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FGTS: Safety Network for Brazilian Workers
This is your chance to learn the main information and rules of the Guarantee Fund to make the most of your balance
The Service Time Guarantee Fund (FGTS) is an essential tool in Brazilian labor legislation, created to protect workers in times of need and contribute to the country's economic stability.
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Since its creation in 1966, the FGTS has played a crucial role in the financial security of Brazilian workers. In addition to providing a safety net, the FGTS has also been an important source of financing for infrastructure and housing projects in Brazil, helping to boost urban development and improve the population's quality of life.
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Step by Step to withdraw the FGTS amount
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Origin of FGTS
The FGTS was established during the military regime in 1966, with the aim of modernizing labor legislation and creating an economic safety net for workers. Before its creation, workers had no financial guarantees in case of unemployment. The FGTS emerged as a way to ensure that workers had access to financial resources in times of need, such as job loss.
Since its creation, the FGTS has undergone several reforms and updates, with the aim of expanding its coverage and adapting to changes in the job market. The creation of modalities such as the Birthday Withdrawal and the Emergency Withdrawal, for example, brought more flexibility and options for workers, allowing access to FGTS resources in specific situations and according to individual needs.
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Operation
The FGTS works as a compulsory savings account for Brazilian workers. Employers are required to deposit 8% of the employee's salary monthly into an account linked to the FGTS. For example, if a worker earns R$ 3,000 per month, their employer must deposit R$ 240 into their FGTS account each month. This fund accumulates over time, providing a financial reserve for the worker in situations predefined by law.
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In addition to regular deposits, the FGTS also includes a termination fine of 40% on the accumulated balance, paid by the employer in the event of unfair dismissal. This fine is one of the mechanisms that reinforce the function of the FGTS as protection for workers, guaranteeing additional resources in times of unexpected unemployment. The account linked to the FGTS is unique for each worker, being managed by Caixa Econômica Federal, which also provides online services and applications for workers to consult and manage balances.
Authorized Withdrawals
FGTS withdrawals are permitted in specific situations, such as unfair dismissal, retirement, purchase of your own home, serious illnesses, and death of the worker. In case of unfair dismissal, for example, the worker can withdraw the full balance from their FGTS account. Additionally, the fund can be used to help pay for real estate, as long as the worker meets certain requirements.
Another case in which FGTS withdrawal is permitted is in the event of natural disasters, such as floods or landslides, as long as the place where the worker lives has been affected and a state of public calamity has been declared. In these situations, the withdrawal can be carried out to assist in the recovery and repair of damage caused. In addition, workers who retire are entitled to a full withdrawal of their balance, and those diagnosed with serious illnesses such as cancer or HIV can also access FGTS resources to cover medical expenses and other costs related to treatment.
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Income
The resources deposited in the FGTS account do not remain idle; they are monetarily adjusted and earn interest. Income is calculated based on the Reference Rate (TR) plus 3% per year. In 2023, this correction guaranteed a return above inflation, helping to preserve the purchasing power of resources accumulated in the FGTS.
This annual income is a way of valuing the FGTS balance, benefiting workers. In addition, workers have the option of joining the birthday withdrawal, which allows the withdrawal of part of the FGTS balance annually, in the month of the beneficiary's birthday. This modality offers greater flexibility to the worker, allowing access to a portion of FGTS resources on a recurring basis, without having to comply with traditional withdrawal criteria.
FGTS Benefits
The FGTS offers numerous benefits for workers and the Brazilian economy. It provides a financial safety net in the event of dismissal, encourages home ownership and contributes to the country's development through investments in housing and infrastructure. The fund helps stabilize the economy by financing projects that create jobs and improve the population's quality of life.
Furthermore, the FGTS plays a crucial role in promoting social mobility, by enabling workers to use their resources to finance studies and professional qualification courses. This opportunity to invest in education and training can open doors to better employment opportunities, increased income and greater financial security in the long term.
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Reviews
Despite the benefits, the FGTS faces criticism and challenges. One of the main criticisms is the fund's profitability, which has historically been lower than other forms of investment, such as savings. Furthermore, monetary correction by the TR has been the subject of controversy, as it often does not keep up with inflation, leading to a loss of purchasing power of the deposited resources.
These issues generate debates about the need for reforms in the system. Another point of criticism is the bureaucracy involved in the FGTS withdrawal process, which can be slow and complex, making it difficult for workers to access resources in times of urgent need. The lack of transparency and clarity in the information provided to workers about their balances and income is also a concern, generating distrust and dissatisfaction with the system.
Reform Proposals
To make the FGTS more efficient and beneficial for workers, several reform proposals have been suggested. Among them are the improvement in the fund's profitability, the diversification of investments and the linking of monetary correction to more effective inflation indices. Another proposal is to increase flexibility in withdrawal situations, allowing workers to have more control over their resources.
Promoting financial education is also crucial for workers to use the FGTS more intelligently. Furthermore, there are suggestions for the implementation of digital tools that facilitate access and management of the fund, allowing workers to monitor their balances and income in real time, make withdrawals and queries in a practical and quick way, increasing transparency and trust. in the system.
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Conclusion
The Service Time Guarantee Fund is a fundamental piece in the social and economic protection of Brazilian workers, providing security in times of financial difficulty and contributing to the country's development. However, the system needs adjustments to remain relevant and efficient. The reform proposals aim to improve the profitability and flexibility of the FGTS, ensuring that it continues to meet the needs of workers in a constantly evolving world.
Collaboration between government, employers and unions is essential to find solutions that benefit all parties involved. With appropriate reforms, the FGTS will continue to play a crucial role in protecting Brazilian workers and promoting the country's economic development.