The Continuing Benefit Benefit (BPC) in Brazil has shown significant growth in recent years, with an increase of 33% in the number of beneficiaries since 2022.
This significant increase has caught the attention of economists and raised concerns about possible irregularities and the impact on public accounts.
Rafaela Vitória, chief economist of Inter, points out that this acceleration of the program has been observed for a few years, generating several alerts.
BPC is an assistance program for the elderly and people with disabilities without proven income. However, recent rapid growth does not seem to be justified by significant demographic changes or increase in incapacity incidence.
Budget dilemma
Another factor that pressures social spending, including the BPC, is the increase in the minimum wage.
As the benefit is linked to the minimum wage amount, its actual growth implies automatic increase in program expenses.
Vitória suggests that a detachment between the BPC and the minimum wage must be debated to adapt the program to the government budget.
The economist warns that the government faces a dilemma: increasing taxes to cover spending growth or cut expenses in other areas.
The current scenario points to a possible budget collapse from 2027, as indicated by Minister Simone Tebet.
The situation demands an urgent review of the linking of social spending to the minimum wage and the creation of new rules that are financially sustainable in the long run.
Relationship with Social Security Reform
The economist points to a parallel between the acceleration of the BPC and the pension reform approved in 2019.
With stricter rules for retirement, the BPC has become an alternative to those who cannot meet new social security requirements. Victoria argues that it is necessary to review the BPC rules to align them with the changes in social security.
Despite the government’s attempts to implement new rules, through the approved tax package, significant effects on spending containment have yet been observed.
The BPC remains one of the fastest growing lines of expense, surpassing the limits established by the tax framework.
