Discarding Low Contributions: Can You Exclude Lower Salaries?

This page is a translation of the original Portuguese text, provided for convenience. It deals with Brazilian law. If there is any discrepancy, the Portuguese version prevails. Read the original in Portuguese

Since Constitutional Amendment 103/2019, every contribution counts toward your retirement calculation, and lower payments can reduce your initial monthly benefit amount. The “discard” theory proposes removing those contributions to raise the benefit. Applied carelessly, however, it undermines your minimum contribution requirement (carência) and your contribution time, and it lowers the very amount it was meant to increase.

What changed in the calculation with the social security reform

Before Constitutional Amendment 103/2019 took effect, the benefit base (salário de benefício) was calculated on the insured person’s highest 80% of contribution salaries, and the lowest 20% were automatically discarded. That rule, set out in Article 29 of Law 8.213/91, worked as a safeguard: low contributions made during periods of lower income simply never entered the average.

With the reform, Article 26 of Amendment 103 changed the formula. The benefit base became the simple arithmetic average of 100% of the contribution salaries recorded since July 1994. In other words, no contribution is discarded automatically anymore. Every one of them goes into the calculation, including the lowest.

The change hits your wallet directly. A single month paid on the minimum wage, in the middle of a contribution history of higher amounts, now pulls the average down permanently. That is the context in which the debate gained strength over removing from the calculation the contributions that hurt the final result.

If you contributed for many years, the impact is not theoretical. Periods of unemployment, early career years, or self-employment often produce low payments. Before, the 80% rule filtered them out. Now they are added to everything else and lower the average to which the benefit coefficient applies.

What the contribution discard theory is

The contribution discard theory holds that an insured person can ask to have lower contribution salaries removed from the average when they reduce the benefit, as long as those contributions are not needed to meet the retirement requirements. The logic is arithmetic: remove the amounts that drag the average down, and the result goes up.

The legal basis invoked is the right to the best benefit, recognized by Brazil’s Supreme Federal Court in a general repercussion ruling. Under this principle, you are entitled to have your benefit calculated in the way that is most advantageous to you, within the options your own contribution history offers.

It is important to separate two situations that are often confused. One is discarding contributions within the new 100% formula, after the reform. The other, quite different, is the so-called “whole-life review” (revisão da vida toda), which debated including contributions made before July 1994. These are distinct theories, each with its own requirements and legal basis.

This is the point that separates a good strategy from a serious mistake. Discarding only makes sense when you have time and contribution credits to spare. Without that cushion, removing contributions can cost you the right to the benefit itself, as explained below.

That rule, set out in Article 29 of Law 8.213/91, worked as a safeguard: low contributions made during periods of lower income simply never entered the average.

When discarding really does raise your income

Discarding tends to pay off when you have accumulated more contribution time than the rule you want to use requires. In that case, you have surplus contributions that are not needed to qualify, and removing them does not compromise any requirement. If those surplus contributions happen to be the lowest ones, removing them raises the average at no cost.

A simple example helps fix the idea. Imagine an insured person with thirty years of contributions whose transition rule requires less time than he has already accumulated. The months beyond what is required are surplus. If the lowest contributions are among them, discarding those months raises the average without removing anything needed to qualify.

The gain tends to be larger when a few very low contributions sit in the middle of a history of high amounts. A single month paid on the current minimum wage, now R$ 1.621,00, next to payments close to the INSS (Brazil’s National Social Security Institute) ceiling of R$ 8.475,55, distorts the average out of proportion. Removing that outlier has a significant effect.

Even so, none of this can be assumed. The decision depends on a simulation that compares the benefit with and without the contributions being considered for discard, checking in each scenario whether the requirements are still met. Without that comparison, discarding becomes a guess, and guessing is costly in social security matters.

Limits and risks: when excluding contributions backfires

The first risk comes from a common mistake: treating a contribution as nothing more than an amount. Every payment has two sides. It feeds into the average, but it also counts as contribution time and toward the minimum contribution requirement. When you discard a month, you do not erase only the low amount. You also give up the time and the credit tied to it.

The minimum of 180 monthly contributions, required for most retirement benefits, is a sensitive threshold. If you are right at that number, you have no contributions to spare. The same goes for the time required under a transition rule: discarding months can knock you out of the most favorable rule and push you into a stricter one, wiping out any gain in the average.

There is also the risk of affecting the “toll” (pedágio) or the points total under certain transition rules, which add age and contribution time together. A poorly calculated exclusion can break the points you have reached and delay your retirement. That is why discarding is never automatic: the INSS calculates the benefit using all contributions, and it is up to you to show that excluding some of them is more advantageous.

Another limit often goes unnoticed: the timing of the application. The advantage of discarding can change depending on the filing date and the rule in force at that moment. A simulation run today may not hold a few months from now, especially if you keep contributing and changing the makeup of your average month by month.

How to evaluate discarding safely

The safe path starts with a careful reading of your social security record, mapping every contribution salary and identifying the lowest months. From there, you run scenario simulations: the full benefit, with all contributions, and alternative benefits, with each group of candidate months excluded.

Each scenario must be tested against the requirements of the chosen rule. You can only discard what is left over after time, minimum contributions and, where applicable, points or the toll are secured. The goal is to find the combination that delivers the highest monthly income without putting approval at risk.

Because the INSS does not discard contributions on its own, the claim is usually presented through the administrative channel and, if denied, taken to the courts, always based on the right to the best benefit. This is a technical strategy that requires individual analysis and social security calculations. It is not a rule that applies uniformly to every insured person.

This work requires calculation tools and a command of the transition rules currently in force. The difference between a well-built average and one dragged down by low contributions can mean a significant increase in monthly income, an amount that multiplies over the entire life of the benefit and also carries over to any future survivor’s pension.

Frequently Asked Questions

Does discarding contributions work for every retirement benefit?

No. Discarding only makes sense when you have surplus contribution time and minimum contributions beyond what the intended rule requires. For benefits granted right at the limit of the requirements, there are no contributions available to exclude, and trying to do so can make approval impossible. The assessment is always individual and depends on calculation.

Does excluding low contributions reduce my contribution time?

Yes. Each discarded contribution stops counting toward the average, toward contribution time, and toward the minimum contribution requirement. This is the main caution with the theory: you can only remove what is not needed to meet the retirement requirements, or you risk losing the right to the benefit itself.

Does the INSS discard contributions automatically?

No. The administrative calculation considers all contribution salaries, including the lowest ones. To obtain the discard, you must show through a simulation that the exclusion results in a more advantageous benefit, usually through an administrative application and, if necessary, a lawsuit based on the right to the best benefit.

As informações deste artigo são de caráter informativo e não substituem consulta jurídica individualizada. Cada caso possui particularidades que exigem análise específica.