Brazil pays R$6.5 billion in subsidies to low-income wage earners

The Brazilian government is well known for its subsidy program that makes direct payments to the very poor – the “Bolsa Familia.” But Brazil has another program that makes a one-time annual payment (“abono salarial”) to low-income wage earners of up to a minimum wage (mw) (presently at R$510 per month). The PIS/Pasep programs have a total of over 30 million workers enrolled who are eligible to receive the payment benefits.

The Pasep is for workers in the government sector who total around 2.7 million. The rest are in the PIS (“Pragrama de Integração Social”).

To be eligible a worker has to have been enrolled in the programs before 2005 and worked at least 30 days “on the books,” (“com carteira assinada”). Their salary cannot exceed two mws (R$1,200) per month. Some workers who were enrolled in the PIS before October 1998 and earned over 2 mws can still receive payment benefits (but they are less than a mw).

PIS/Pasep payments are made by the Federal Savings and Loan Bank (“Caixa Econômica Federal”) and the Banco do Brasil. For the period 2010/2011, PIS payments began in August. So far the Caixa has shelled out R$6.5 billion. The payments end in June of next year.