Brazil aid is unconstitutional and there is a risk of over-indebtedness, says Prosecutor General to the STF

The Attorney General of the Republic, Augusto Aras, stated to the Federal Supreme Court (STF) that the law that releases the payroll loan for beneficiaries of the Auxílio Brasil and Benefício de Prestação Continuada (BPC) is unconstitutional. Five days before the second round of elections, President Jair Bolsonaro (PL), candidate for re-election, regulated Law 14,431/2022 through an ordinance published in the Official Gazette.

For the PGR, by allowing an economically vulnerable group to commit an important percentage of their monthly income, a precedent is set for the “over-indebtedness” of families. According to Aras, the law violates constitutional principles of human dignity and consumer protection.

The demonstration refers to a direct action of unconstitutionality filed by the PDT. The process is being reported by STF Minister Kassio Nunes Marques. In the request, the association alleges that the law offers potential harm to the less favored population: the elderly, people with disabilities and families in poverty.

The attorney general also stated that the Supreme Court has already decided that the principle of free initiative does not prohibit the State from acting to guarantee the achievement of indispensable objectives for the maintenance of social cohesion. “What the contested law did, by increasing the limits for (or enabling) the contracting of loans with payment deducted from the payroll by the INSS or the Union, was to remove a layer of protection for the rights of the low-income population”, wrote the PGR.

ECONOMIC CRISIS

In the assessment of Augusto Aras, in the scenario of a serious economic and social crisis, due to the covid-19 pandemic and the war in Ukraine, for example, this portion of the Brazilian population is even more vulnerable to creditor financial institutions.

The maximum amount that could be contracted would be the one in which the installments committed up to 40% of the monthly amount of the benefit. However, instead of considering the current minimum value of the benefit (R$600), which is only valid until December, the reference must be the original value of R$400. Thus, the installment cannot exceed R$160.

However, Consignado Auxílio, launched on October 11, was suspended for the first time between October 21 and 24, by Caixa. Afterwards, the institution suspended the payroll loan for beneficiaries of the Auxílio Brasil until November 14. According to Caixa, the suspension was caused by the processing of the Auxílio Brasil payroll, an operation that also involves Dataprev and the Ministry of Citizenship.

After remaining suspended for two weeks, payroll loans for beneficiaries of the program and minimum income were released again by Caixa Econômica Federal earlier this week. The consignment was suspended since the 1st of November and, as announced on the first day of this month, it resumes operations this morning.

With information from Correio Braziliense