INSS: pension calculation is constitutional, decides STF – 06/26/2023 – Market

The STF (Federal Supreme Court) decided that the calculation of the death pension of the INSS (National Social Security Institute) after the 2019 pension reform is constitutional. According to the rule, those who become widowed are entitled to receive 50% of the benefit of the insured person who died, if retired, or of the disability retirement to which the insured person would be entitled, plus 10% per dependent, up to a limit of 100%.

A childless widow, for example, receives a minimum amount of 60% on the pension of the insured person who died or his disability pension.

The rule was questioned by Contar (National Confederation of Salaried and Salaried Rural Workers) in ADI (Direct Action of Unconstitutionality) 7051. For the association, there is damage to the widow of the insured person who died before retiring, since the pension would be paid on the amount of a simulated retirement.

The trial —held in the virtual plenary— came to an end last Friday (23). By eight votes, the thesis of constitutionality defended by the reporting minister of the case, Luís Roberto Barroso, won. The ministers Dias Toffoli, André Mendonça, Gilmar Mendes, Alexandre de Moraes, Cármen Lúcia, Luiz Fux and Nunes Marques voted with him.

The divergence had been opened by minister Edson Fachin, who has already voted against Barroso in other actions of the pension reform. For him, there are unconstitutional points in the new rules. In addition to Fachin, Minister Rosa Weber also judged the calculation as unconstitutional.

In his report, Minister Roberto Barroso points to the Social Security deficit, the increase in the population’s life expectancy and the drop in the number of children per woman as one of the factors that reinforce the need to carry out a reform, changing the rules.

According to him, in 2017, Brazil spent 10% of its GDP (Gross Domestic Product) to pay for retirement, pensions and other benefits, while OECD countries (Organization for Economic Cooperation and Development spent an average of 8% of GDP on year in 2015.

“Social Security reforms aimed at combating the deficit produce positive macroeconomic impacts that cannot be ignored”, says part of the text.

In the decision, the minister states that the calculation of the death pension in the Social Security reform is not unconstitutional because it did not disrespect any stony clause of the Constitution or the principle of human dignity. To reinforce the understanding, he states that the constitutional amendment 103 guaranteed that at least the minimum wage is paid when the calculation of the pension results in a lower amount.

“From the outset, I recognize that EC No. 103/2019 caused a relevant decrease in the value of the benefit, which will require greater financial planning from policyholders with dependents. This does not mean, however, that it has violated an immutable clause. It cannot be said that the essential core of the right to social security and the principle of human dignity offers precise parameters for calculating the pecuniary benefit”, he says.

According to lawyer Gisele Kravchychyn, director of judicial activity at the IBDP (Brazilian Institute of Social Security Law) and counselor at the OAB (Order of Lawyers of Brazil), the STF decision ends discussions on the calculation of the pension after the reform.

“On the issue of unconstitutionality, the Supreme would have given the final position in the sense that this new calculation format is constitutional. There are other possibilities for revision, but this issue specifically is pacified by the Supreme already in direct action of unconstitutionality”, he says.

Pension for death was impacted by at least three reducers

Prior to constitutional amendment 103, the death pension corresponded to 100% of the amount of the pension that the insured person received or that to which he would be entitled if he had retired due to disability on the date of his death. With the reform, the benefit became per quota. There is a family quota of 50% plus 10% per dependent.

In addition, there was a change in the calculation of the average salary and also in the account that is made for the payment of retirement for permanent disability, former disability retirement.

Like the other benefits, disability retirement, which previously corresponded to 100% of the insured person’s average salary, is calculated on 60% of the average salary plus 2% for each extra year of contribution beyond the minimum required.

In the case of the average salary, according to the old rules, the INSS used the 80% highest salaries of the beneficiaries since July 1994 —the date when the Real Plan came into effect— and discarded the 20%. Now, 100% of salaries are used, including minors, which reduces the average salary compared to the old norm.

According to Gisele, there was some hope that the calculation of the pension could be considered unconstitutional. “There was hope. In fact, we had two votes for unconstitutionality and many appeal groups were declaring the calculation unconstitutional”, she says.

Minister Edson Fachin voted for the unconstitutionality of part of the rules, with regard to the calculation of disability retirement, indicating that the old formula should be considered. “On the merits, I disagree with partially granting the request and declaring the unconstitutionality of the expression “or that to which he would be entitled if he were retired due to permanent disability on the date of death” of article 23, caput, of EC nº. 103/2019, in order to ensure that the calculation of the pension for death of those who are not retired uses, for setting the benefit salary, the regulation prior to the advent of EC nº. 103/2019″, he says.

For him, the lower amount to be paid in the pension accentuates social inequalities in the country. “This significant decrease relegates the family to helplessness and disregards the social contingency of the death.”

Other actions

There are still at least 12 other actions in progress in the Supreme Court that deal with the reform of the Social Security, all of them under the rapporteurship of Minister Barroso. One of them began to be judged on Friday (23) and can be completed by Friday (30).

In this action, the ministers discuss whether the institution of the minimum age in special retirement, the end of the possibility of converting special time into common and the change in the rule for calculating the benefit violate the Constitution or not.