The Unlikely Brazilian Social Policy Response to Coronavirus – Basic Income Emergency Aid

Created with Sketch. 26.6.2020
Created with Sketch.
Luiz Alonso De Andrade

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Despite controversies involving the Brazilian government’s response to coronavirus, it was surprisingly able to deliver a relevant package of policies aimed at tackling both social and economic downturns. Among these, a new cash transfer policy, called Auxílio Emergencial (Emergency Aid), is particularly relevant. Designed over Bolsa-Família and national social security instruments, it pays three monthly installments of average R$ 649.15 (equivalent to € 248.56, adjusted for 2019 OECD purchasing power parity to Finnish value) to 59 million people in the country.

Brazilian Federal Social Policy Background

Taking a quick picture of Brazilian federal social policies, according to the government’s transparency site (Portal da Transparência), R$ 708.97 billion were spent in cash transfer programs in 2019, amounting to almost 22% of total government spending. Most of it (81%) concerns social insurance payments, whereas the remaining 19% is paid by focal social assistance (Programa Bolsa-Familia plus Benefício de Prestação Continuada – BPC, a monthly grant paid to vulnerable elderly and disabled) and unemployment-related transfers.

PROGRAM NATURE TARGETTING   SPENT
(BILLION R$)
% TOTAL RECIPIENTS
(MILLION)
AVG MONTHLY VALUE R$ AVG MONTHLY VALUE €*PPP
Bolsa Família2 Social assistance; means-tested; conditioned Means-tested, conditioned, vulnerable families 31.16 4% 14.2 189.21 72.45
BPC elderly and disabled1 Social assistance; means-tested Means-tested, socially vulnerable elderly and disabled 64.54 9% 4.95 998 382.14
Unemployment benefits1, 4 Contributive Unemployed, fishermen on the closed season, rescued workers, low-income workers 37.39 5% 8.37 1274.65 488.07
Social Insurance1, 3 Contributive Old age, disabled, survivor pension receivers, sick and maternity and sick leave 575.87 81% 5.19 1378.37 527.78
Total/weighted avg 708.97 100% 32.71 778.03 297.91

Table 1. Brazilian Federal Social Policy Programs Spending 2019 Figures. Author’s elaboration.

Sources:
1 Portal da Transparência.
2 Ministério da Cidadania, values based on september/2019.
3 Boletim Estatístico da Previdência Social.
4 Fundo de Amparo ao Trabalhador. Series for unemployment benefits extrapolated from 2015 data, except for closed season fisherman’s benefit.

Despite some overlapping, these benefits are usually not cumulative, either mandatorily or by accounting for each other under means-testing income parameters. Thus, it is legitimate to say that they reach circa 30 million Brazilians.

Most of the means-testing and conditionalities involved are assessed through database crossing, involving at least two major federal registries: 1) CadÚnico (Single Registry), which aggregates declaratory information from vulnerable families, captured through interviews in municipal social assistance instruments; 2) CNIS, standing for National Social Information Registry, which aggregates, tax, employment, social cash transfers, rural landowning and activity information to create a ‘complete citizen social history’.

Besides, social insurance sickness allowances and disability-related benefits demand in-person medical assessment for application and maintenance, while BPC requires psychosocial evaluation. Finally, Bolsa-Família requires biannual declaration updates and conditionality checks, which include, for instance, proving that kids are vaccinated, attending school, and family health programs regularly.

Emergency Aid’s First Figures and its Implementation Arrangement

Among other federal social policy-related initiatives, the Emergency Aid is the one which is drawing the most attention, given its successful, but politically controversial implementation, as key characters in the Brazilian government were expressly against its design. Previously nicknamed the ‘coronavoucher’, the benefit was granted according to interoperated registry data, neither depending on the street- or screen-level bureaucracy intervention. So, despite being means-tested, and thus paid only to informal workers and unemployed citizens not receiving other allowances (except Bolsa-Família), there is almost no discretion involved in case-handling, and thus no leeway for process manipulation.

