On February 5, Minister Flávio Dino determined that the Branches of the Union, the States, the Federal District, and the Municipalities review, within 60 days, the items paid to public agents that may exceed the constitutional cap. The decision was issued in an action filed by the Association of Municipal Attorneys of São Paulo (Complaint 88.319). A similar, also monocratic, decision was issued by Minister Gilmar Mendes when granting the preliminary injunction in ADI 6.006. The effectiveness of the measures proposed by the ministers, however, transcends the specific cases and reaffirms the consolidated understanding of the Supreme Federal Court regarding the binding force of Article 37, XI, of the Constitution of the Republic. Since the promulgation of the Constitution in 1988, that provision sets the remuneration cap for the entire public service, a rule that, according to the minister, has been circumvented through the payment of supposed indemnity items, the famous 'penduricalhos'. In a session held on February 25, the Plenary of the STF began to analyze the monocratic decisions. The proceedings, however, were suspended. The suspension, although it did not nullify the effectiveness of the preliminary measures granted, has already been understood as a mechanism that will allow a broader analysis of all the cases in which the matter is discussed, as well as coordination among various government bodies for a solution accepted by the coalition of institutional forces. The proceedings are expected to resume on March 25.
The controversy is neither new nor merely financial. It is a structural issue within the constitutional regime of the Public Administration, with implications for the entire public service, especially senior officials.
The constitutional cap as a norm of full effectiveness
The aforementioned art. 37, XI, of the Constitution provides that the remuneration and the stipend of the holders of public posts, functions, and jobs may not exceed the stipend of the Justices of the Supreme Federal Court. By its wording, the rule leaves no room for the payment of any other benefit beyond the set cap, expressly providing that it covers personal advantages or of any other nature.
As already established by doctrine and case law, this is a norm of full effectiveness and immediate application, which does not depend on regulation to produce its effects. Such a normative mandate binds all Branches and all federative entities.
The rule of the aforementioned article, as conceived by the Original Constituent Power, is part of the structuring core of the administrative legal regime and gives effect to central principles of the regime: legality, by subjecting the remuneration of civil servants to objective and pre-set parameters; morality and impersonality, by preventing personalized or ad hoc pay arrangements; equality, by ensuring that the exercise of public functions occurs within common remuneration limits; and fiscal responsibility, by imposing rationality and predictability on public spending.
More than a limit on the amount of remuneration, therefore, the constitutional cap was conceived as an instrument to affirm the republican principle. In several precedents, the Supreme Federal Court has pointed out that setting a national cap seeks to avoid pay distortions incompatible with equality and with the idea of public service as a function exercised on behalf of the collective. To overcome a reality of super-salaries and 'penduricalhos' that formed part of civil servants’ pay at the time, the 1988 constituent established the cap as a structural mechanism to contain privileges, preserve the balance of public accounts, and protect social trust in institutions, becoming since 1988 a norm that seeks to ensure governance of the remuneration system.
The constitutional tension: remuneration vs. indemnification
Despite the clarity of the constitutional text, since the promulgation of the Constitution of the Republic there has been an intense debate around so-called indemnity items. The thesis prevailed that amounts related to the thirteenth salary, the vacation one-third bonus, and per diems, for example, because they have an indemnity nature, do not form part of the remuneration or the stipend of public agents. This understanding derives from the very logic of the system: indemnification is not to be confused with consideration for services rendered nor with a patrimonial increase, but is either an express rule of the constituent itself (in the case of the thirteenth salary and the vacation one-third) or the reimbursement of an expense actually incurred in the interest of the public service. For these reasons, such items are not counted for purposes of applying the cap and, moreover, are not subject to income tax.
However, two central factors led to the creation of such items at all levels of the Public Administration, often artificially labeling them as indemnifications, with the purpose of avoiding application of the cap.
The first reason seems quite evident: there is a mismatch regarding the amount set as the cap and, thus, this expedient is used to benefit certain public agents, instituting super-salaries, mainly through unreasonable bonuses.
