Lula asks Supreme Court to suspend wave of lawsuits over INSS fraud

The petition, signed by President Luiz Inácio Lula da Silva and Attorney General Jorge Messias, requests an injunction and seeks emergency relief. It argues that the constitutional lawsuit—an Allegation of Violation of a Fundamental Precept (ADPF)—aims to both guarantee restitution to affected beneficiaries and preserve the financial stability of Brazil’s social security system.

The case was assigned, by connection, to Justice Dias Toffoli, who is already handling a related case concerning INSS deduction practices.

According to the AGU, fraudulent schemes by certain associations have fueled a sharp rise in litigation in the social security sector. Data from the National Council of Justice (CNJ) show more than 4.1 million social security-related lawsuits are currently pending across the country. Over the past five years, approximately 9 million association-related deductions were made from INSS benefit payments, suggesting that litigation could escalate further.

In its filing, the AGU requested that the STF declare unconstitutional previous rulings that found the federal government and the INSS responsible for repaying illegal deductions made between March 2020 and March 2025—the period under investigation by the Federal Police in Operation “No Discount.”

The AGU argued that court rulings requiring the INSS and the federal government to repay victims—sometimes double the deducted amounts—pose a risk to the administration’s ability to process claims and maintain budgetary stability. The agency contends that without judicial intervention, the government could face a wave of mass litigation, threatening the viability of public pension policy.

To expedite restitution, the AGU also requested that the STF authorize an extraordinary credit line outside the federal spending cap for fiscal years 2025 and 2026. The agency noted that the court has approved similar exceptions in the past, such as in the aftermath of the 2024 floods in Rio Grande do Sul.