Brazil's Supreme Court has intervened in a high-stakes dispute over public-sector compensation, with Justice Flavio Dino ordering the immediate suspension of extra-salary perks known as 'penduricalhos' across all branches of government.
The directive directly challenges a recent authorization by the Federal Court of Accounts (TCU), which had permitted certain public officials to receive salaries exceeding the constitutional cap through a mechanism dubbed 'teto duplex.'
The move by Justice Dino represents a significant escalation in the ongoing judicial battle over fiscal discipline in Brazil.
By halting these additional payments, the Supreme Court justice aims to curb what he views as unauthorized spending that undermines the country's salary ceiling rules.
This decision places immediate pressure on state and municipal budgets that have relied on these supplementary payments to retain staff or attract specialized talent.
The conflict highlights a deeper institutional rift between Brazil's highest judicial body and its audit court.
While the TCU has argued that certain allowances are legally distinct from base salaries and thus permissible under the cap, Justice Dino's ruling suggests a stricter interpretation of fiscal limits.