INSS retirement adjustment reaches 10% with new inflation forecast

The Economic Policy Secretariat of the Ministry of Economy released this Wednesday (17) a new projection for the 2021 inflation. According to the report, the INPC (National Consumer Price Index) should close the year with an accumulated of 10 .04%, an increase of 1.64 percentage points in relation to the last forecast of the folder, in September (which was 8.4%).

The INPC is used by the federal government to define the readjustment of the minimum wage and the benefits of the INSS (National Social Service Institute). If this percentage of 10.04% is maintained, the national minimum wage will go from the current BRL 1,100 to BRL 1,210 in 2022. The INSS ceiling, on the other hand, will rise from BRL 6,433.57 to BRL 7,079.50 considering the forecast of the government.

The readjustment of the minimum wage impacts other benefits such as unemployment insurance, PIS/Pasep allowance and maximum value of lawsuits that can be filed in Special Federal Courts, for example. The value of the minimum wage is also used as a floor for pensions, pensions and sickness benefits for the INSS.

Measured by the IBGE (Brazilian Institute of Geography and Statistics), the INPC reached 11.08% in the 12-month period up to October. Considering only the state of São Paulo, inflation is even higher: 11.32%. From January to October 2021, the INPC has already registered an increase of 8.45% in the country.

The increase in the INPC reflects the rise in the cost of living of Brazilians throughout 2021. To give you an idea, in October 2020, the 12-month accumulated INPC was 4.77% —6.31 percentage points less than the current 11.08%.

In addition, the indicator considers the average inflation of a series of products and services. Some INPC sub-items had higher increases in October. The transport group, for example, rose 17.75% in 12 months, with emphasis on the 44.94% rise in fuels. The food group had an accumulated increase of 11.81%.

For those who are INSS beneficiaries and live on rent, the 10.04% readjustment is below the percentage that is generally used to readjust residential lease contracts, the IGP-M (General Price Index – Market). Measured by the FGV (Fundação Getulio Vargas), the IGP-M reached 21.73% in the 12-month period up to October.

The definitive index that will be applied to INSS retirements will only be known on January 11, 2022, when the IBGE will release the result of inflation measured from January to December of this year. When contacted, the Ministry of Economy stated that the secretariat’s next bulletin on forecasting inflation will only come out next year.

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