SAO PAULO (Reuters) – Brazil’s government on Friday issued an executive order temporarily relaxing rules for disbursements from workers’ severance fund FGTS, a measure that could release as much as 12 billion reais ($2.04 billion) to about 12 million workers.
A law passed in 2019 allowed formal workers to withdraw part of their FGTS balance annually, if they wished, in their birthday month.
However, those who opted for this scheme could no longer withdraw the remaining balance upon dismissal – as originally permitted under the fund’s rules – and could only regain full withdrawal rights after 24 months.
Under the change announced by President Luiz Inacio Lula da Silva’s administration, workers dismissed from January 2020 to Friday will be able to access their remaining FGTS balance, even if they had previously chosen the annual withdrawal option.
The payments will start in March, the government said.
($1 = 5.8960 reais)
(Reporting by Isabel Teles; Editing by Sarah Morland and Kylie Madry)
Comments