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Brazil aid: payroll loan is regulated by the government
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The government regulated the payroll loan process associated with Auxílio Brasil. President Jair Bolsonaro and the Minister of Citizenship, Ronaldo Bento, signed a decree published in this Friday's (12) edition of the Official Gazette of the Union (DOU). However, the start of release depends on the yet-to-be-published Supplementary Rules of Procedure of the Ministry of Citizenship.
Those who receive the Aid, in addition to other government benefits, can take out a payroll loan (with direct discount at source). The government enacted a law allowing up to 40% of the benefit value to be deducted for the payment of loans and financing.
According to the decree, the Citizenship Secretariat can reduce the maximum allocable coverage limit – currently set at 40 – in a separate law.
The beneficiary can also obtain more than one discount relating to a loan or financing, as long as it does not exceed the limit established by law, respecting the obligation of this percentage at the time of signing the contract.
And if the value of the supplies, alone or in conjunction with previous supplies, exceeds the legal maximum, the installments from older contracts are deducted as a priority.
According to the Minister of Citizenship, Ronaldo Bento, the operation for aid beneficiaries should begin at the beginning of September.
What is the Auxilio Brasil benefit?
Program that replaced Bolsa Família. It is aimed at families in extreme poverty with a monthly family income of up to R$ 105. Families in poverty with a monthly per capita family income between R$ 105.01 and R$ 210 can also receive it as long as they are pregnant or under 21 years old and people in situations of poverty.
What is the value of the aid?
Between August and December 2022 the minimum benefit is R$ 600 per family. Originally, however, they are R$ 400 – the increase of R$ 200 was authorized by Amendment 123, the so-called PEC Kamikaze, which created a state of emergency to increase government spending outside the spending ceiling and circumvented the electoral law, which prohibits an increase in welfare payments in an election year.
What is payday loan assistance?
It is a loan in which the monthly installment is deducted directly from the payroll. Until then, the benefit was only valid for INSS pensioners and retirees, workers with a formal contract and also public servants. But a provisional government measure authorized this type of loan also for beneficiaries of social programs, such as Brazil aid.
What is the advantage of consignment?
As installments are debited directly from the bank slip, banks are guaranteed punctual payment of installments. As a result, it may have lower interest rates and is generally a cheaper type of loan compared to other types on the market.
What are the minimum and maximum values?
Each financial institution defines a minimum amount to be contracted – on average, the minimum amount of the approved loan is R$ 500.
The maximum value is defined by law. For Aid beneficiaries, the maximum amount of the loan granted is one in which the installments are a maximum of 40% of the monthly value of the benefit. However, the benefit value is considered to be R$ 400 – as the increase to R$ 600 is only temporary. Therefore, the maximum loan amount is one in which the installment amount is a maximum of R$ 160.
What would be the interest rate?
The law that allows the granting of payroll loans to Auxílio Brasil beneficiaries does not limit the interest rate that financial institutions can charge, that is, each bank determines how much it charges. For retirees and retirees, the interest rate ceiling on salary loans is 2.14 per month. For operations carried out with a credit card, the maximum rate allowed is 3.06 per month.
How will payment be made?
The Ministry of Citizenship directly deducts the loan installments. Thus, the beneficiary only receives the remaining amount.
Will banks provide loans to those who receive the aid?
To offer a loan to Auxílio Brasil beneficiaries, financial institutions, including banks, must all be accredited by the government. With the approval of the law, several pre-registrations were anticipated and made for those who will receive the benefit.
However, banks such as Itaú and Bradesco have already announced that they have decided not to operate this line of credit for payroll loans for beneficiaries of social programs.
According to the decree published this Friday, it will be up to the Ministry of Citizenship to establish the requirements for the qualification of financial institutions and the hypotheses for canceling or suspending the qualification.
When will banks start offering loans?
The granting of the salary loan to Auxílio Brasil is scheduled to begin in August. With the sanction of the law, the offer is now permitted. However, large banks are still waiting for conditions such as interest rates and other operational aspects to be regulated before they can offer loans to program beneficiaries.
Does the consignment pay off?
Taking out a payroll loan linked to Auxílio Brasil may be worth it for those with urgent needs — but not for paying everyday bills or making unnecessary purchases. This is because loans can have high interest rates and affect beneficiaries' disposable income for a long period of time. As a result, you may not have money to pay for essential expenses, like groceries, for several months.
If the consignee is unable to pay, can he renegotiate?
As the loan installment is deducted directly from the benefit value, the option to renegotiate does not exist. This occurs because the beneficiary already receives the Auxílio Brasil amount at a reduced rate.
This makes it difficult for the beneficiary to renegotiate the debt. It will be possible to transfer this loan to another bank that offers more favorable conditions.
About the author / Tiago Menger
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