Brazil Aid budget is smaller than Bolsa Família’s budget

A new federal government transfer program, Auxílio Brasil should have fewer resources in its first year than its predecessor, Bolsa Família, had in 2021. This is what the Annual Budget Law Project (PLOA) of 2022 provides for the government sent it to Congress on Tuesday (31).

The proposal allocates R$34.7 billion for the Aid, slightly below the amount programmed for Bolsa Família in 2021 (R$34.9 billion).

The 2022 PLOA also sets as a goal to include 14.7 million families in the new program, unlike what was being announced by the economic team, whose intention was to reach 17 million families.

While there is no end to issues such as the reform of the Income Tax, the eventual installment payment of precatories and the possibility of privatizing state-owned companies in 2022, the government opted for a conservative posture in the PLOA. The proposal provides for the full payment of court orders in 2022 (R$ 89.1 billion), which, if confirmed, will reduce the space for other expenses.

For this reason, at least for now, the Budget does not fulfill President Jair Bolsonaro’s promise to raise by at least 50% the average ticket paid by Bolsa Família, currently at R$192.

“We know that the pandemic has brought food inflation around the world. So we can’t just leave the most vulnerable unattended. so now [está] We decided on a minimum proposal of 50% for Bolsa Família, which is now called Auxílio Brasil”, said Bolsonaro on August 9, when he took the provisional measure that created the new program to the Chamber of Deputies.

But the economic team does not rule out possible changes to the budget in the coming months, which could allocate more resources to the social program. “What is in the proposal is the maintenance of the budget, even with the new design, it has to adapt to this size. In the course of it, it can be modified”, said the special secretary of the Treasury and Budget, Bruno Funchal, at a press conference on Tuesday. Also according to Funchal, the Ministry of Citizenship will be in charge of managing the resources and making possible adjustments to meet the demand.

Among other issues, the government is awaiting the approval, by Congress, of the reform of the Income Tax. This is because the government intends to allocate to Auxílio Brasil the money collected from the taxation of dividends (estimated at R$19 billion per year).

“Since we are a stamping country, we will have to take the dividends and say that a part will be permanent for Bolsa Família. It is easy to pay the additional 20% that the program needs, it could be even more, but we are not going to increase that much, let’s go increase just a bit,” said Economy Minister Paulo Guedes in July.

The government can also wait for the consequences of the privatization of Eletrobras, for example, which may add more resources to the social program in the following years.

In the process of capitalization of the state-owned company, foreseen in the government’s accounts, to take place until the beginning of 2022, the binational hydroelectric plant Itaipu and Eletronuclear cannot be privatized. A new state-owned or mixed-capital company must manage the two companies.

As of 2023, when Itaipu’s loans and financing must be paid off, at least 25% of the company’s financial results will be allocated to a social program of the federal government. Although the MP sent to Congress did not specify the recipient of the funds, it is speculated that the money may go to Auxílio Brasil.

In the MP that institutes the program, the government still speaks, without going into details, of using “multiple sources” of funding, “including partnerships with the private sector, federative entities, other public powers, multilateral organizations, civil society organizations and others national and international institutions”.

How much resources will be allocated to each benefit

The design of the Auxílio Brasil program foresees nine benefits, grants and scholarships. The MP that instituted the program did not define the values ​​for each one, but the 2022 PLOA already directs the total resources for each one.

Without going into details, the budget piece defines that practically the entire budget for Auxílio Brasil goes to four benefits, called “financial”. They will have little more than BRL 34.2 billion, or 98.7% of the total budget. Are they:

  1. Early Childhood Benefit: For families with children up to 36 months of age, paid by a member who meets this condition;
  2. Family Membership Benefit: For families with pregnant women or people aged between three and 21 years old, paid per member in this condition;
  3. Benefit from Overcoming Extreme Poverty: Paid per family, for those who have not surpassed the extreme poverty line after the payment of the first two benefits (Early Childhood and Family Composition); and
  4. Transition Compensation Benefit: To compensate families that have had a reduction in the total amount received as a result of the end of Bolsa Família and the new financial benefit structure provided for by Auxílio Brasil.

For the other five types of grants and scholarships, only R$455 million, or 1.3% of the program’s total budget, are earmarked.

According to PLOA 2022, BRL 187.5 million they go to encouraging the production, donation and consumption of healthy food by family farmers, under the Rural Productive Inclusion Aid, to how only families living in municipalities that sign a term of adhesion with the Ministry of Citizenship will be eligible for the benefit.

At the Child Citizen Assistance, intended for “child access, full or part-time, to day care centers, regulated or authorized, that offer early childhood education”, the government will provide BRL 137.5 million. According to the PLOA, the benefit will be paid “to the person responsible for families with children aged 0 to 48 months”.

A figure of BRL 85.9 million is scheduled for the Urban Productive Inclusion Aid, aimed at citizens who are already beneficiaries of Auxílio Brasil and who get a job contract.

O School Sport Aid, for students aged between 12 years old and 17 years old who excel in official competitions of the school games system, should receive a slice of BRL 22 million of the total.

Finally, the call Junior Scientific Initiation Scholarship, aimed at students who stand out in academic and scientific competitions linked to themes of basic education, will have a budget of BRL 22 million.

How will Brazil Aid be and who will be able to participate

Auxílio Brasil will be aimed at families in extreme poverty (which, by current criteria, have a monthly income of up to R$89 per person), and also families in poverty (monthly income between R$89 and R$178 per person) who have, in their composition, pregnant women or people aged up to 21 years old. The government must update the poverty line parameters – which have been frozen since 2018 – in later regulation.

According to what the government established in the MP, the beneficiary families of Auxílio Brasil must comply with requirements such as taking the prenatal exam, complying with the national vaccination calendar and respecting the minimum school attendance. Further details about the rules and penalties, in case of non-compliance, must be defined in the regulation.

Beneficiary families that have increased income may be supported in Auxílio Brasil for up to two years, as long as the per capita family income remains below up to 2.5 times the ceiling defined for the situation of poverty.

Content edited by:Fernando Jasper