MercoPress. South Atlantic News Agency

Rousseff’s dispute with the Judiciary could cost the Treasury 27bn dollars

The Justice Palace in Brasilia

Brazil's government faces as much as 74 billion Reais (40 billion dollars) of unbudgeted expenses in 2012 stemming from lawsuits awaiting judgement at the country's Supreme Court, the Correio Brasilense newspaper reported on Sunday.

The principal risk to the government comes from a case that will determine if workers who take early retirement on a partial pension can return to work and eventually qualify for a full pension, the newspaper said, citing a report from the country's Attorney General's office, which represents the government in court.

If the court rules in favour of the retirees, the government faces an estimated 50 billion Reais (27 billion dollars) of new payments to about 500,000 workers, said Correio Brasilense, the principal paper in Brazil's capital, Brasilia.

One Supreme Court judge has already ruled in favour of allowing workers to transform their partial benefits into full benefits by returning to work after retirement, the paper said.

The case comes as tension grows between the government of President Dilma Rousseff and the country's judges. Rousseff has resisted a pay increase for judges in the 2012 budget.