Work wants gradual end of FAT funding for Social Security – 09/22/2023 – Panel

The Ministry of Labor wants to gradually eliminate the transfer of PIS/PASEP collections to social security actions, as it seeks to strengthen the FAT (Worker Support Fund), affected by the reduction in resources in recent years.

Contributions owed by private and public companies to PIS/PASEP help finance FAT, responsible for funding programs such as unemployment insurance and salary bonuses, in addition to economic development actions.

In 2019, the constitutional amendment that established changes in Social Security also determined the transfer of PIS/PASEP collections to social security actions, which, according to the Ministry of Labor, makes it difficult to execute the FAT. In 2021, these transfers totaled R$11 billion. This year, they should reach R$22.7 billion.

Workers’ representatives at Codefat (Deliberative Council of the Workers’ Support Fund) state that, without a contribution of R$2.3 billion from the Treasury, the FAT would have presented a deficit of R$1.2 billion in 2022, instead of a surplus of R$1.1 billion. They attribute the imbalance to the transfer of R$17.6 billion last year to Social Security.

Given this scenario, the Ministry of Labor wants to forward a proposal to gradually reduce PIS/PASEP revenue transfers for social security actions.

The idea is to gradually reduce the transfer — in 2023, instead of R$22.7 billion, the value would drop to R$14.07 billion. In 2024, it would be R$14.857 billion. From 2025 onwards, the premise would be to cut the transfer in half annually, until completely eliminating the transfer in 2032.

Furthermore, the ministry wants full compensation for the “misappropriated FAT resources”, in the form of transfers from the National Treasury. According to Labor’s calculations, this value would total R$76 billion, corresponding to the accumulated transfers for social security expenses made between 2020 and 2023.

With the change, the FAT could return to making special deposits, such as the urban Proger (Employment and Income Generation Program), says Sérgio Luiz Leite, representative of Força Sindical at Codefat. “With the transfer to Social Security, the FAT loses an important function, which is to qualify the worker and promote public employment policy”, he argues.

The change, however, is not simple, according to government technicians. To change the constitutional amendment, it would be necessary to approve another PEC (proposed amendment to the Constitution) to remove the provision for transfers to social security actions from the Constitution.

Furthermore, the government would have to find a new source of resources to finance Social Security, which requires studies and takes time.

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