Brazil's beefed up 'Bolsa Familia' welfare program to be less than 300 reais a month - sources

© Reuters. FILE PHOTO: A woman receives a box with food donations organized by NGO Kapadocia Institute for poor families from Capadocia Slum at Brasilandia district amid the coronavirus disease (COVID-19) outbreak, in Sao Paulo, Brazil, May 1, 2020.REUTERS/Amanda Pe

By Rodrigo Viga Gaier

RIO DE JANEIRO (Reuters) - Brazil's new "Bolsa Familia" welfare payments to the poor will average below 300 reais ($59.50) a month, sources familiar with the discussions said on Monday, less than the figure President Jair Bolsonaro had indicated last week.

The revamped nationwide program is expected to come into effect in December this year or early next year, and average payments are certain to be increased from the current 190 reais a month.

But with the Economy Ministry keen to keep control of the public finances and make sure its spending cap rule is not broken, the stipends are likely to be less than the 300 reais a month Bolsonaro flagged recently.

"The challenge is to find the resources without piercing the (spending) ceiling," one source told Reuters on condition of anonymity. "Every real here or there makes a huge difference in the final bill."

Bolsonaro, whose popularity has plummeted during the coronavirus crisis and is preparing for re-election in October 2022, has said the program will be expanded. Economy Ministry officials had previously indicated that stipends could be raised to 250 reais a month.

A second source said payments could be between 250 and 284 reais a month, and that the number of eligible people could increase to around 17 million from 14.6 million currently.

The beefed up Bolsa Familia will replace the current emergency aid program implemented to counter the effects of the pandemic and which expires later this year.

The Economy Ministry did not comment, while the Ministry of Citizenship said in a statement the new figures were still being discussed.

Economists at Barclays (LON:BARC) calculate that current inflation of 8% gives the government more leeway to increase public spending next year without breaching the spending cap, perhaps as much as 124 billion reais ($25 billion) extra.

($1 = 5.04 reais)