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The second half of the year is about to begin, and important changes to the Severance Indemnity Fund (FGTS) system may be introduced. At least that is what Labor Minister Luiz Marinho (PT) said. In recent interviews, he said that discussions regarding the end of birthday withdrawals should be left for the second half of the year.
“We are studying this and discussing it with the leaders and with Minister Padilha (Institutional Relations), who coordinates actions with the National Congress, to determine when to submit this measure for consideration by Parliament, but this should be done in the second half of the year”, Marinho stated, recalling that congressional support will be necessary to approve the measure.
In another interview on the same day, the FGTS birthday withdrawal was described by Marinho as an “injustice,” and it was assured that he would work to get Brazilian lawmakers to help approve a series of changes to the Severance Indemnity Fund. So far, however, discussions on the matter have not yet begun.
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“My commitment as Minister of Labor is to put an end to this injustice,” he stated in an interview with Canal Livre, on Rede Bandeirantes. “We will put an end to this injustice, but to do so it is necessary to amend the law.” Even though the debates have not yet begun, the Minister believes in the sensitivity of the National Congress.
What is the birthday withdrawal?
But after all, what is the birthday withdrawal and why is the Minister of Labor so eager to eliminate it? First of all, it is important to remember what FGTS is. It is a fund belonging to the worker, but it can only be used by the employee at specific times, such as in a dismissal without just cause, for example.
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However, there is another option: opting for the birthday withdrawal. Those who choose this withdrawal method gain the right to access money from the Severance Indemnity Fund once a year, in their birthday month or the following two months.
As mentioned, this is only an option. Workers who do not choose the birthday withdrawal system continue following the termination withdrawal process, which is the traditional scheme. Thus, they continue receiving FGTS only at specific times, such as in the event of dismissal without just cause.
Before opting into the birthday withdrawal scheme, it is important to remember that, while this option is in effect, it will apply to all employment contracts. Therefore, even if the worker starts at a new company, they will continue to be governed by this withdrawal method unless they request a change in the process.
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What is Marinho’s criticism?
This, incidentally, is one of Marinho’s main criticisms. The Minister of Labor claims that the current birthday withdrawal system is
unfair because workers who opt for this scheme end up losing the right to receive the money in the event of dismissal without just cause and usually have to wait a long time if they change their minds and return to the termination withdrawal option.
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“Workers who opt for the FGTS Birthday Withdrawal may, through the FGTS app, request to return to the Termination Withdrawal option, provided they do not have an advance withdrawal operation contracted. However, this change will only take effect from the first day of the 25th month after the date of the request to return,” the text of the law states.
“This is a trap, currently leading many workers to be unable to withdraw (the full amount) in the event of dismissal because of this limitation. Therefore, these are limitations introduced by the legislation and they will be corrected,” said the Minister of Labor and Employment, who plans to speak about the matter again in a few days.
