The federal government’s proposal to extinguish the anniversary withdrawal from the Service Time Guarantee Fund (FGTS), one of the most accessible types of credit for consumers and families, has generated intense criticism from parliamentarians, economists and representatives of the financial sector.
The Minister of Labor, Luiz Marinho, has been defending the end of the model since the beginning of President Lula’s third term, in January 2023. This week, the Free Market Parliamentary Front (FPLM) reiterated its opposition to the idea, highlighting the impacts negatives that change can bring.
The Ministry of Labor intends to send a bill to the National Congress, still in 2024, to extinguish the birthday withdrawal. The proposal includes the introduction of payroll loans for workers in the private sector, an alternative considered more risky by financial institutions, due to job instability and the lack of guaranteed income in the medium and long term, characteristics common to retirees and pensioners.
Data from the Central Bank show that, in September, the interest rate on credit granted to the private sector was 2.7% per month, while advance payments on birthday withdrawals had interest rates of just 1.8% per month. This modality is significantly more advantageous compared to credit alternatives, such as non-payroll personal credit (5.7%), special check (7.5%) and credit card in installments (9.2%) or revolving credit card (15. 1%).
Created in 2019, during the government of Jair Bolsonaro, the anniversary withdrawal already has the support of more than 35.5 million Brazilians and has injected R$151 billion into the economy since its implementation. In 2023 alone, R$38.1 billion were released through this modality.
Economic and social impacts of the end of the FGTS anniversary withdrawal
The main fear regarding the extinction of the birthday withdrawal is the impact on the low-income population, who depend on this alternative to obtain credit at affordable costs. According to Serasa Experian, 72.6 million Brazilians were in default in September 2024, an increase of 1.1% compared to the same period in 2023.
Experts warn of the ripple effect that change can generate. Daniel Garcia, head of FGTS at the financial services platform MeuTudo, explains: “The birthday withdrawal does not compromise the worker’s monthly income. Its extinction will force consumers to resort to payroll-deductible credit, which is deducted directly from their salary, which could worsen debt.”
Eduardo Lopes, president of Zetta, an entity that represents insurtechs, highlights that the funds from the anniversary withdrawal boost the economy, create jobs and increase tax collection. João Guilherme de Andrade, vice-president of BMG bank, reinforces:
“This modality allows low-income families to access credit for basic needs, such as home renovation, purchasing food and debt renegotiation. It is an essential instrument for those who need it most.”
Government says looting compromises investments in housing
Minister Luiz Marinho argues that the anniversary withdrawal reduces FGTS resources by around R$100 billion annually, compromising investments in areas such as housing. As an alternative, the government proposes private payroll loans, with FGTS as a guarantee in cases of dismissal.
However, parliamentarians from different political spectrums question the proposal. Deputy Captain Alberto Neto (PL-AM) criticizes the measure. “This change restricts the economic freedom of Brazilians and harms the most indebted, who depend on this tool to reorganize their finances.”
Rodrigo Marinho, director of Instituto Livre Mercado, states that the end of the anniversary withdrawal will force vulnerable workers to resort to more expensive loans.
“This measure mainly harms the poorest, limiting access to resources that rightfully belong to the workers themselves.”
Even critics of the fund, such as congresswoman Any Ortiz (Cidadania-RS), recognize the importance of the anniversary withdrawal. “Although I am against the FGTS as a whole, the birthday withdrawal is an improvement. If the fund exists, people must have access to what is theirs.”
