Government foresees changes in FGTS resources

The interim Minister of Labor, Francisco Macena, recently announced in an interview with G1 a new government proposal that could bring changes to many FGTS resources, mainly the birthday withdrawal. The expectation is that the changes, if approved, will begin to be applied at the beginning of 2025.

What is FGTS

The Length of Service Guarantee Fund (FGTS) was created in 1966 and is the right of every worker who offers his services under a formal contract. Every month the employer deposits 8% of the employee's salary into an account at Caixa Econômica Federal (public financial institution). The objective is to help the employee build assets or emergency reserves. This money can be withdrawn in the following situations:

• Withdrawal: when the beneficiary is dismissed without just cause. In this case, it is possible to withdraw the entire FGTS amount.
• Birthday withdrawal: part of the amount available in the FGTS can be withdrawn in the month of the birthday.

Changes to the FGTS

The changes foreseen in the government's proposal aim to facilitate and speed up access to FGTS resources, which will now be available through the application.

To date, anyone who chooses to use the birthday withdrawal feature loses the right to withdraw the full FGTS later. The current proposal is to replace the birthday withdrawal with a loan facility (where payment of installments is deducted directly from salary, retirement, etc.).

The FGTS would be used as a guarantee when taking out the loan, which can be done directly in the application, where financial institutions will present their loan proposals. Thus, the guarantee fund will not be compromised and the beneficiary will continue to exercise the right to withdraw it in full in the event of an emergency.

In this new line of credit, you will be allowed to commit up to 35% of your gross monthly salary. If the worker is fired and can no longer pay the loan, he will be suspended until a new job is found.

It is worth mentioning that the FGTS is also used to finance government initiatives relating to basic sanitation, housing, among other sectors. According to the proposal, the new resource will help in better administration and targeting of these funds.

_{National Congress (Photo: reproduction/José Paulo Lacerda/ CNI News Agency)}

The proposal has been vehemently discussed in the National Congress, as it could negatively impact the financial lives of many workers who choose to use the resource.

Featured photo: FGTS (Reproduction/Etalbr/Shutterstock/Olhar Digital)