Chamber approves MP that creates Brazil Aid with mechanisms to expand program

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This Thursday (25th), the Chamber of Deputies approved the proposal to create the Auxílio Brasil, a social program created by President Jair Bolsonaro to replace Bolsa Família, whose brand is linked to PT administrations.

By 344 votes in favor and none against, the House’s plenary approved the version presented by the rapporteur, deputy Marcelo Aro (PP-MG), who suggested changes with the potential to expand the number of families served by the program and should put pressure on the budget. Auxílio Brasil as early as 2022. There was even support from opposition parties such as PT.

Today, Bolsa Família serves 14.7 million families. With Auxílio Brasil, the government intends to expand the social program to 7 million. However, the rules approved on Thursday by the Chamber may lead to the assistance of 20 million families — 3 million more than foreseen by Jair Bolsonaro’s administration.

Now the proposal goes to the Senate. As it is an MP (provisional measure), the Bolsonaro act has immediate effect and has already created Auxílio Brasil. However, the bill needs the approval of the two Houses of Congress until December 7th in order not to lose its validity.

The changes in Auxílio Brasil approved by the Chamber should increase the coverage of income transfers to the most vulnerable population, putting pressure on the budget for the social program if the government manages to guarantee the amount of nearly R$ 86 billion for next year — an estimated amount currently to be provided for in the 2022 Budget.

For real in 2022, Auxílio Brasil needs to be fully implemented this year so as not to violate the electoral law, which prohibits increases in social spending in an election year.

The government’s allied base supported a measure outlined by the rapporteur whose objective is to prevent there being a waiting list to join the program.

Today, by law, the government is not required to serve all families that are within the poverty and extreme poverty range.

The queue, which currently has around 1.2 million registrations, is formed because the Bolsa Família budget has become smaller than necessary to serve everyone who had their registration analyzed by the government.

The Auxílio Brasil budget for 2022 considers that 17 million families will be served — coverage today is 14.7 million.

However, in addition to the queue that has already formed, there has been an increase in the number of families that have registered in the poverty and extreme poverty range through the Cadastro Único (system for social programs), as reported by government technicians to sheet in October before the end of emergency aid.

Another change in the social program in the version approved by the Chamber raises the poverty and extreme poverty levels (criteria for a family’s entry into the social program). This also makes room for more people to take part in the cash transfer.

In early November, the government updated these criteria. Today, to enter the Bolsa Família, the Cadastro Único considers people with a monthly income of R$100 per family member to be in extreme poverty.
Income between R$ 100.01 and R$ 200 is classified as a situation of poverty.

The text approved by the Chamber raises these ranges to R$ 105 per family member (extreme poverty) and R$ 210 (poverty). As a result, more people are able to receive the income transfer through Auxílio Brasil.

The approved version also relaxes the rules for calculating this per capita income. For example, occasional or seasonal rents are not included in the calculation.

According to Congress technicians, the elevation of the bands as a criterion for accessing the program and the determination that there can be no waiting list will expand the Auxílio Brasil, putting pressure on the amount that will be set aside for cash transfers as early as 2022.

“By clearing the queue and by changing the extreme poverty and poverty ranges, we will go beyond the 20 million families covered by this program,” said Aro. The government’s projection for 2022 is 17 million families.

The PT criticized the end of Bolsa Família, but ended up voting in favor of the text. Party deputies said that Bolsonaro adopted the measure with an electoral bias, to end a PT brand.

“He wants to equip the structures of the Brazilian State, dismantling fundamental public policies”, said Deputy Henrique Fontana (PT-RS).

The vote of the MP that creates the replacement of Bolsa Família was scheduled for Tuesday (23), but only took place on Thursday, as the government had to articulate changes in the report.

In a preliminary version, Aro wanted to provide for an automatic correction of the amount of income transferred monthly to the poorest population in the country. The readjustment would be by the INPC (inflation index focusing on the lower classes).

Due to pressure from the economic team, the majority of the Chamber did not support this item. The team of minister Paulo Guedes (Economy) is against measures that impose an automatic increase in expenses.

