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INSS will stop the deductions made from disability retirees’ payments. Keep reading to understand this significant change.
The National Institute of Social Security (INSS) declared that it will stop collecting excess amounts paid by citizens who became entitled to disability retirement after the implementation of the Social Security Reform.
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The administrative measure, announced at the beginning of October, seeks to comply with a court order resulting from a class action lawsuit in Espírito Santo.
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INSS made deductions in cases where citizens received an amount of sickness benefit higher than expected before obtaining continuous incapacity retirement. The purpose of this new guideline is to stop current deductions and prevent subsequent charges.
How does this change by INSS impact retirees?
The implementation of the pension reform changed the way all retirement benefits are calculated. This includes disability retirement, now called continuous incapacity retirement. Therefore, this change resulted in reduced amounts for this specific category of retirement benefit.
Consequently, individuals who were beneficiaries and received sickness benefits were directly impacted, as the retirement benefit decreased in value by 91% compared to the sickness benefit.
The new guideline will benefit those who received sickness benefits and faced continuous incapacity, resulting in disability retirement. Adriane Bramante, head of the Instituto Brasileiro de Direito Previdenciário (IBDP), highlighted that, in many situations, the beneficiary would have had to reimburse amounts. However, the measure now determines that citizens do not need to repay the excess amounts.
And how does this affect sickness benefits 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 became entitled to 60% of their average salary, with an additional 2% for each extra year of contributions beyond the required minimum.
However, the reform kept the calculation of sickness benefits unchanged. Thus, in certain situations, the amount of this benefit exceeds that of disability retirement. Nevertheless, individuals who retired due to disability after the reform and whose sickness benefit exceeds the amount of their respective retirement benefit will not have to make reimbursements.
Furthermore, their retirement benefit will not be reviewed. Therefore, situations in which disability retirement granted before the reform had its amount reduced due to legislative changes will be addressed ‘appropriately’, as mentioned in the administrative measure.
