Brazil Eases Rules for Workers’ Severance Fund Disbursements

Brazil’s government has enacted an executive order easing FGTS withdrawal rules, potentially releasing up to 12 billion reais for 12 million workers. Employees dismissed since January 2020 can access their remaining balances despite previous withdrawal decisions. Payments begin in March 2025, reflecting the administration’s commitment to worker financial support.

The Brazilian government has issued a new executive order that relaxes the rules governing withdrawals from the workers’ severance fund, FGTS. This decision is expected to allow approximately 12 million workers to access up to 12 billion reais (around $2.04 billion) in funds immediately. Previously, workers could only partially withdraw their FGTS balance during their birthday month but lost the right to access remaining funds upon dismissal if they chose to do so.

Under the newly introduced provisions by President Luiz Inacio Lula da Silva’s administration, employees who were dismissed from January 2020 to the present may now reclaim their remaining FGTS balance, regardless of their previous withdrawal choice. This change aims to ease the financial burden on dismissed workers. The government has notified that the disbursement payments will commence in March.

The relaxed guidelines are part of broader economic strategies to provide support to workers who may face financial hardships during dismissals. This initiative is crucial for those who might have been adversely affected by the earlier restrictions on the FGTS withdrawals. The move reflects the government’s commitment to enhancing financial support for the workforce in Brazil.

In summary, the Brazilian government’s recent executive order facilitates enhanced access to severance fund disbursements for dismissed workers. By allowing individuals to reclaim their remaining FGTS balance regardless of prior withdrawal choices, this policy aims to provide substantial financial relief to millions. With expected payments starting in March, this measure signifies a strategic effort to support the workforce during challenging times.

Original Source: money.usnews.com