by the STF. The deliberation is scheduled for February 1st and the rapporteur is also Minister Barroso.

On March 22, actions are on the agenda that question the counterparts so that states and municipalities can adhere to the Fiscal Recovery Regime (RRF), which gives states more flexibility to pay debts with the Union and now requires, in exchange, adjustment commitments in public accounts. In this case too, the rapporteur is Barroso.

On the same day, the plenary must judge excerpts from the LRF (Fiscal Responsibility Law) that deal with the limit on personnel expenses, especially the sum of expenses with inactive and pensioners.

Some state audit courts have changed the concept of public expenditure on personnel and no longer include expenditure on pensioners and inactive persons and the IRRF (Income Tax Withheld at Source) within the limits of this item. This has allowed states to assume new financial commitments, increasing their level of indebtedness.

The Novo party, responsible for the election, says that article 18 of the LRF expressly includes expenses with pensioners in the total expenses with personnel. It also claims that it is not possible to exclude the IRRF from the sum of that calculation. The rapporteur for the case is Minister Alexandre de Moraes.

On April 12, actions are foreseen that question the Complementary Law that regulates the collection of the Differential Rate of the Tax on Circulation of Goods and Services (Difal/ICMS), foreseen in the Kandir Law and that allocates the ICMS to the state of destination of the merchandise corresponding to the difference to the rate of the state of origin.

On the same date, the trial of the lawsuit is scheduled to question alterations made in 1999 in the Law of Social Security Benefit Plans, such as the requirement of a grace period for usufruct of the maternity salary for taxpayers.