The Social Security Counter-Reform


In December 2016, the illegitimate President Michel Temer sent to National Congress the Proposed Amendment to the Constitution (PEC) 287/2016, which establishes the Social Security Reform, withdrawing rights from a large number of Brazilian workers in order to continue paying interest and amortizations of the public debt.

If this bill passes, the Brazilian workers will have to pay the Social Security National Institute (INSS) for 50 years to receive full pension limited to the ceiling paid by INSS, today equivalent to US$1,637.42. Yet the pension for widows will be halved.

The new retirement rules set forth in the Proposal will apply to men under the age of 50 and women under the age of 45. They will have to be at 65 years old to qualify for any pension benefits. The minimum age will change automatically, over the years, if there is any increase in the life expectancy of the Brazilians. However, if there is a fall in life expectancy, the rule will not change.

Whether Pension reform is approved, citizens will have to wait until they are 65 to retire, even when they have worked much more than 30 years. In some regions of Brazil, life expectancy is a little over 65, which means in the neediest regions of the country workers would often not live long enough to enjoy their retirement.

In addition, people with physically demanding jobs, such as farm and construction workers who often start working at quite a young age, would have to work many more years to retire, which is likely to compromise their health.

The rules will be the same for private sector workers and for public employees. The lowest pension will be equivalent to the national minimum wage US$277.69 currently. Pensions will be increased yearly.

All municipalities and states will have a two-year deadline to establish complementary pension funds. All public employees whose wages are higher than the INSS ceiling will have to make an extra contribution to these funds in order to have their pension at full value.

The pension “reforms” is in line with what is being discussed in Europe and particularly in crisis-ridden Greece and Spain, the business-government “consensus” in these matters is that people are living too long and the minimum retirement age should be raised to 65 years. This means that the poor layers of Brazilians, who enter the legal labor market at 16, would work no less than 49 years before retirement. By the same logic, wages are too high and should be cut, which the current constitution forbids.

The CSP-Conlutas opposes this counter-reform on the grounds that hard earned labor rights will be withdrawn.

In reality this bill will benefit banks as it transforms welfare into a private capitalization scheme. This “reform” exempts the State from the management of Social Security turning it into an open market for banks to capitalize on the workers’ welfare which got 22.9% of the national budget, second only to the 42.43% for payments and amortization of the public debt destined to banks in 2015, according to the NGO Auditoria Cidadã da Dívida (Citizen’s Debt Audit).

The devastating effects of this Counter-Reform are justified by lies such as the so-called deficit in the Social Security. One of the most repeated arguments by those who support the bill is to present it as a burden to public budget. The justification is rebutted by several researchers and by labor and social movements as well, who point out that, following constitutional provisions, the claim of the deficit is untrue as the Constitution provides for the Social Security System (composed of Social Security, Healthcare and Social Assistance) the necessary amount of funding which is not put into practice for political reasons, not for lack of funds.

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