INSS cancels disability payments for retirees; understand – 10/20/2023 – Market

The INSS (National Social Security Institute) will no longer charge the amounts paid in excess to policyholders who retired due to disability after the Social Security reform, but received a higher amount of sickness benefit before having the permanent disability benefit granted.

The measure is in an ordinance published by the body at the beginning of October and aims to comply with what was determined by the Court in a public civil action in Espírito Santo.

According to the document, the discounts being made must cease to exist and new charges cannot occur.

The reason for the refund of the amounts is that the Social Security reform changed the calculation of all pensions, including disability pensions, today called permanent disability pensions.

As a result, the person retired due to disability receives a lower amount than the insured person who has sickness benefit.

According to lawyer Adriane Bramante, president of IBDP (Brazilian Institute of Social Security Law), the rule will benefit policyholders who received sickness benefit and had a court decision ordering the INSS to grant disability retirement from the initial date of the aid.

“In that case, how can he [o segurado] received sickness benefit, which is 91%, going back and paying the disability, in fact, he would have to return money, because the disability ends up being less than the benefit”, he says.

“Due to the change in amendment 103 of 2019, there was a discussion that if the disability was recognized from the period prior to the request for sickness benefit, the insured would have to return amounts, since the value of the disability is lower than the benefit for temporary incapacity, the old sickness benefit. That’s absurd,” he says.

“And this ordinance says that what was received in excess by the insured should not be returned”, he says.

Rômulo Saraiva, pension specialist and columnist for Sheet, says that this disparity occurs because of the reform. “In a situation of migration from sickness benefit to disability retirement, there may be a difference in calculation”, he states.

Understand what has changed

Before the Social Security reform, the insured person who retired due to disability received 100% of the average salary as a pension. To calculate the average, the INSS considered the 80% highest contribution salaries and discarded the lowest 20%.

After the reform, the disability retiree receives 60% of the average salary plus 2% for each additional contribution beyond the minimum time required. The calculation of the average salary has also changed.

Previously, the lowest 20% of salaries received in reais were discarded. Now, Social Security considers 100% of salaries since July 1994, which reduces the average.

In general, this type of retirement is usually paid after the worker receives sickness benefit and is unable to recover from their temporary disability, leading to their retirement due to permanent disability.

Furthermore, with the Social Security reform, the calculation of sickness benefit, which has not changed, can guarantee a higher benefit value than disability retirement.

For cases in which the citizen retired due to disability after retirement, with sickness benefit being granted also after the changes to the INSS, and where the value of the aid is greater than that of retirement, there is no refund or review.

The citizen will, in fact, receive a lower amount if the calculation of his average salary is correct.

The ordinance also mentions that cases in which the disability pension paid before the reform underwent review in which the value was reduced due to changes in legislation must be “timely” resolved.