Some examples are paradigmatic. The housing allowance, paid for many years to judges, including those who owned a home in the city of their post, to cover lodging expenses. There is also the case of the “suit allowance,” received by Deputies of Rio de Janeiro and Mato Grosso, among other states, to enable the purchase of attire appropriate to the exercise of their mandates.
There is, however, a more complex dimension that is rarely addressed: over the years, the value of the stipend of the Justices of the Supreme Federal Court — which serves as the parameter for the national remuneration cap — has lagged in real terms behind inflation and the evolution of public careers. That lag produces systemic effects. Since the cap is referenced to the Justices’ stipend, its update automatically impacts the entire remuneration structure of the public service. A formal increase in the Court’s stipend implies, by reflection, a rise in the maximum limit applicable to all federative entities and to all Branches.
In this context, a significant budgetary tension arose. A direct adjustment of the Justices’ stipend projects broad and immediate financial effects on thousands of civil servants to whose remuneration the so-called “constitutional reducer” applies. In fact, in many careers the gross remuneration exceeds the cap, but the amount actually paid is limited by that containment mechanism. The consequence, therefore, is evident: updating the cap would reduce the amount currently withheld monthly, generating a real increase in the remuneration of numerous public agents.
In view of that scenario, over time the practice took hold of creating indemnity items or specific benefits that do not automatically ripple through the entire national remuneration structure. From a fiscal standpoint, this is a less expansive solution than the formal revision of the stipend that serves as the parameter for the cap.
The constitutional problem arises when such mechanisms come to operate not as genuine indemnification, but as an indirect instrument of salary recomposition. At that point, the debate shifts from the budgetary field to that of fidelity to the constitutional design. The cap was conceived as an objective and transparent limit. Its erosion through parallel avenues undermines the systemic coherence of the model.
That may be the most delicate point of the debate: it is not only a matter of containing occasional excesses, but of confronting a structural distortion created by the combination of the lag in the constitutional parameter and fragmented remuneration solutions.
In any case, the STF’s case law is firm that the legal nature of the item does not follow from the nomenclature adopted. Moreover, the creation of indemnity items requires express legal authorization. And, in any hypothesis, it is forbidden to circumvent the cap by artificially reclassifying remuneration advantages.
The recent decision and the reaffirmation of the normative force of the Constitution
Although without addressing the merits, by ordering a nationwide review of the items paid above the cap, Minister Flávio Dino reaffirms the authority of the Supreme Federal Court’s own reiterated understandings. The relevant point is the expansion of the effects of the decision, on the argument that there has been repeated noncompliance with the Court’s jurisprudence.
A recurring argument invokes federative autonomy and the independence of the Branches as an obstacle to interventions of this nature.
However, such arguments yield to the normative force of the Constitution. As stated earlier: Article 37, XI, is a rule of mandatory observance for all Branches of all federative entities. The decision issued, therefore, does not invade administrative competence; it ensures constitutional supremacy.
Although the issue entails a broader debate to ensure that public agents can indeed have their remuneration adjusted without monetary distortions, one cannot set aside the clear conclusion that the remuneration cap is not an ornamental clause. Thus, once the limit is set by the Constitution, it is up to the Administration to comply with the rule, without artifices to evade it.
The decisions under discussion, in this way, reaffirm the constitutional commitment to set a single, objective, national limit for the remuneration of public agents, reinforcing the premise that, in a Democratic State under the Rule of Law, administrative creativity cannot prevail over the Constitution.
Nonetheless, simplified solutions can hardly account for complex problems. It is necessary to recognize that the historical lag of the stipend that serves as the parameter for the constitutional cap produces systemic distortions. The model conceived by the original constituent presupposes that the value of the Justices’ stipend reflects transparently the institutional remuneration of the office, functioning as a legitimate reference for the entire salary structure of the State. As has been seen since 1988, when that update does not occur in a direct and structured manner, space opens for fragmented compensatory mechanisms that strain the constitutional design and weaken the coherence of the system. Preserving the model devised by the original constituent requires transparency, fiscal responsibility, and an institutional approach to the issue.
