On Friday, the Brazilian government issued an executive order temporarily easing regulations for withdrawals from the workers' severance fund FGTS, potentially releasing around 12 billion reais ($2.04 billion) to about 12 million employees.
A law enacted in 2019 allowed formal workers to annually withdraw part of their FGTS balance if desired, during their birth month. However, those opting for this scheme forfeited the ability to access the remaining balance upon termination, as initially permitted, and could only regain full withdrawal rights after 24 months.
The recent adjustment by President Luiz Inacio Lula da Silva's administration allows workers dismissed between January 2020 and the current date to retrieve their remaining FGTS balance, irrespective of any prior annual withdrawal choices.
The disbursements are set to commence in March, the government confirmed.
($1 = 5.8960 reais)