Bolsa Familia: A brief description

When Lula came to power, there were already social protection policies in place and multiple cash transfer programs. Three programs were inherited from Fernando Henrique Cardoso’s (1993- 2003) administration. First was Bolsa Escola, which provided R$15 to each child attending school, up to a maximum of R$45 per family (three children). Second was Bolsa Alimentação, which provided between R$15 and R$45 per month to families at risk to assist them in covering their basic food needs. Lastly, Auxilio Gás provided a monthly stipend of R$7.50 to low-income families to assist them in purchasing cooking gas (Fenwick 2009, 113).

Table 2.1: Bolsa Familia: Beneficiaries, annual expenditure (in nominal reales) and average value per household (in reales of 2004), 2004-10

Source: Sánchez-Ancochea and Mattei 2011, 305

Lula enacted Federal Law 10.836 and officially combined these three programs (plus a fourth one started by Lula himself called Cartão Alimentação) under the Bolsa Familia on January 9th 2004. He also tremendously increased the reach and scope of the social assistance. From 6.5 million families in 2004, Bolsa Familia was subsidizing almost 13 million families by 2010. With an average family size of four, Bolsa Familia was affecting an estimated 52 million citizens, or an astounding 26.6% of the 196 million people in Brazil.¹⁸ Official annual expenditures on the program also increased from approximately US $3 billion in 2004 to US $7 billion in 2010. Accumulated total expenditures since Bolsa Familia’s inception are roughly US $34 billion (Fenwick 2009, 115; Sánchez-Ancochea and Mattei 2011, 305).

In terms of the concrete benefits that families receive, the rules have been revised multiple times. When Bolsa Familia began in 2004, there were two categories of benefits targeting households in poverty and extreme poverty. Households in extreme poverty, who qualified as those earning up to R$50 a month, received a monthly cash allowance of R$50 independently of household characteristics. They could also receive an additional R$15 per child below 15 years of age with a maximum of three children per family. Households in poverty, who qualified as those earning between R$51 and R$100, could only benefit from the conditional children-based allowance.

These benefits were revised in 2006, 2009 and in 2011. In Bolsa Familia’s latest iteration, the cut-off point to receive benefits is R$70 for extremely poor and R$140 for poor households. Furthermore, the fixed transfer for extremely poor families is R$70 while the cash transfer per child in school has increased to R$32. A third type of benefit was also introduced in 2009. Households with children between 15 and 17 were entitled to receive R$38 per child, with a maximum of two per family. This was implemented to encourage continuing secondary schooling. With these reforms, the total value of benefits transferred varies between R$32 (US $20) and R$242 (US $152) per family per month (Sánchez-Ancochea and Mattei 2011, 304).

In the face of such an enormous government program, the lingering question is how the PT managed to accomplish its goal. We will explore the process by which the state procured the financial resources and the political backing of international and national capital. We will also discuss the results of Bolsa Familia in terms of the level of efficiency with which the state managed the cash transfers, as well as the ultimate goal of poverty alleviation.

¹⁸ Geographically speaking, the Northeast region of Brazil receives the largest portion of the cash transfer (about 50 percent in 2005). Historically this has been where poverty rates are highest (Fenwick 2009, 123; Marques and Mendes 2007, 26).