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The INSS will stop deducting payments made to retirees due to disability. Read on to understand this significant change.
The National Institute of Social Security (INSS) declared that it will cease collecting excess amounts paid to citizens who acquired the right to disability retirement after the implementation of the Pension Reform.
The administrative measure, announced at the beginning of October, seeks to comply with a court order arising from a collective lawsuit in Espírito Santo.
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The INSS made deductions in cases where the citizen received a higher than expected amount of sickness benefit before obtaining retirement due to continuous disability. The purpose of this new guideline is to end the current deductions and prevent subsequent charges.
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How does this change to the INSS impact retirees?
The implementation of the social security reform changed the way all pensions are calculated. This includes disability pensions, now called continuous incapacity pensions. Therefore, this change resulted in reduced amounts for this specific category of pension.
Consequently, individuals who were beneficiaries and received sickness benefits suffered direct impacts, as retirement benefits decreased in value by 91% compared to sickness benefits.
The new guideline will benefit those who received sickness benefits and faced ongoing disability, resulting in disability retirement. Adriane Bramante, head of the Brazilian Institute of Social Security Law (IBDP), pointed out that in many situations, the beneficiary would have to repay amounts. However, the measure now determines that the citizen does not have to repay the excess amounts.
And how does this affect sick pay and disability retirement?
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Before the Social Security Reform, citizens who retired due to disability were entitled to 100% of their average salary. After this change, they were entitled to 60% of their average salary with an additional 2% for each additional year of contribution beyond the minimum required.
However, the reform kept the calculation of sickness benefit unchanged. Thus, in certain situations, the value of this benefit exceeds that of the disability pension. However, an individual who retired due to disability after the reform and whose sickness benefit exceeds the value of the respective pension will not have to make reimbursements.
Furthermore, your retirement will not be subject to revisions. Therefore, situations in which the disability retirement, granted before the reform, had its amount reduced due to legislative changes, will be addressed 'adequately', as mentioned in the administrative measure.
