Government stops paying even low-value writs – 7/9/2023 – Panel SA

Data from the Federal Court show that the Union is unable to pay even the precatories of a food nature — those of lesser value and that have priority over the others because they are generally owed to ordinary citizens.

Precatories are government debt securities with people or companies with final court rulings.

The Constitution says that these securities of a food nature, referring to wages, salaries, earnings, pensions, social security benefits and compensation for death or disability, must be paid before all others. In this category, debts with over 60 years of age, people with a serious illness or people with disabilities also have preference in payment.

However, in the STJ (Superior Court of Justice) alone, 523 food court orders, totaling BRL 120.3 million, were not fully paid by the Union in 2022.

At the Regional Court of the First Region (TRF-1) —the largest of all, which covers 12 states and the Federal District—, 207 cases (R$ 70.6 million) were pending. No common writ was paid by the government within the scope of the court.

At TRF-2 (Rio and Espírito Santo), food payments were even paid, but 776 common (R$ 4 billion) were not paid. At TRF-3 (São Paulo and Mato Grosso do Sul), at least 10,000 food court orders were not settled.

The data were compiled by economist José Roberto Afonso in an opinion prepared at the request of the Federation of Industries of Rio de Janeiro (Firjan) and included in a lawsuit that questions the constitutionality of changes in the payment system of these debts before the STF (Federal Supreme Court).

The table shows that, nationally, the courts are paying precatories without standard and isonomy.

While some manage to settle the common ones, others don’t even realize the priorities.

“In theory, the order of preference should apply at the national level and uniformly, but when analyzing the database of the courts, referring to the 2022 financial year, and the 2023 budget, it is observed that it is not exactly happening like that”, says Afonso in the opinion.

The 2023 Budget Law indicates the snowball that this situation has become. Among the 257,282 precatories issued, less than half (113,729) were defined in 2023. The vast majority (78.3%) have amounts below R$ 240,000.

The action in the Supreme Court, filed by the Order of Lawyers of Brazil (OAB), questions changes inserted by constitutional amendments enacted in 2021 by Congress, under pressure from the Jair Bolsonaro government.

They imposed limits on the payment of precatories, with the aim of making room for spending. As a result, the stock of postponed debts has been accumulating and generating a snowball for future years.

On the other hand, as a way of reducing liabilities and the impact on accounts, new provisions of the law authorized the use of precatorios as a bargaining chip in business with the government. They can now be used to pay concession grants, buy public properties and settle debts with the Union.

The Lula government, however, suspended the application of these innovations while it elaborates a norm to regulate them. A draft ordinance, put under public consultation last month, creates several restrictions for its use as currency, which has been criticized by the market. The final document has not yet been published.

With Diego Felix

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