STF changes understanding and overturns INSS “whole life review” thesis

The Federal Supreme Court (STF) changed its understanding and decided to overturn the Court’s own decision which, in 2022, authorized the lifetime review of pensions from the National Social Security Institute (INSS). The twist in the case occurred this Thursday (21) during the trial of two unconstitutionality actions against the Social Security Benefit Plans Law (Law 8,213/1991).

By 7 votes to 4, the STF decided that retirees do not have the right to opt for the most favorable rule for recalculating the benefit. The change of understanding occurred because the ministers judged the two unconstitutionality actions (ADIs) on the social security factor, and not the extraordinary appeal in which retirees gained the right to review, informed the Brazil Agency. As a result, the annulment of the Supreme Court’s previous decision was indirect.

When judging the 1999 social security rules constitutional, the majority of ministers understood that the transition rule is mandatory and cannot be optional for retirees according to the most beneficial calculation.

During the trial, the president of the STF, minister Luís Roberto Barroso, said that it is necessary to preserve the fiscal integrity of the social security system. “No one is happy not to favor the insured. We would all like to give as much as possible to everyone, but we also have to ensure the integrity of the system, he said.

In addition to Barroso, ministers Luiz Fux, Cristiano Zanin, Flávio Dino, Dias Toffoli, Gilmar Mendes and Nunes Marques also voted against the review. André Mendonça, Cármen Lúcia, Edson Fachin and Alexandre de Moraes voted in favor of the review.

Impact

The 2022 decision did not come into force, because the INSS appealed. In the action, the authority requested the modulation of the rule so that the recalculation cannot apply to extinguished benefits, final and unappealable decisions and installments already paid. The INSS defends the prohibition of paying differences before April 13, 2023, the date on which the STF judgment was published. This resource has not been analyzed.

The Union estimates an impact of up to R$480 billion if the 2022 thesis is maintained, while entities representing policyholders calculate values ​​between R$1.5 billion and R$5.5 billion. The final value would be calculated precisely based on the time limit established by the STF for reviewing pensions. The calculation should also consider inflation and the average life expectancy of beneficiaries.

In a statement, the Union’s attorney general, Jorge Messias, said that the Court’s decision guarantees the financial balance of Social Security. “Furthermore, it avoids the installation of a scenario of judicial and administrative chaos that the National Social Security Institute (INSS) would inevitably face if it had to implement the so-called Whole Life Review thesis, as noted in the reasons presented by the Law Firm -General of the Union (AGU) in the processes being processed in the Supreme Court”, wrote Messias.

Understand the case

In 2022, the STF recognized that the beneficiary can choose the calculation criterion that yields the highest monthly amount, and it is up to the retiree to assess whether the lifetime calculation can increase the benefit or not. On that occasion, the Supreme Court endorsed the decision of the 1st Section of the Superior Court of Justice (STF), from 2019, in favor of the “whole life review”.

According to the understanding, the transition rule made by the 1999 Pension Reform, which excluded contributions prior to July 1994, when the Real Plan was implemented, could be removed if it is disadvantageous to the insured. In this afternoon’s session, the STF validated the social security factor, established by Law 9,876/99, which aims to encourage taxpayers to work longer.