Brazil’s public-sector pay loopholes draw reform demands - Valor International

Seven Brazilian civil society organizations are calling on the government and Congress to crack down on public-sector compensation that exceeds the constitutional salary cap, after at least R$24.3 billion in above-ceiling payments went to 67,300 public officials in 2025. Their manifesto sets out 11 proposals to close pay loopholes, establish nationwide compensation standards and prevent the creation of benefits without legal authorization.

Chief justice to propose bill on judge salariesBrazil paid R$24.3bn above public-sector salary cap

Signed by República.org, the "Fiquem Sabendo Association", "Livres", the Center for Public Leadership (CLP), "Transparência Brasil", "Movimento Pessoas à Frente" and Transparency International Brazil, the document says the payments went primarily to judges, prosecutors, government attorneys and public defenders.

The manifesto also says that Brazil leads a comparison with 10 other countries in spending on compensation above the constitutional limit, at an amount 21 times greater than Argentina, which ranks second.

To illustrate the scale of the problem, the document compares the R$24.3 billion paid above the ceiling by federal, state, and municipal governments in 2025 with the federal government’s primary deficit of R$61.7 billion that year.

“Beyond the need for fiscal adjustment, which requires tackling privileges concentrated among just 1% of the public-sector elite, addressing excessive compensation is a basic step if we want to restore the state’s credibility,” said Isadora Modesto, executive director of República.org, in the manifesto.

Jessika Moreira, executive director of Movimento Pessoas à Frente, said Brazil cannot enter a new political cycle, with new executive terms and a new Congress taking office next year, without confronting excessive public-sector pay.

“Leaders of the executive, legislative and judicial branches have a responsibility to move toward a definitive solution. This is not merely a fiscal issue, but a matter of public integrity and respect for democracy,” Moreira said.

The seven organizations advocate national legislation establishing clear, objective, and restrictive criteria for distinguishing compensation from expense reimbursements and other indemnity payments. Under their proposal, only payments intended to compensate for actual losses or expenses, granted on an occasional, individual, and temporary basis, would qualify as reimbursements exempt from the salary cap. Such payments would also need express authorization by national legislation and be subject to predetermined limits.

The manifesto also calls for proper income taxation of payments that increase recipients’ wealth, robust transparency mechanisms and standardized public-sector payroll information. It seeks to prohibit creating benefits through administrative measures, such as resolutions issued by judicial or other governing councils, without express statutory authorization.

“The new presidential term and the next Congress represent an opportunity to tackle excessive public-sector compensation once and for all. The benefits granted to a small elite of public officials are unacceptable on moral, fiscal and social grounds. Brazil needs clear rules that ensure compliance with the constitutional salary cap and put a definitive end to these distortions,” said Tadeu Barros, president and CEO of the Center for Public Leadership.

The organizations also call for controls on retroactive payments, with clearly defined time limits, and administrative accountability for officials who authorize above-cap compensation without legal grounds. Their proposals include ending mechanisms that automatically link pay levels across different public-sector careers and limiting court-awarded legal fees paid by losing parties, which should count toward the constitutional ceiling when combined with other compensation.

The document acknowledges the Supreme Court’s reaffirmation of the constitutional salary cap, currently R$46,366.19, as progress and welcomes its requirement that national legislation regulate expense reimbursements and indemnity payments under Legal Thesis 966. However, it criticizes the establishment of two separate categories of additional payments, each worth up to 35% of the ceiling. According to the organizations, this arrangement has allowed judges and prosecutors to continue receiving compensation at least 70% above the constitutional limit.

The organizations also oppose Bill 2,721/2021, currently before the Senate, because it provides for 32 exceptions to the salary cap, 14 of which they say have been incorrectly classified as indemnity payments. “Before voting, Congress should simulate the impact of each bill’s rules using current payroll data. That would show which payments would be eliminated or reduced and how much compensation would still exceed the ceiling under each scenario,” said Magno Karl, executive director of Livres.

Juliana Sakai, executive director of Transparência Brasil, said public-sector compensation must be standardized and made transparent across all levels and branches of government to enable effective internal and external oversight.

Federal Justice Council President Luis Felipe Salomão, a senior judge, and Prosecutor General Paulo Gonet have approached the Attorney General (AGU) to facilitate the release of funds for additional benefits paid to judges and prosecutors, the so-called extra pay perks.

The estimated cost of these payments is R$533 million in 2026 alone, an amount not included in the agencies’ budgets. Faced with the impasse, the Office of the Attorney General asked the Supreme Court to clarify how the payments should be made.

This article was translated from Valor Econômico using an artificial intelligence tool under the supervision of the Valor International editorial team to ensure accuracy, clarity, and adherence to our editorial standards. Read our Editorial Principles.