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New Social Security reduces income transfer to the richest, says secretary Rolim

New Pension

In the Senate, Social Security and Economic Policy Secretaries reinforce need for changes to pension system

Under consideration in the Federal Senate, Proposed Amendment to the Constitution (PEC) 6/2019 will reduce the process of income transfer from the poorest to the richest part of the population. This is what said on Thursday (22/8) the Secretary of Welfare of the Special Secretariat of Welfare and Labor of the Ministry of Economy, Leonardo Rolim, while attending a public hearing in the Committee of Constitution, Justice and Citizenship (CCJ) of the Senate .

According to Rolim, 47% of Social Security spending goes to the 15% of the richest beneficiaries in the current pension system. This is due to current rules for accessing and receiving benefits. Rolim pointed out that Brazil offers the highest replacement rate in the world, that is, the value the retiree receives in relation to how much he contributed at the time he worked.

“Due to benefit rule calculations, it is a way of transferring income to the richest, who get the average of the best salaries. While most of the low-income population do not have so much income swings and will retire on a minimum wage, ”said Rolim.

Spending

For the Secretary of Economic Policy of the Ministry of Economy, Adolfo Sachsida, who also attended the hearing, the system is unfair to those who earn less. “The richer the public servant, the greater the transfer society needs to make to him. The New Social Security reduces this social injustice, ”said the Secretary of Economic Policy.

Social Security spending today corresponds to 13.1% of Gross Domestic Product (GDP), which compromises new investments in strategic areas for the country. “New Social Security will help the pension system to be able to pay pensions in the future without having to raise the general taxes charged to the population. Without the New Pension, this will not be possible, ”emphasized Sachsida.

Another example of transfer to the rich is that, today, almost 60% of the social security expenses with civil servants are supported by taxes paid by the entire population, especially by the poorer, due to the regressive tax system. The Social Security Secretary was categorical about the need for approval of the New Social Security: "There is no room to believe that without reform, Social Security will remain sustainable," said Rolim.