Brazil Blocks R$ 2.56 Billion in Assets to Compensate 9 Million Retirees for INSS Fraud

The Brazilian government has initiated a comprehensive response to address widespread fraud within the Instituto Nacional do Seguro Social (INSS), which has affected millions of retirees and pensioners. The INSS has blocked new payroll deductions for all beneficiaries and is set to notify approximately 9 million individuals about unauthorized deductions via the 'Meu INSS' app starting next Tuesday. This follows a massive fraud scheme that involved unauthorized deductions from retirees' benefits, totaling over R$ 100 billion and R$ 6.3 billion between 2019 and 2025. The Attorney General's Office (AGU) has requested the judicial blocking of assets worth R$ 2.56 billion from 12 associations implicated in the fraud, including the Confederação Nacional dos Trabalhadores na Agricultura (Contag), which was excluded from the initial list of blocked entities. These associations are accused of making unauthorized deductions from retirees' benefits. The AGU's action aims to use these blocked funds to compensate victims of the fraud. Finance Minister Fernando Haddad has indicated that the government might use public funds to compensate victims if the blocked assets are insufficient. This move has sparked debate, with some arguing that using taxpayer money to cover the fraud is illegal. The government has also announced plans to return R$ 292 million to retirees for unauthorized deductions made in April. The scandal has led to significant political fallout, with calls for a parliamentary inquiry (CPMI) to investigate the fraud. The issue has gained public attention partly due to a viral video by Deputy Nikolas Ferreira, which has amassed over 120 million views, highlighting the scale of the fraud and urging action against those responsible. Deputy Nikolas Ferreira and Gleisi Hoffmann have exchanged criticisms over the handling of the CPMI.