INSS readjustment gets smaller with income tax discount

Retired Livino Ribeiro, 67, complains that his INSS (National Social Security Institute) benefit had a lower readjustment than the 10.16% announced by the government. According to Ribeiro, when comparing the final value of the benefit, after deducting the Income Tax, the readjustment was 10.06%.

The annual adjustment of INSS benefits considers the inflation of the previous year, measured by the INPC (National Consumer Price Index) and is applied to the gross amount of the benefit, that is, before discounts. Insured people who receive pensions, pensions and other benefits above the minimum wage had their income adjusted by the exact inflation rate of 10.16%.

For retirees and pensioners who had the benefit granted as of February 2021, the first adjustment was proportional, according to the month in which the payment started.

According to the INSS, the difference in Ribeiro’s payment does not refer to an error in the readjustment, but occurs due to the Income Tax that is deducted from the benefit. The agency reports that Social Security policyholders who receive more than the minimum wage had their benefits readjusted by 10.16%, according to the INPC, as was done with the retired Livino Ribeiro. “The reason the net value is lower is that there was a discount of R$ 3.99, referring to the Income Tax”, he informs.

The retirement payment statement, which can be consulted through the website gov.br/meuinss or the Meu INSS mobile app, shows the discounted amounts of the benefit. The extract can also be requested by calling 135.

It is important to pay attention to the tax bands before asking the INSS for a review. The most recent correction made to the table used to calculate the Income Tax discount is from 2015. Without the readjustment in the table, each time the value of retirement increases, even if there is no real increase in purchasing power, more taxpayers end up paying more IR.

According to Sindifisco (Union of Tax Auditors of the Federal Revenue), if the correction followed the IPCA (Broad Consumer Price Index), no taxpayer with monthly taxable income lower than R$ 4,427.59 would pay the tax.

Unafisco (National Association of Tax Auditors of the Federal Revenue) calculates that in 2022 the Revenue collects R$ 149 billion more than would be due if the values ​​were fully adjusted for inflation since 1996. The lag in the IR table in the Jair administration Bolsonaro (PL) reached a peak in the historical series, which began in 1996.

“The government announces the readjustment every January of each year and that increase doesn’t reach his pocket [do aposentado], precisely because the lion’s bite increased. He ends up paying more tax”, explains the editorial analyst of the IOB’s IR area, David Soares.

Today, taxpayers who receive up to R$ 1,903.98 are exempt from the IR, and retirees and pensioners who are 65 years of age or older have a special exemption —they are entitled to double the exemption on the benefit. For this category, the IR is only calculated on the amount that exceeds R$ 3,807.96 per month.

Tônia Galetti, coordinator of the legal department of Sindinapi (National Union of Pensioners, Pensioners and Elderly), argues that the Income Tax exemption should be extended to all benefit ranges. “The retiree has a higher cost of living and a lower purchasing power”, she justifies.

According to Tônia, 69% of the beneficiaries receive only one minimum wage (R$ 1,212). For these benefits, the readjustment is the same as the minimum wage, which rose from BRL 1,100 in 2021 to BRL 1,212 in 2022. To define the minimum wage for 2022, the government estimated inflation calculated by the INPC . According to experts, considering the registered inflation and the amount that had not been paid in the 2021 floor, the correction of the minimum wage in 2022 was R$ 1 below what was necessary to restore the purchasing power of workers.

See the readjustment and tax deduction on your retirement

The calculations were made by the IOB and the report of the Sheet January 2022, based on the current IR table.