Brazil’s government has issued an executive order easing FGTS withdrawal rules, allowing 12 million workers to access up to 12 billion reais ($2.04 billion). Workers dismissed since January 2020 will regain access to their severance funds despite previous restrictions. Payments are set to begin in March 2025 under this new policy.
The Brazilian government announced an executive order that temporarily relaxes rules governing workers’ severance fund, the FGTS. This measure is expected to allow approximately 12 million workers to access up to 12 billion reais (equivalent to $2.04 billion) from their severance accounts. Previously, a law enacted in 2019 permitted workers to withdraw a portion of their FGTS while forgoing other withdrawal rights.
Under the 2019 law, formal workers could withdraw part of their FGTS during their birthday month, but those who opted into this scheme forfeited the right to withdraw the remaining balance upon dismissal. They could only regain full withdrawal rights after a 24-month waiting period. The recent change, however, permits workers dismissed between January 2020 and the present to access their full FGTS balance, even if they had previously chosen the annual withdrawal option.
Payments from the FGTS are scheduled to begin in March. This measure is aimed at providing significant financial relief to workers who have been affected by these restrictions. President Luiz Inacio Lula da Silva’s administration has emphasized the importance of supporting the workforce during these challenging economic times.
In summary, the Brazilian government has introduced an executive order that eases restrictions for workers regarding severance fund disbursements. This measure will benefit several million workers by allowing greater access to their FGTS balances. As payments will commence in March, this initiative reflects the administration’s commitment to ameliorating the financial challenges faced by workers and enhancing their economic security.
Original Source: money.usnews.com
