Brazil’s government has eased rules for accessing funds from the Workers’ Severance Fund (FGTS), allowing around 12 million workers to withdraw a total of 12 billion reais ($2.04 billion). This policy reversal enables dismissed workers from January 2020 onwards to retrieve their full FGTS balance, starting in March. Previously affected workers are expected to benefit from this change in policy.
On Friday, Brazil’s government announced a temporary easing of regulations regarding the disbursement of funds from the Workers’ Severance Fund (FGTS). This new executive order is expected to provide access to approximately 12 billion reais (approximately $2.04 billion) for around 12 million formal workers. This move is part of an effort to support workers facing economic challenges and to enhance their financial security.
Previously, a law enacted in 2019 allowed workers to withdraw a portion of their FGTS balance annually, specifically during their birthday month. However, by opting for this benefit, workers forfeited their rights to withdraw the remaining amount upon dismissal, with conditions allowing for reinstatement of withdrawal rights only after a 24-month period. This restriction posed financial hardships for many workers in case of job loss.
Under the recent amendments introduced by President Luiz Inacio Lula da Silva’s administration, workers dismissed between January 2020 and the date of the announcement are now eligible to access their full FGTS balance, regardless of whether they had previously chosen the annual withdrawal option. The government confirmed that the disbursements will commence in March.
In summary, Brazil’s government has implemented a significant change to the regulations governing the Workers’ Severance Fund, allowing a considerable number of workers to regain access to their full severance balances. This initiative, aimed at enhancing financial support for dismissed workers, will take effect in March and is expected to benefit millions. By temporarily relaxing the withdrawal restrictions, the administration seeks to address the financial needs of workers in the current economic climate.
Original Source: money.usnews.com