Party leaders allied with the Planalto Palace heeded the government’s request and signaled to Aro that the automatic readjustment of the benefit paid by Auxílio Brasil was met with strong resistance in the Chamber. Faced with this scenario, the rapporteur backed off

The text approved by the Chamber also removed the part that allowed beneficiaries of the social program to contract payroll-deductible loans. The proposal was from the Ministry of Citizenship and provided for up to 30% of the income to be committed. This measure was overturned by the rapporteur after pressure from the opposition.

The deputy also proposed that more beneficiaries of the program are entitled to a bonus in case they increase their family income. The Ministry of Citizenship wants to pay, for up to two years, this extra amount for beneficiaries who get formal employment (with a formal contract). According to the government, it is a way to encourage families to no longer depend on income from the social program.

According to Aro’s version, the bonus must be paid even to beneficiaries who act as individual microentrepreneurs (MEI) and self-employed workers.

However, the rapporteur’s idea is that this extra amount is paid in National Treasury bonds. The accumulated amount could be redeemed after leaving the social program, losing a job or closing the microenterprise.

This measure was devised by senator Tasso Jereissati (PSDB-CE), author of the Social Responsibility Law bill that is being processed in Congress.

Another suggestion made by the senator that was incorporated into the MP was the forecast of goals in the social area. According to the text, the country’s poverty rate, for example, should drop to 10% in three years.

In addition to approving the MP that creates Auxílio Brasil, the government needs the approval of Congress to increase the spending margin in the Budget and, therefore, fulfill Bolsonaro’s promise to raise the average benefit of the program from the current level of R$ 220 per month for at least R$400.

The expansion of the spending margin will take place through the PEC (proposed amendment to the Constitution) of the Precatório, which is under analysis by the Senate. With this PEC, it will be possible to expand the program’s budget to around R$ 86 billion next year, when Bolsonaro intends to run for re-election.

The bases of Auxílio Brasil follow the Bolsa Família format. Anyone who is already in the program created in the PT management will be automatically transferred to Bolsonaro’s version.

Bolsonaro’s program changes the way in which each family’s benefit is calculated. Altogether, there will be nine types of benefits that, in the end, will be gathered in the amount to be received.

However, the main difference between Auxílio Brasil and Bolsa Família is the government’s intention to increase funding for the program.

With an eye on the 2022 elections, Bolsonaro was advised by allies to allocate more resources to that area.

Its popularity rose at the height of emergency aid, but now it continues to decline — even with the increase in the Auxílio Brasil budget, the new program is still far from reaching the coverage of needy families that emergency aid had.

The MP do Auxílio Brasil withdraws resources destined to city halls for the education of needy children. The same project establishes the payment of vouchers directly to private day care centers.

In the vote in the plenary, the deputies approved only one highlight (suggestion of amendment to the text of the rapporteur). The change includes the Single Registry in the Organic Law of Social Assistance (Loas). Currently, this structure is provided for in a decree of the Executive Power.

The text approved by the Chamber makes it clear that, in Auxílio Brasil, it will still be possible to enroll in the Cadastro Único in person at the Specialized Reference Centers for Social Assistance (Creas) and at the Reference Centers for Social Assistance (Cras).


Main differences between Bolsa Família and Auxílio Brasil

Average benefit amount

  • Bolsa Família: R$190 (until October)
  • Brazil Aid*: BRL 220 (November) and more than BRL 400 (as of December)*

Number of families served

  • Bolsa Família: 14.7 million
  • Brazil Aid*: 17 million

Access criteria (extreme poverty and poverty line)

  • Bolsa Família: R$89 per family member (extreme poverty) and R$178 (poverty)
  • Brazil Aid**: R$ 105 (extreme poverty) and R$ 210 (poverty)

Benefits (used to calculate the amount to be transferred to the family)

  • Bolsa Família: there were four types (basic benefit; variable benefits; variable benefit linked to the adolescent and benefit to overcome extreme poverty)
  • Brazil Aid: there are nine types (early childhood benefit; family composition benefit; benefit to overcome extreme poverty; school sports aid; junior scientific initiation grant; child citizen aid; rural productive inclusion aid; urban productive inclusion aid; transition compensatory benefit )

*Government plan from December and depends on the approval of the PEC dos Precatório

**Levels approved by the Chamber and depend on a vote by the MP in the Senate

Source: Ministry of Citizenship

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