Brazil's Supreme Court Issues Absolute Ban on Public Sector Supplementary AllowancesIn a decisive move to enforce fiscal discipline and transparency, Ministers Flávio Dino and Alexandre de Moraes of Brazil's Supreme Federal Court (STF) have reiterated an absolute prohibition on the creation, implementation, or payment of supplementary allowances, known locally as 'penduricalhos,' for public sector employees across all sectors.
The ruling was issued in direct response to media reports indicating that new indemnity payments were being created by various public bodies, effectively circumventing previous judicial restrictions. The Court's decision makes clear that the ban is comprehensive and applies to any category of allowance, including those established after the Court's original judgment on March 25, 2026.
According to the ministers' statement, the only exception to this prohibition is for funds that were expressly authorized in a prior, specific STF decision. Any payment falling outside this narrow exception is now considered irregular.
To ensure ongoing compliance and public oversight, the decision introduces a significant new transparency mandate. Courts, public prosecutors' offices, audit courts, and public defender offices are now required to publish monthly reports detailing the exact amounts received by each of their members. This measure aims to make all compensation publicly visible and accountable.
The consequences for non-compliance are severe. The STF has warned that officials responsible for authorizing or making irregular payments may face criminal, civil, and administrative liability. This stern warning underscores the Court's intent to enforce the ban rigorously and hold individuals accountable for violations.
This landmark decision represents a major step in Brazil's ongoing efforts to control public expenditure and combat the perception of privilege within the public sector, setting a new standard for financial transparency and accountability in government institutions.