Passing provisional decree gives indication of upcoming pension reform battle

On January 18, 2019, President Jair Bolsonaro’s economic team issued MP 871/19—a provisional decree which cracked down on fraud in the social security system. The bill will serve as a good thermometer of exactly how much political capital the government has in Congress, in the lead up to the heated debates on the pension reform bill.

MP 871/19 aims to scrutinize the benefits given out by the pension system—trying to contain the massive drain caused by frauds and irregularities on several fronts. Besides more oversight, the bill establishes stricter eligibility rules for the benefits in the first place. That is the case, for example, of pensions paid to the families of prison inmates. According to the decree, only the families of prisoners in closed regimes will receive the benefit—no longer including those in so-called “semi-open” prison regimes.

The bill also conditions benefits for rural producers to their enrolment on the small rural producers register, and also enhances a revision of sick pay and disability pensions—a process which began during the Michel Temer administration.