Government reduces from 40% to 5% the discount limit for payroll in Auxilio Brasil

The government of President Luiz Inácio Lula da Silva (PT) reduced from 40% to 5% the discount limit on the benefit of social programs, such as Auxílio Brasil, referring to the payment of payroll loans.

In addition, it will be worth an interest rate lower than that determined last year, from 3.5% to 2.5% per month. And the measure limits the number of monthly and successive installments to six – today it can be up to 2 years. The measures restrict household indebtedness.

The change appears in an ordinance published this Wednesday (9) by the Ministry of Development and Social Assistance, Family and Fight against Hunger, commanded by Wellington Dias.

The text amends an ordinance from last year that regulated the measure. Payroll loans to beneficiaries of Auxílio Brasil was one of the main campaign promises of then-president Jair Bolsonaro (PL), and was published in August 2022.

The then Minister of Citizenship, João Roma, responsible for the program, said that the measure would be an instrument to give access to cheaper credit to almost 23 million families contemplated by the two social programs.

Consumer protection entities and specialists, in turn, criticize the initiative for opening the door to greater indebtedness of a portion of the population that already depends on government transfers to cover their basic expenses.

After the second round of elections, Caixa Econômica Federal began to limit the offer of its lines of credit and changed the analysis of payroll loans from Auxílio Brasil. The concession is now restricted to customers with a good risk analysis.

In November, the bank started releasing less money in concessions to social program beneficiaries, limiting the commitment of income to 20%, against 40% – the ceiling allowed by law and the standard amount before the elections.

According to members of Caixa’s Board of Directors heard by Sheetthe bank restricted lending in all lines of credit offered by the institution after having reached the budget limits for the year.

In early November, the Minister of the TCU (Tribunal de Contas da União) Aroldo Cedraz denied a request by the Public Prosecutor’s Office for Caixa to stop making new payroll loans to beneficiaries of the Brazil Aid.

The request had been made by sub-prosecutor Lucas Furtado before the second round of elections. He had also requested an evaluation of the criteria adopted by the public bank for the concession, with the aim of preventing its use for purely electoral purposes.

Cedraz ordered the filing of the records, stating that the information presented by Caixa in the process “completely ruled out the alleged irregularity regarding non-compliance with operational procedures or essential risk analyzes prior to the decision to offer the payroll loan to the beneficiaries of the Aid Brazil”.

Research carried out by Datafolha, last December, showed that two out of three Brazilians benefited by Auxílio Brasil did not take and do not intend to take out the payroll loan aimed at this public.

There are 15% who declare having already taken out the loan in this modality. Another 13% did not, but intend to take out the credit line. Another 66% did not and do not intend to take this credit, according to the survey carried out on the 19th and 20th of December.

In the previous survey on the subject, from October 25th to 27th, 18% declared that they had already taken out the loan. Another 19% had not done so, but intended to take out the credit line. There were 58% who did not intend to do it.