new Rules for FGTS Birthday withdrawal take Effect This Saturday
New regulations governing advance credit operations linked to the FGTS (Guarantee Fund for time of Service) birthday withdrawal come into effect this saturday. these changes, approved by the FGTS Board of Trustees, aim to preserve the liquidity and social function of the fund, according to the Ministry of Labor and Employment (MTE). The government is responding to concerns that the increasing use of the system as a credit source was weakening the fund’s balance and its role as a public policy instrument.
Previously, workers faced no limits on the number of advance operations, with some documented cases reaching as high as 639 simultaneous operations, as noted by the MTE. Under the new rules, workers will be limited to one operation per year, with a maximum advance of R$2,500 in the first year of the measure’s validity.
Further restrictions include a 90-day waiting period after opting for the birthday withdrawal before a worker can initiate their first advance operation. This contrasts with the previous system where advances could be requested on the same day as enrollment.
The number of birthday withdrawals that can be anticipated is also being curtailed. In the first year, workers can advance up to five birthday withdrawals. From the second year onwards, this limit is reduced to three birthday withdrawals. the minimum advance value will be R$100 per withdrawal, while the maximum will be capped at R$500 per withdrawal.
The interest rate for these advances remains capped at 1.79% per month, lower than the rate for payroll loans offered to public servants (1.8% per month).
The FGTS birthday withdrawal allows workers to annually withdraw a portion of their FGTS balance in their birth month. Though, opting for this modality means workers forfeit the right to withdraw their full FGTS balance in cases of unfair dismissal, retaining only the right to a 40% termination fine. The amount released for withdrawal is calculated based on a rate applied to the total balance,plus a fixed installment that varies depending on the available funds.
These changes are intended to strike a balance between providing workers access to credit and ensuring the long-term sustainability of the FGTS system, while also mitigating potential fiscal risks associated with unlimited advance payments.
