On February 5, Minister Flávio Dino ordered 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 Associação de Procuradores Municipais de São Paulo (Reclamação 88.319). A similar, also single-judge, 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 concrete cases and reaffirms the Supreme Federal Court’s consolidated understanding regarding the binding nature of Article 37, XI, of the Constitution of the Republic. Since the Constitution’s promulgation in 1988, this provision sets the remuneration cap for the entire civil service, a rule that, according to the Minister, has been breached through the payment of supposed indemnity items, the famous 'penduricalhos'. In a panel session held on February 25, the STF Plenary began to analyze the single-judge decisions. The proceedings, however, were suspended. The suspension, although it did not nullify the effectiveness of the precautionary measures granted, has already been understood as a mechanism that will allow a broader analysis of all the cases in which the topic is discussed, as well as coordination among various government bodies for a solution that is 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 civil service, especially senior officials.
The constitutional cap as a norm of full effectiveness
The aforementioned Art. 37, XI, of the Constitution establishes that the remuneration and the stipend of holders of public offices, functions, and employments 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 benefits beyond the fixed cap, expressly providing that it includes personal advantages or of any other nature.
As already settled by doctrine and case law, this is a norm of full effectiveness and immediate applicability, which does not depend on regulation to produce its effects. Such a normative mandate binds all Branches and all federative entities.
The rule in the referenced 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 administrative legal regime: legality, by subjecting civil servants’ pay to objective, previously fixed parameters; morality and impersonality, by preventing personalized or ad hoc pay arrangements; equality, by ensuring that the exercise of public functions takes place within common pay limits; and fiscal responsibility, by imposing rationality and predictability on public spending.
More than a limit on the amount of pay, therefore, the constitutional cap was conceived as an instrument for affirming the republican principle. In several precedents, the Supreme Federal Court has noted that setting a national cap seeks to avoid pay distortions incompatible with equality and with the idea of public service as a function exercised in the name of the collective. To overcome a reality of super-salaries and 'penduricalhos' that formed part of the pay of civil servants 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 pay system.
The constitutional tension: remuneration vs. indemnity
Despite the clarity of the constitutional text, since the promulgation of the Constitution of the Republic there has been intense debate around the so-called indemnity items. The thesis that prevailed was that amounts relating to the thirteenth salary, one-third vacation pay, 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 flows from the system’s own logic: indemnity is not to be confused with consideration for services rendered or with a patrimonial increase, but is either an express norm of the constituent itself (in the case of the thirteenth salary and the one-third vacation pay) 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 being artificially labeled as indemnities, with the purpose of avoiding the application of the cap.
The first reason seems quite evident: there is a mismatch regarding the amount set as the cap and, thus, this device is used to benefit certain public agents, instituting super-salaries, mainly through unreasonable allowances.
Some examples are paradigmatic. The housing allowance, paid for many years to judges, including those who owned a home in the city where they were assigned, to cover housing expenses. There is also the case of the “suit allowance,” received by Deputies of Rio de Janeiro and Mato Grosso, among other states, to allow the purchase of clothing appropriate to the exercise of their elected offices.
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 pay cap — has lagged in real terms relative to inflation and the evolution of public careers. This lag produces systemic effects. Since the cap is referenced to the Justices’ stipend, its update automatically impacts the entire pay structure of the civil service. A formal increase in the Court’s stipend implies, reflexively, a rise in the maximum limit applicable to all federative entities and Branches.
In that 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 whom the so-called “constitutional reducer” is applied to their pay. Indeed, in many careers gross pay 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 pay of numerous public agents.
Against that backdrop, over time the practice consolidated of creating indemnity items or specific benefits that do not automatically reverberate across the entire national pay 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 emerges when such mechanisms come to operate not as genuine indemnity, but as an indirect instrument of pay 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 by parallel avenues undermines the systemic coherence of the model.
That is perhaps the most delicate issue in the debate: it is not only a matter of curbing specific excesses, but of addressing a structural distortion created by the combination of the lag in the constitutional parameter and fragmented pay solutions.
In any event, STF case law is firm that the legal nature of the item does not follow from the nomenclature adopted. In addition, the creation of indemnity items requires express legal authorization. And, in any case, it is forbidden to circumvent the cap by artificially reclassifying pay advantages.
The recent decision and the reaffirmation of the Constitution’s normative force
Although without addressing the merits, by ordering a nationwide review of 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 decision’s effects, on the grounds that there has been repeated noncompliance with the Court’s case law.
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 Constitution’s normative force. As stated before: 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 in fact have their pay adjusted without monetary distortions, one cannot set aside the clear conclusion that the pay cap is not an ornamental clause. Thus, once the limit is set by the Constitution, it is for the Administration to comply with the rule, without artifices to circumvent it.
The decisions under discussion, in this way, reaffirm the constitutional commitment to setting a single, objective, nationwide limit for the remuneration of public agents, reinforcing the premise that, in a Democratic State under the Rule of Law, administrative creativity cannot override the Constitution.
However, 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 constituent presupposes that the value of the Justices’ stipend of the Supreme Federal Court transparently reflects the institutional remuneration of the office, functioning as a legitimate reference for the State’s entire pay structure. As seen since 1988, when that update does not occur directly and in a structured way, space opens up for fragmented compensatory mechanisms that strain the constitutional design and weaken the system’s coherence. Preserving the model envisioned by the original constituent requires transparency, fiscal responsibility, and an institutional approach to the issue.
