Social Security Council reduces payroll interest ceiling for INSS beneficiaries

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Maximum rate for loan with payroll deduction will be reduced from 1.76% per month to 1.72% per month. The cycle of cuts to the ceiling began in March 2023. The National Social Security Council (CNPS) approved this Wednesday (28) a new reduction in the maximum interest rate charged on loans granted to retirees and pensioners of the National Social Security Institute ( INSS). It is the sixth reduction since March 2023. (see below) In the case of conventional payroll loans, with payroll deduction, the ceiling was reduced from 1.76% per month to 1.72% per month. For credit card and benefit card operations, the maximum interest rate increased from 2.61% per month to 2.55% per month. When offering the line, banks and financial institutions need to respect the limits established by the CNPS but, in an audit released last week, the Federal Comptroller General (CGU) identified rates above the ceiling in more than a fifth of the contracts analyzed. Reductions since March 2023 The cycle of reductions in the ceiling began in March, when the CNPS decided to reduce the conventional payroll interest ceiling for INSS beneficiaries from 2.14% to 1.70%, which generated an impasse with the banks . At the time, Banco do Brasil, Caixa Econômica Federal and other private banks temporarily suspended the offer of this credit, stating that the rates would not cover the costs of the operation. The council then approved a ‘middle ground’, and the ceiling was set at 1.97%. In August, there was a further reduction, and the interest ceiling went from 1.97% per month to 1.91% in the case of conventional payroll loans. The CNPS decision came days after the Central Bank’s Monetary Policy Council (Copom) reduced the Selic rate for the first time in three years. The Council has maintained a line of reducing the payroll ceiling after reductions in the Selic rate — the last one occurred at the January meeting, when the rate was cut by another 0.5 percentage point, reaching 11.25%. Selic rate: understand what the basic interest rate of the Brazilian economy is In October, the CNPS made a further reduction in the maximum interest rate for payroll deductions and the ceiling fell from 1.91% to 1.84% – again , the decision came after a new announcement of the Selic cut. In December, this ceiling was reduced from 1.84% to 1.80% per month. At the time, the decision was taken after an impasse between the ministry and representatives of the financial sector over the pace of reducing the payroll ceiling for INSS beneficiaries. In January, after new negotiations and following further reductions in the basic interest rate, the CNPS once again reduced the ceiling from 1.80% to 1.76% per month.

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