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Story Publication logo December 26, 2012

Brazil: Cash Transfer Does not Discourage Formal Employment Anymore


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Two transitioning economies, similar development challenges, vastly different population size and...

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Henrique Luis Paiva, secretary of the National Secretariat of Citizenship Income (SENARC) which runs Bolsa Familia. Image By Rema Nagarajan. Brazil, 2012.

Bolsa Familia has become a success story--how does the government identify families entitled to this programme?

Well, data regarding vulnerable families are collected by municipality officials and maintained in a centralised single registry managed by a federal bank which administers payments for most social programmes in Brazil. The BF eligibility criteria have been translated into a particular software. The final decision of which families from the single registry get included is taken through the application of this software on the data--and not by some individuals.

The BF programme covers one-fourth of the population, comprising almost 14 million poor families.

How does a family get cut out of BF--and what are the consequences?

If a family does not comply with the conditions of schooling, immunisation and care of young mothers, they are given several warnings and cash transfer suspensions before the benefits are finally stopped.

In some cases, the families start earning more, so they become ineligible. Even if a family is excluded from BF, benefits from social programmes like subsidised electricity and land-line connections for vulnerable families continue. The excluded family will only lose benefits meant exclusively for BF beneficiaries.

There's some worry about benefits discouraging people from getting regular jobs--how do you address that?

During an impact assessment, we did find BF families had a tendency to avoid formal jobs. This could be because many don't know they have the right to be in the programme for two more years after getting a job. It's after this that they're cut off. However, we've made a rule that if you voluntarily give up your BF benefit when you get a job, you can be back on BF and immediately start receiving benefits again whenever you feel you need to. This is to allay fears of losing a job and BF benefits.

Is there a limit to assistance people can get under BF?

There used to be a limit of 306 reais per month per family as BF cash transfer--not anymore. President Dilma Rousseff launched the programme 'Brasil Carinhoso' or 'Caring Brazil' for families with children up to six years of age, recently enhanced to include families with children up to 15 years of age.

If the monthly per capita income of members in these families is less than 70 reais, through BF, 20 more reais are paid per member. Hence, the amount a family gets depends on the number of family members and their income. There was a lot of criticism and we struggled to make it work. Our tendency was to establish a limit. But the president said no--the poorer the family, the larger the family, the more they need the benefit and so, there will be no maximum limit. Her target is to eradicate extreme poverty. However, in entire Brazil, we've found just 25 families receiving more than 1,000 reais per month with this scheme.


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Health Inequities

Health Inequities

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