Further, the aid was assigned and paid automatically to all Bolsa-Família recipients (substituting the conditional cash transfer) and CadÚnico-registered citizens complying with the means-testing rules, totaling 29.7 million recipients. Citizens not included in this first batch could apply by filling a simplified, short form within a dedicated smartphone app: until the 1st of June, 29.3 million more people were assigned the aid this way. Thus, the Emergency Aid already delivered R$ 76.6 billion to 59 million citizens since its beginning on April 2nd, and can represent circa 40% of total federal monthly cash transfers, i.e. more than 13 times Bolsa Família’s monetary impact, and more than 4 times its coverage.

 

PROGRAM SPENT (BILLION R$) % TOTAL RECIPIENTS (MILLION) AVG MONTHLY VALUE R$ AVG MONTHLY VALUE €*PPP
Bolsa Família2 2.60 2.74% 14.2 189.21 72.45
BPC elderly and disabled1 5.38 5.67% 4.95 998 382.14
Unemployment benefits1, 4 3.12 3.29% 8.37 1274.65 488.07
Social Insurance1, 3 47.99 50.63% 5.19 1378.37 527.78
Emergency Aid5 35.70 37.67% 44.8 649.15 248.56
Total/w. avg 97.38 100% 77.51 787.806 301.656

Table 2. Brazilian Federal Social Policy Programs Estimated Current Monthly Spending, Including the Emergency Aid. Author’s elaboration.

Sources:
1 Portal da Transparência, based on 2019 figures.
2 Ministério da Cidadania, values based on september/2019.
3 Boletim Estatístico da Previdência Social, based on 2019 figures.4 Fundo de Amparo ao Trabalhador. Series for unemployment benefits extrapolated from 2015 data, except for closed season fisherman’s benefit.
5 CAIXA. Últimos números do Auxílio Emergencial. Series correspond to average figures in 2020, excluded Bolsa Família figures, as all its recipients were included in the Emergency Aid.
6 Average totals count Bolsa Família population under Emergency Aid, to match with the previous note’s caveat.

Notwithstanding, there is evidence of serious, though expected implementation issues. Most complaints concern registry inconsistencies, which created a queue of 5.3 million cases waiting for decision, and trouble with service organization for money withdrawal amidst the coronavirus pandemic inside Brazilian public banks. But, given the multiple agency involvement (National Social Security Agency – INSS; Ministry of Citizenship; IT public companies Dataprev and SERPRO; public banks CAIXA and Banco do Brasil; Federal Revenue Agency – RFB), massive information being processed, and the huge amount of recipients, initial results were celebrated by Brazilian system-level bureaucracy.

The First Block on a Road to UBI

As explained before, the current Brazilian government was openly against the coronavoucher project – but bureaucracy and the Brazilian Congress made it happen in such a way that the government cannot roll back it. Now, harnessing the coronavirus winds, media, politicians, and public policy pundits openly suggest turning Emergency Aid into a permanent program. Of course, government spokesmen preach against the proposal – but there are signs that state agents are already studying how a permanent aid could fit into the federal budget.

This might be a timid step – but the intricate implementation part is already up and running, against most odds. And it is relevant to remember that Brazil has, since 2004, an enacted law determining the payment of a real Universal Basic Income, but lacking regulation yet. Even against the president’s will, the path is not as confusing as before: and maybe, with future stronger Executive support, a slight push might help establish a permanent universal aid.

More information:

Basic Income and Employment in Brazil

From Street‐Level to System‐Level Bureaucracies: How Information and Communication Technology is Transforming Administrative Discretion and Constitutional Control

Responding to crisis with digital payments for social protection: Short-term measures with long-term benefits

Social Protection and Jobs Responses to COVID-19: A Real-Time Review of Country Measures

Contact

Luiz Henrique Alonso de Andrade
MPP, intern at Kela Research
luiz.alonso_de_andrade@kela.fi