"FGTS" (employee severance fund): withdrawal at date-of-birth will have new rules

The number of advance payments, amounts, and deadlines will be limited to ensure the Fund's sustainability and reduce risks to workers

Effective November 1st, new rules limiting early withdrawals from the FGTS (Brazilian Severance Indemnity Fund) anniversary program have come into effect. The changes were unanimously approved by the FGTS Board of Trustees (CCFGTS) earlier this month and aim to ensure the Fund's sustainability and protect workers' assets.

According to the Ministry of Labor and Employment (MTE), the changes should redirect approximately R$ 84.6 billion to workers' accounts by 2030, an amount that would currently remain in financial institutions due to early withdrawal operations. Caixa Econômica Federal (Brazilian Federal Savings Bank) reported that it is already making the necessary adjustments to its systems to implement the new rules.

What changes with the new rule?

Among the main changes are the limitation on the number of installments that can be advanced, the restriction on simultaneous operations, and the establishment of minimum terms for contracting. From now on, workers will be able to anticipate up to five birthday withdrawals (one per year) within a 12-month period. After this period, only three new installments will be allowed to be anticipated—a significant reduction compared to the current average of eight anticipations per contract.

Another important change is the minimum 90-day period between joining the birthday withdrawal program and the first credit operation. Previously, workers could request the anticipation on the same day they opted for the modality. Furthermore, only one operation per year will be allowed, eliminating the so-called "simultaneous operations," which allowed multiple active contracts at the same time.

The amount will also be limited: workers will be able to anticipate amounts between R$100 and R$500 per installment, totaling up to R$2,500. Until now, there was no restriction—it was possible to anticipate the entire account balance.

Understand the Impact on Workers and the FGTS (Brazilian Severance Indemnity Fund)

The Minister of Labor, Luiz Marinho, defended the changes, classifying the anniversary withdrawal as a "trap" for workers. According to him, 13 million people have blocked funds, totaling R$ 6.5 billion that cannot be withdrawn in case of dismissal without just cause.

"The anniversary withdrawal weakens the FGTS both as a worker's savings account and as an instrument for investment in infrastructure, housing, and sanitation," stated Marinho.

He recalled that, at the beginning of the year, the government had already unblocked R$ 12 billion in accounts to reduce the impacts of this modality.

Between 2020 and 2025, advance withdrawal operations totaled R$ 236 billion, and currently the Fund has 42 million active workers. Of these, 21.5 million (51%) have opted for the anniversary withdrawal, and about 70% have already carried out advance withdrawal operations with banks and financial institutions.

What is the FGTS Birthday Withdrawal?

Created in 2019, the birthday withdrawal allows workers to withdraw a portion of their FGTS account balance annually in the month of their birthday. Participation is optional, and the available amount is calculated based on a percentage of the total balance, plus a fixed additional amount that varies according to the available balance.

However, by opting for this modality, the worker loses the right to withdraw the full balance in case of dismissal without just cause, retaining only the 40% severance pay penalty. With the new rules, the government seeks to reduce worker debt and preserve the social and economic role of the FGTS.

Source: Contábeis