Brazil aid of BRL 400 creates distortions and benefits more smaller families

The creation of an extraordinary benefit to temporarily boost the Auxílio Brasil and guarantee a minimum of R$ 400 could lead to distortions and disproportionately favor families with fewer members, according to specialists consulted by the leaf.

The payment of the extra amount was determined by President Jair Bolsonaro (PL) in an interim measure published on Tuesday (7).

According to the benefit logic, families with only one person in the composition will receive the same amount as those with two or more members. This rule makes the distribution of resources unequal.

Of the total 14.5 million families covered by Auxílio Brasil, 13 million will receive the extraordinary benefit and, therefore, will be equal to the same R$400, regardless of size.

In September 2021, the most recent data made available by the Ministry of Citizenship, 2.24 million families benefiting from Bolsa Família had a single member, while 4.7 million were made up of four or more people.

“A person in poverty living alone will earn R$ 400, and a single mother with three young children will also earn R$ 400. The amount per person is very different”, says sociologist Leticia Bartholo, who was assistant national secretary of Citizenship Income from 2012 to 2016.

Economist Marcelo Neri, director of FGV Social and former president of Ipea (Institute for Applied Economic Research), also sees a setback in setting a floor of R$ 400.

According to him, poorer families are numerous and have more children. That way, they would need more help.

“[O valor de R$ 400] It may seem like a good marketing piece, but it’s not a good program to fight poverty,” says Neri. “It turns out to be neither a social nor an economic program, but an electoral one.”

Wanted, the Ministry of Citizenship did not comment on the criticisms. The ministry said that “this administration is committed to ensuring a minimum income for the population in a situation of poverty and extreme poverty, with fiscal responsibility”.

Auxílio Brasil, which replaced Bolsa Família —a social program that was the hallmark of PT administrations—, has in its basic structure three types of benefit, paid according to the number of eligible members.

Larger families tend to receive higher amounts than those with only one member, ensuring a minimum amount per capita and following good practices in policies to combat poverty.

The MP published on Tuesday, however, says that the extraordinary benefit will be paid in the amount equivalent to what is needed to reach the floor of R$400.

In November, the average ticket paid by Auxílio Brasil was R$224.41, but there are families with few members earning less than R$100.

In practice, they will receive an extraordinary benefit above what will be paid to households that, as they already have more members, receive a richer Brazil Aid.

In addition to disregarding the size of the family, the extraordinary benefit ignores the beneficiary’s degree of need. Your income may put you in extreme poverty —up to R$105 per person— or poverty —up to R$210 per person—, but the minimum transfer amount will be the same.

Bartholo affirms that the Bolsonaro government has so far not pointed out any technical grounds for choosing the value of R$ 400. “Perhaps it would be more appropriate to serve a larger number of families with a lower value”, he says.

At least 2.5 million families are awaiting inclusion in the social program. According to the expert, there are people in extreme poverty in that queue.

As the government still does not have all the necessary space in the Budget to expand Brazil Aid in 2022, these citizens are still waiting for the benefit.

The inclusion will only come after the full approval of the PEC (proposed amendment to the Constitution) of the Precatório.

Although the change in the spending ceiling — a rule that limits the advance of spending to inflation — already ensures a slack of BRL 62.2 billion, another BRL 43.8 billion to be opened depends on the sub-ceiling for payment of judicial debts of the Union The second measure is awaiting the vote of another PEC in Congress.

For Neri, it is “unacceptable at this point in the championship” for the government to repeat the design of emergency aid launched in April 2020, still at the beginning of the Covid-19 pandemic, with the same amount of R$600 for vulnerable families, regardless of the number of members.

By 2021, for example, the format had already been modified to provide for lower payments for one-person families and higher for single mothers.

Another failure, according to the director of FGV Social, is to base social policy again on a temporary transfer. The extraordinary benefit will be paid in December 2021 and can be extended until the end of 2022.

The most serious thing, however, is precisely the disparity in per capita values, especially in the case of families with children. “You’re being more generous, but you’re not seeing the differences in needs between people,” says Neri.

He draws attention to the fact that the poverty rate in the population aged 5 to 9 years is 19.77%, almost double the average for all age groups (10.97%) and more than seven times the rate observed among people aged 60 years and over (2.57%).

Furthermore, the effect of the social program is more significant among children.

Simulations carried out by the economist show that, without Bolsa Família, the poverty rate would be 2.7 percentage points higher in the 5 to 9 age group. Among people aged 60 years and over, the difference would be 0.16 percentage point.

There is also an incentive for people who are now members of the same family to share their records, just to gain the new turbo benefit.

The Ministry of Citizenship, in turn, states that “the institution of the extraordinary benefit is intended to support the most vulnerable Brazilians in the recovery and strengthening of their economic autonomy”.

The ministry also says that Auxílio Brasil was thought of as an “effective response” to the needs of Brazilians affected by the socioeconomic consequences of the pandemic and that the program “boosts the recovery of the economy through the direct transfer of resources to families”.