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Brazil to use severance fund to inject BRL 36 billion in the economy

The federal government announced that it will allow each worker to withdraw BRL 1,045 from the workers’ severance fund FGTS from June 15 onward, in a measure that may inject BRL 36 billion in Brazil’s economy. 

Roughly 60 million workers are expected to be benefitted by the measure, which the government plans on costing by extinguishing the PIS/Pasep fund — an FGTS equivalent for civil servants who worked between 1971 and 1988 — and transferring its balance to the FGTS. However, individual PIS/Pasep accounts will be left untouched.

Funds from accounts related to extinguished job contracts will be released first. State-owned bank Caixa will be responsible for organizing the money’s distribution. Withdrawals will be permitted until December 31.

Brenno Grillo

Brenno has worked as a journalist since 2012, specializing in coverage related to law and the justice system. He has worked for O Estado de S. Paulo, Portal Brasil, ConJur, and has experience in political campaigns.

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