Country Snapshot: The basic emergency income policy in Brazil

On July 16, Maíra Vannuchi, organizer for the Americas for StreetNet International, presented a case study of the implementation of basic emergency income policy in Brazil in a side event organized by Global Platform for the Right to the City, during the High Level Political Forum 2020.

The event was called “Fulfilling SDG11 & the NUA beyond the #COVID19 through the Right to the City” and Maíra’s presentation was included in the section about Social protection mechanisms and securing livelihoods, particularly in the informal economy.

Maíra focused on the case of Brazil, in which the National Congress approved an inclusive and universal policy aligned with the principles of basic universal income to tackle the consequences of COVID-19

Initially, the right-wing government of Bolsonaro proposed a benefit of R$ 200 (US$ 38.54), reserved for those in the national register of the most vulnerable people (CadUnico).

However, the pressure of social movements and trade unions was successful in changing the policy. The Brazilian Basic Income Network (Rede Brasileira da Renda Básica) organized a wide-raging campaign involving various segments of civil society, which influenced Congresswomen and men with elaborate proposals of what the guidelines should be and how the policy should work. This knowledge is a result of years of research and thought about what a universal basic income should be.

Movements of informal economy workers such as StreetNet’s affiliate União Nacional de Trabalhadoras e Trabalhadores Camelôs, Ambulantes e Feirantes do Brasil – UNICAB quickly mobilized to defend the rights of informal traders. Through the creation of funds to be distributed to informal traders and advocacy actions to denounce problems in the payment of basic emergency income, workers’ organizations were on the frontlines to ensure no one would be left behind.

What was the policy?

The National Congress approved a cash grant of R$ 600 (US$ 115) to informal workers and R$ 1.200 (US$ 230) to single parent households led by women or men, for a period of 3 months.

The sole criteria was to belong to a family whose monthly income per person does not exceed half a minimum wage of R$ 522.50 (US$ 100), or whose total family income is up to 3 (three) minimum wages R$ 3,135.00 (US$ 603).

The duration of the benefit has since been extended by an additional two months.

Overall, the emergency cash-grant program, primarily targeted at informal workers, is anticipated to reach 60 million people, which amounts to 50% more than what the government initially expected. For context, the Brazilian population is currently at 210 million people.

Why this is an interesting case from the point of view of a broad and inclusive social security?

  1. The program was accessible both by people who were already registered (vulnerable people who already receive government aid [CadUnico, 73 million people registered] and Individual Micro Entrepreneurs [MEI], a category that was first implemented to simplify the formalization of workers in the informal economy at several levels through an easy and affordable online registration process, which provided access to inclusion in social security, retirement and tax registration with a fixed monthly amount of R$ 59.00 (US $ 11.30); but also by informal workers that were not registered in any of these databases and remained absent from formal employment records – as long as they filled the criteria, they could register on the website or via the app.
  • Accessibility to the program: there were multiples channels through which workers could receive the benefit. Workers registered online, either through a website or through a smartphone app. After completing the form with personal information, the system checks the eligibility of the worker and sends a confirmation message following that analysis. For those workers who could not access internet or smartphones, it is possible to request their registration and a federal bank agency (Caixa) or lottery agencies. A hotline for queries was also set up to resolve doubts about how the program works. Finally, the benefit was delivered through bank transfers to an existing savings account of the worker – the ones that were already registered in CadUnico already had bank accounts, but new applicants who needed one could also create a “digital account” at Caixa automatically through the registration system.

By June 17th, 107 million people had applied for the benefit, and 64.1 million people were considered eligible to receive the emergency grant. In total R$ 81.3 billion (US$ 15.1 billion) were granted in disbursements.

Were there any problems?

Despite being an inclusive and universal policy that undoubtedly had a great impact on the lives of beneficiaries, there were several problems during its implementation.

From people who never received the benefit, either because their application remains “under analysis” or because it was denied without proper justification, to accessibility issues related to “digital illiteracy” and lack of access to digital devices, and also a concerning lack of articulation with the social assistance bodies, which have more experience and capacity to properly implement such a wide-raging program.

There are still 10 million Brazilians “in processing” and 24 million were denied the benefit – the reasons why are not transparent. Delays in receiving the benefit and the long lines of beneficiaries at Caixa are also a problem.

Why is this policy relevant for StreetNet International?

StreetNet International has been advocating for the provision of basic emergency living cash grants to informal economy workers since the beginning of the COVID-19 pandemic. This kind of simplified and direct assistance can make all the difference for informal traders who live from hand to mouth and are currently facing restrictions that prevent them from working. Instead of forcing informal traders to risk either infection or starvation, basic emergency living cash grants allow them to feed themselves and their families without exposing themselves unnecessarily to the virus, especially in the case of informal traders from vulnerable groups.

This kind of support is also a recognition of the important work performed by informal traders and their contribution to the economy. Although the Brazilian policy had several problems of implementation, its inclusion of informal economy workers is step in the right direction.

SOURCES:

Brazilian Basic Income Network (Rede Brasileira de Renda Básica): http://rendabasica.com.br/

WIEGO study:  #1 Social Protection Responses to Covid-19  Government grants and cash transfers to informal workers. July 2020.