MPF sees an existential minimum of R$303 as ‘whimsical’ and asks for a review

The MPF (Federal Public Ministry) released on Monday (15) a technical note in which it contests the existential minimum of R$ 303, defined by law. According to the document, the value is negligible and distorts the original meaning of the proposal.

According to the note, the Over-Indebtedness Law should serve to preserve consumer rights, but, in the way it was regulated, it does not guarantee sufficient income for basic domestic commitments and expands the possibilities of indebtedness for the most vulnerable population.

A decree by President Jair Bolsonaro (PL), published on the 27th, regulated the rules that define an over-indebted individual and the existential minimum that cannot be committed to debt.

The text establishes that the minimum amount a person needs to pay basic expenses is a quarter of the minimum wage, which is equivalent to R$ 303. The decree defines this as the existential minimum — an amount that cannot be compromised to pay off debts.

In practice, an indebted individual who requests a conciliation hearing to make a new proposal to pay his debts has the guarantee that at least R$ 303 will not be compromised and can be used for subsistence.

The MPF note, prepared by the Consumer Work Group, also questions the fact that the decree allows, in practice, that expenses not related to consumption, such as real estate financing and payroll-deductible loans, can compromise the existential minimum.

For the agency, the law violates the consumer protection code, which defines that the treatment of over-indebtedness must consider any financial commitments, including “credit operations, term purchases and continued provision services”.

The MPF also warns of the “aggressive harassment” of financial institutions that benefit from vulnerable and poorly educated populations. According to the Federal Prosecutor and coordinator of the Consumer Work Group, Mariane Guimarães, the regulatory authority should avoid this type of practice to ensure a healthy balance in consumer relations.

For Maria Paula Bertran, a professor at the Ribeirão Preto Law School and responsible for the Indebted Support Program, this measure puts people who want to pay their debts below the poverty line.

Also according to the professor, the law does not consider that the existential minimum varies from one individual to another and argues that the value should be defined on a case-by-case basis, varying, for example, according to the costs of the city where the individual lives, their expenses doctors and the number of children.

The same idea was proposed by Idec (Brazilian Institute for Consumer Protection), which had also contested the decree.

For those who defend the document, such as Febraban (Brazilian Federation of Banks), it allows the Over-indebtedness Law, which was approved more than a year ago, to be applied in practice. According to the federation, an existential minimum for all Brazilians brings “legal security”.