“Brazil Income” Plan Should Serve Eight Million More People Than “Family Grant”

RIO DE JANEIRO, BRAZIL – The new assistance program of the Bolsonaro government, named Renda Brasil (Brazil Income), is expected to serve eight million more people than those currently covered by the Bolsa Família (Family Grant).

The average monthly benefit is expected to range from R$250 (US$50) to R$300, higher than the R$190 currently paid on average by the existing program, which is linked to PT (Workers’ Party) administrations.

Since the government’s inception, the economic team and the social area have been working on the development of a new cash transfer program to create a brand exclusive to the Bolsonaro government. The project gained momentum after the emergency aid, a social benefit granted to 66 million Brazilians to help combat the effects of the pandemic lockdowns.

Currently, 14.2 million families benefit from the Bolsa Família, but since April, 95 percent of them have been receiving the aid designed to help them face the crisis caused by Covid-19. The plan is that, with the end of the emergency period, the Bolsa Família beneficiaries will be included in the new program, along with a further eight million people (about 2.5 million families).

The Bolsa Família uses each family’s circumstance, classified as either extreme poverty (income up to R$89 per person) and poverty (up to R$178 per person) as the cut-off line for granting the benefit. The Renda Brasil should raise this cut-off line to R$100 and R$250 per month, respectively.

In the new program, a bonus is expected to be created for families with children who pass the year and perform well in school. The bonus will be awarded at the end of each year. Families who have youths in vocational training will also benefit.

Beneficiaries with small children will also earn more. The Bolsa Família already provides a benefit for mothers with newborns, from zero to six months, but the aim of Renda Brasil is to extend this benefit to children up to the age of three. The plan is for parents to use this voucher to enroll their children in private daycare centers.

Although the values and scope of the new program have not yet been defined, the government will propose to Congress a review of programs considered ineffective.

These include salary bonuses (benefit of a minimum wage for those who earn up to two levels, but that ends up also being received by middle-class youths at the start of their careers) and closed-season insurance (paid to artisanal fishermen during the fish reproduction period, when fishing is prohibited, but with a high level of irregularities), in addition to the family allowance (paid to formal and self-employed workers who contribute to Social Security, according to the number of children).

Termination of the closed-season insurance and the family allowance are dependent on the approval of a bill, which requires majority support in Congress. However, it is also not an easy task because similar attempts in other governments have not prospered.

To end the salary bonus, a Proposed Amendment to the Constitution (PEC) must be passed, which requires support from three-fifths of the Chamber (308 of 513 deputies) and the Senate (49 of 81 senators). Several governments have unsuccessfully tried this in the past, including a restriction on welfare reform, but the measure was withdrawn.

The government’s plan is for the new welfare program to have an outlet: those covered will automatically be eligible for the new employment program, an expanded version of the Yellow Green Card. Beneficiaries will be able to leave the informal sector and join the formal labor market in a position with a lower salary and reduced charges.

Source: Gazeta Brasil