Government wants to adopt automatic rule to change INSS payroll interest ceiling

Today, the maximum rate is a discretionary decision made by the CNPS, a collegiate body made up of representatives of the federal government, retirees and pensioners, active workers and employers.

The idea is to create a model that gives more predictability to beneficiaries and financial institutions. On the one hand, retirees and pensioners could benefit more quickly from a drop in interest rates. On the other hand, banks would have room to increase the rate at times of higher credit costs, without the risk of interrupting concessions.

According to a technician interviewed by the report, the model is still under study, but the most likely formula is a weighting between the Selic rate and the DI rate, with a term of two years. The assessment is that this composition serves as a thermometer of banks’ funding costs. Based on this, the calculation must provide a reference proportion for the INSS payroll interest ceiling.

Minister Wolney Queiroz, of Social Security, confirmed to Folha the intention to adopt the automated formula.

"I don't claim to have the power to determine the payroll tax. If we find an equation that is transparent and good for everyone, we can adopt it," he stated.

The technicians' idea is to advance this debate until the end of this year. However, as the discussion is still early, it is unlikely that the model will be finalized in time for the CNPS meeting, scheduled for July 28th.

At the same time, the minister intends to encourage the technical area to evaluate the possibility of reducing the current limit on payroll loans, which is 1.85% per month. The measure was anticipated by the newspaper Valor Econômico and confirmed to Folha by the minister.

"We don't have the rate that will be proposed. The flow is as follows: the technical team is asked to prepare a calculation to update the rate, for more or less; in this case, for less. The methodology is exposed in the CNPS, there is a debate and a vote", he said.

According to him, the formal request to the technical area will be made this week, so that the matter can be voted on at the council meeting at the end of the month.

The cap of 1.85% per month has been in effect since the end of March 2025, when the council decided to increase the limit. Days earlier, the Copom had raised the Selic from 13.25% to 14.25% per year.

Previously, the maximum charge was 1.80% per month, according to a decision in January 2025, and banks were already requesting an increase to 2% per month in the payroll deduction modality, the most popular. At the time, Selic had risen from 12.25% to 13.25% per year.

Now, Selic is on a downward trajectory. After reaching 15% per year, a level at which it remained until March 2026, it has already been reduced three times and is currently at 14.25% per year.

Queiroz acknowledged that, even with the request to review the maximum INSS payroll rate, the technical area may conclude that there is no room for cuts.

"The conclusion could also be this, that it did not reach the previous level", he stated.

According to a technician, the minister wants to bring the interest rate issue back to the agenda, but it is not yet known whether there will be room for reduction. The calculation needs to be done accurately to avoid harming the retirees themselves. An artificially low rate can alienate financial institutions and restrict the supply of credit.

At the beginning of the current government of Luiz Inácio Lula da Silva, in 2023, the then Minister of Social Security, Carlos Lupi, led the decision to cut the interest ceiling on payroll loans for retirees. The maximum rate fell from 2.14% to 1.70% per month.

Banks such as Bradesco, Itaú, Pan, Banco Mercantil do Brasil, C6 Bank and Daycoval reacted by suspending the concession of the modality. Even public institutions, such as Caixa Econômica Federal and Banco do Brasil, temporarily halted operations.

The loan was only offered again after President Lula interceded for the increase. The maximum rate then rose to 1.97% per month.

From the beginning of 2023 until May 2024, the ceiling was reduced several times, until it reached 1.66% per month, following the downward trajectory of the Selic in the period.

As of September 2024, however, the Copom increased interest rates again, without any adjustment to the INSS payroll limit. At the end of that year, some banks suspended operations again until the values were reviewed at the beginning of 2025.

Financial institutions argued with the CNPS that the new INSS payroll ceiling be linked to future interest, which determines how much banks pay for the money they lend.

"Now, with the Selic falling again, the government is resuming this agenda, but it lacks technicality. No data and studies were presented to support this criterion. The cost of funding does not reflect the Selic, but rather the two-year DI", says Ricardo Andreassa, technical director of payroll loans at ABBC.

Most members finance this loan with CDBs maturing in two years. To calculate the cost of the operation, banks use the profitability of the CDB in relation to the projection for the Selic, or DI, in the next two years.

According to Andreassa, the cost is 120% of the DI maturing in two years, which is 14%. Thus, the cost to the bank is 16.8%, not 14.25%, the current Selic rate.

"This shows that Selic is not the best indicator, but we were unable to move forward with the government with this methodology, despite presenting it several times at the CNPS", says the executive.

If the ceiling is below the cost of funding, the operation becomes financially unviable for banks, especially smaller ones, which pay more for their CDBs.

"At first, it may seem good for retirees, but this artificial reduction will reduce the supply of this line, especially for older people and those who borrow smaller resources. They will end up unassisted by the cheapest line of credit that exists", adds Andreassa.

When contacted, Febraban informed that it maintains dialogue with the Ministry of Social Security regarding the interest ceiling on INSS payroll loans and also defends that the review is "aligned with the effective cost structure of the operation". This would consider, in addition to the Selic, the costs of funding, distribution and operation, the risks of the loan and taxes.

"Febraban's technical studies indicate that the most appropriate reference for monitoring the cost of funding [captação] is the future interest curve compatible with the term of the operations, and not just the current Selic", stated the entity, in a note.

Febraban also defends the maintenance of the credit modality and says that its surveys indicate that a significant portion of borrowers use the resource to pay debts, medical expenses, food and other basic needs.

"The experience of recent years shows that setting ceilings at levels incompatible with the costs of the operation can reduce the supply of credit, mainly affecting higher-risk groups, such as older beneficiaries, people with disabilities and BPC/LOAS beneficiaries," said Febraban.

In May, loans in this modality totaled R$281 billion, according to data from the Central Bank. The average interest rate was 1.82% per month.

First investigations into INSS deviations should be concluded this month, says PF

Reports will be sent to Mendonça, rapporteur of the case at the STF, and it is up to the PGR to report any suspects. Conclusions should be centered on irregular discounts; mentions of Lulinha are investigated within 'legal treatment'