Federal government may extend emergency aid, but slashing benefit to BRL 200

emergency aid Paulo Guedes: "Life is good."
Paulo Guedes: “Life is good.” Photo: Anderson Riedel/PR

Economy Minister Paulo Guedes is reportedly considering extending the emergency aid paid out to informal workers by another two months, but reducing the installments to BRL 200 — one-third of the current BRL 600 payment. “What does society prefer, one month [receiving] BRL 600, or three with BRL 200? That’s the kind of calculation we are doing. We may extend it. But do we have money to extend it at BRL 600 [per month]? I don’t think so,” said Mr. Guedes in a meeting with business owners, as reported by newspaper Folha de S. Paulo

Initially, the economic team had proposed to pay BRL 200 per month to informal workers that had their incomes by the pandemic, but Congress increased it to BRL 600, including a double payment for single mothers. While there is a consensus in the ministry that the aid must not be made permanent, the economic team had been debating on whether the aid should be gradually removed or immediately stopped. 

Slashing the benefit could bear terrible political consequences for the government, however. As we have explained in today’s Daily Briefing, the aid program has been pivotal for Mr. Bolsonaro’s approval ratings.

“Life is good”

According to the report, the minister had also expressed concerns about the aid discouraging workers from returning to employment, hampering the economic recovery post-pandemic.  

“If we say there will be another three months, then another three, and another three, no one is going to work. No one will leave home and isolation will last eight years because life will be good, everything will be peaceful. And then we are going to starve. That’s my biggest fear, empty shelves.”

However, as we reported on this Live Blog, several system issues delayed the payment of the aid for 8.3 million people, to the point that they had not been approved to receive the first installment until May 19, when Caixa Econômica Federal bank was already making the second payment.

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