Pension for death INSS STF: understand how it is calculated – 06/27/2023 – Market

The ministers of the STF (Federal Supreme Court) validated the calculation of the INSS death pension defined after the 2019 Social Security reform. In a trial that ended last Friday (23), the court voted for the constitutionality of the rule that reduces the benefit in half, frustrating the expectation of many policyholders.

According to constitutional amendment 103, a family quota of 50% is paid as a death pension on the benefit of the insured person who died, if he was retired, or on the disability retirement to which he would be entitled, plus 10% for dependents , up to a limit of 100%. Before the reform, the pension corresponded to 100% of the benefit.

The pension was the benefit that underwent the most changes in recent years. In addition to the reform, the rules were changed twice before the approval of the constitutional amendment. In 2015, the pension ceased to be lifetime, becoming temporary.

The duration started to be calculated according to the time of union or marriage and according to the age of the dependent. The requirement of grace period of 18 months of contributions from the insured person and 24 months of marriage or union was also instituted.

In 2019, more changes were implemented. More specific documents are now required to prove the couple’s stable union, for up to 24 months prior to death, and proof exclusively through witnesses is no longer admitted.

How is the death benefit calculated today?

• The pension is 50% of retirement plus 10% per dependent, up to a limit of 100%
• If the insured person is not retired, the pension is calculated on the pension for permanent disability —former disability pension— to which the citizen would be entitled
• The widow is considered a dependent. If she does not have minor children, she will receive 60% of her husband’s pension.
• If, after applying the quota per dependent, the amount calculated by the INSS is less than the minimum wage, a minimum wage will be paid to the dependent
• When there are disabled or disabled dependents, the death pension will be 100% of the pension that the deceased insured person received or of the disability pension to which he/she would have been entitled on the date of death

Check out the examples:

Number of Dependents	pension percentage	Example value for a retirement of R$ 3,000
1	60%	BRL 1,800
two	70%	BRL 2,100
3	80%	BRL 2,400
4	90%	BRL 2,700
5	100%	BRL 3,000

How was the pension calculated before the pension reform?

• For death until November 13, 2019, when the Social Security reform was published, the pension was equal to the retirement amount of the insured person who died
• If he was not already retired, the pension was his 100% of average salary, calculated on the highest 80% contributions since July 1994
• There was also no reduction by quotas. A childless widow received the same amount of benefit as a widow who had other dependents of the insured person who died
• If the insured person earned a pension of BRL 3,000, for example, or had an average salary of BRL 3,000, the dependents would receive exactly the same amount

How is disability retirement calculated after Social Security reform?

• Now, the insured person receives 60% of the average salary plus 2% for each year of extra contribution that exceeds the minimum 20 years, for men, and 15 years, for women.
• This means that an insured person with ten years of contribution to the INSS will be entitled to a disability retirement of only 60% of his average salary.
• The same rule applies to an insured person with 20 years of INSS payments.
• If you have 21 years of contributions, the percentage applied to the average salary will be 62%
• When there are disabled or disabled dependents, the reform establishes that permanent disability retirement will be 100% of the average salary

How does the INSS calculate the average salary?

• After the Social Security reform, the calculation of the average salary is based on all benefit salaries paid since July 1994, the date on which the Real Plan came into effect.
• Salaries previously paid in other currencies are not included in the calculation of the average salary
• Before, until November 13, 2019, the average salary was calculated on the 80% highest salaries after July 1994
• The lowest 20% were discarded by the INSS, making the average salary a little higher

What is the reduction in the value of the INSS pension after the Social Security reform?

One of the examples presented in the case judged by the Supreme Court shows how the pension is calculated after the Social Security reform and how much the benefit will be reduced

• A male insured who was still working before he died and had a salary of around BRL 6,000
• He had only ten years of contribution and, when he died, he left two dependents
• When calculating your average salary, the value would be R$ 5,000
• In the previous regime, this would be the value of the disability retirement, considered as the basis for the payment of the pension
• The pension for death would be R$ 5,000
• Under the current regime, on the other hand, disability retirement would be reduced to BRL 3,000 (60% of BRL 5,000)
• With this, the pension for death would be R$ 2,100 (70% of R$ 3,000)
• The family of the insured person who died would receive an amount equal to 35% of the worker’s earnings when he was active

Who can be a dependent to receive the INSS death pension?

The following may be considered dependents:

1. Spouse or partner
2. Children and stepchildren under the age of 21 or disabled, as long as they have not been emancipated
3. Parents, provided economic dependence is proven
4. Non-emancipated siblings, under 21 or disabled

Insured people living in a stable union need to prove the minimum union of two years, with documents that prove the life in common. The main one is the stable union certificate

Up to what age can dependents receive the death benefit?

• Before the Social Security reform, the spouse kept the entire amount of the pension after the children turned 21, when they stopped receiving the benefit.
• After the reform, the dependent’s quota payment will be cut when he turns 21 and will not be allocated to the widow or widower
• The widow or widower, however, cannot receive less than the minimum wage. If, when cutting the quota of a dependent, the value decreases, the INSS is obliged to pay at least the minimum wage
• In addition, since 2015, the death pension has a duration according to the age of the widower or widower.
• If the person is 45 years old or older, the benefit is lifetime, that is, paid for life.
• Between 2015 and 2021, the rule determined that the benefit would be lifetime for ages 44 and older; from then on, it became 45 years

Check for how many years the pension is paid according to the age of the widow or widower

Age (in years)	Pension payment term (in years)
Under 22	3
22 to 27	6
28 to 30	10
31 to 41	15
42 to 44	20
From 45	lifetime

Who is entitled to the INSS death pension?

• The death pension is a benefit paid to the dependents of the insured person who died, which can be a spouse or partner, children, stepchildren and parents.
• Those who are married or have a stable relationship with the insured person who died are dependents, provided they prove the marriage or union
• Benefit payment is temporary, depending on the age of the widower or widower on the date of death
• Furthermore, if the marriage or stable union was less than two years old, the pension is only paid for four months.
• It is also necessary to prove the lack of 18 months of contributions from the insured person who died and 24 months from the marriage/union to have the pension
• If the death occurs due to an accident of any nature, the lack of contributions and the duration of the marriage/union does not apply

What did the STF decide on the calculation of the death pension?

• In ADI (Direct Action of Unconstitutionality) 7051, the STF decided that the calculation that reduces the pension is constitutional
• With this, all actions of the type that discuss the rule must follow the same understanding
• The decision was taken by a majority of votes, between June 16th and 23rd, in a trial in the virtual plenary
• Seven ministers followed rapporteur Luís Roberto Barroso, who defended the constitutionality of the reform: Dias Toffoli, André Mendonça, Gilmar Mendes, Alexandre de Moraes, Cármen Lúcia, Luiz Fux and Nunes Marques.
• Two ministers disagreed: Edson Fachin, author of the contrary vote, who understood that there was unconstitutionality, and Rosa Weber, who accompanied his colleague
• The action was proposed in 2020 by Contar (National Confederation of Salaried and Rural Salaried Workers)