Lula Enacts Ban on Automatic INSS Deductions as Refunds Top R$2.8 Billion

Overview

• INSS reports 6,240,775 contested cases, with 4.16 million beneficiaries reimbursed and roughly R$2.835 billion returned to accounts.
• The deadline to file administrative claims has been extended to February 14, 2026, with requests accepted via Meu INSS, phone 135 or at post offices, and refunds paid with IPCA correction without court action.
• The new law prohibits deductions to associations or unions even with prior authorization, keeps benefits blocked by default, and requires biometric verification or qualified electronic signature to unlock or contract consignado, with no phone or proxy authorizations.
• Entities that make improper deductions must return the full corrected amount within 30 days, cases of fraud must be reported to the Public Prosecutor’s Office, and the INSS can pursue judicial recovery if repayment is not made.
• Sanctioned with vetos, the law excludes provisions such as CMN authority over consignado interest caps and mandatory active-search and biometric terminal requirements; investigations tied to Operation Sem Desconto estimate R$6.3 billion in losses, and court actions have frozen R$2.8 billion via INSS suits and R$3.5 billion via an AGU case.