The Bolsa Familia Program (BFP)

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1 The Bolsa Familia Program (BFP) Ministry of Social Development Rio de Janeiro, 13th of June, 2012

2 BRAZIL Population: 192 million Area: 8.5 million km² 26 states, the Federal District and 5,565 municipalities GDP (2011): US$ 2,194 billion GDP per capita (2011): US$ 11,239 HDI (2010): Gini coefficient (2009) : 0.543

3 Historical context LA countries: social protection based on social insurance (contributory); as a consequence, a large part of the work force remained socially unprotected. Brazil, 1970 s: emergence of the first semi and non-contributory schemes of social protection addressed to small farmers, disabled and older people. The Brazilian Federal Constitution of 1988 Universal right to health: free core public health system, complemented by a private health sector; Public pension system: special scheme for small farmers was expanded, as well as the social assistance scheme to disabled and older people; Decentralization with a focus on local governments; Reinforcement of social control, accountability and transparency.

4 Historical context The emergence of CCT programs 1995: First conditional cash transfer programs in Brazil at local level 2001: Bolsa Escola first CCT program at the national level 2001: Bolsa Alimentação national health and nutrition CCT program 2002: Auxílio Gás national cooking gas subsidy (targeted) 2003: Cartão Alimentação food card program

5 Historical context Before the Bolsa Familia Program: Several different agencies responsible for CCT programs, working with isolated data systems multiple eligibility criteria different benefit levels Those programs had low coverage of the target population were occasionally overlapped

6 Basic Designing Parameters The Bolsa Familia Program was created in October 2003 with the following objectives: increasing the efficiency and the coherence of previous CCT programs reducing poverty and inequality by providing a minimum level of income to poor families reinforcing the basic social rights of education and health by using them as conditions to receive transfers improving the prospects of beneficiaries in the labor market

7 The Bolsa Familia Program Main characteristics Created by federal law: better prospects of stability and continuity Focus on the family Commitment to breaking the intergenerational poverty cycle Specific roles for the Federal, State and local governments Families automatically qualify based on information from the Single Registry for Social Programs Benefits paid directly to beneficiary families using bank cards Benefits paid preferentially to women Free use of transfers Social participation and control

8 The Complexities Rapid growth: the program tripled the number of beneficiary families between 2004 and 2006, when it reached 11 million families. It reached million families in December Merger: the BFP has unified four pre-existing CCTs into a single program, consolidating inherited systems, registers and rules developed by four different agencies Federal context: although it is managed at the federal level, many aspects of the BFP implementation are carried out by Brazil s 5,565 municipalities. The BFP has developed innovative mechanisms to promote incentives for good implementation Source of integration: promoting the BFP as a unifying force for social policy in Brazil, both vertically (unifying transfer programs across different levels of government) and horizontally (linking the BFP with complementary actions and services at all areas of government).

9 The unification process

10 Coverage November 2003: 1.2 million families May 2012: 13.5 million families

11 Targeting Target population: families under the poverty line Eligibility criteria: per capita income of R$ 70 (all families) and between R$ 70 and R$ 140* (families with children and adolescents aged 18 or younger) The targeting mechanism uses only declared income (not real or proxy means test) defines limits to the number of beneficiaries at the local level publicizes the names of beneficiaries * Roughly, between US$ 35 and US$ 70.

12 Single Registry for Social Programs The Single Registry is the instrument to identify low-income families in Brazil The target population of the Single Registry is larger than that of the BFP: families with per capita income of up to half a minimum wage (around US$ 155*) should be included Used not only by the BFP, but also by many other social programs (social housing; electricity subsidy; Bolsa Verde (green allowance) etc). * New minimum wage of R$ 622 (US$ 310).

13 The BFP Three Dimensions Benefits: immediate poverty alleviation Conditionalities: access to health and education services, breaking the intergenerational poverty cycle Complementary programs: improvement of labor market prospects

14 Financial Benefits Eradication of Extreme Poverty Benefit new (variable, bridges the extreme poverty gap) Beneficiary families with children 0-6 years of age whose monthly per capita income (post benefits) does not reach R$ 70 (top up benefit - variable amount per family, enough to bridge the extreme poverty gap)

15 Conditionalities Education Minimum school attendance of 85% for children from 6 to 15 Minimum school attendance of 75% for adolescents aged 16 and 17 Health Nutrition monitoring for pregnant and nursing women, as well as for children aged 7 or younger Prenatal and postnatal monitoring Immunization for children aged 7 or younger

16 Complementary programs and actions Integration with other programs and actions that expand the social rights of families, such as civil registry, literacy programs, improvement of housing conditions, etc. Actions directed to income generation, professional training and insertion in the labor market, contributing to improve prospects in the labor market.

17 Implementation Model The Bolsa Família Program is implemented through a decentralized model, with responsibilities shared by the Federal Government, States, the Federal District and municipalities; States, the Federal District and municipalities define a local manager and receive resources from the Federal Government to support actions related to the Single Registry and the Bolsa Familia Program.

18 Decentralization and responsibilities Federal government: the Ministry of Social Development regulates the BFP and shares the operational costs with state and local governments. The Ministries of Health and Education are responsible for monitoring conditionalities at the federal level. A federal bank is responsible for operating the extensive BFP data set and the payment system State governments: provide technical support and training to municipalities; provide public services; issue the necessary documentation for potential beneficiaries Local governments: identify and register poor families in the Single Registry; provide public services; check if families have access to health, education and social assistance services

19 Index of Decentralized Management (IGD) Resources to support the local level of PBF implementation Indicators considered Quality of information in the Single Registry Update of the database Information on conditionalities in the education area Information on conditionalities in the health area Use of financial resources Management of conditionalities Monitoring of beneficiary families (mainly of the most vulnerable ones) Registering new families, data updating and review Implementation of complementary programs

20 Coverage in May ,565 municipalities million families US$ 800 million/month Average benefit: US$ 60

21 Coverage and financial resources The financial resources represented 0,46% of the annual GDP in 2011 Operational costs represented 4,18% of the total financial resources

22 Outcomes The Program has contributed to reduce extreme poverty and income inequality improved school attendance among beneficiaries improved child vaccination among beneficiaries boosted local economies

23 Evolution of the Gini Index ,66 0,64 0,62 0,6 0,596 0,601 0,596 0,58 0,56 0,54 0,548 0,52 0,5 Source: Ipea, based on National Household Sample Survey Pnad/IBGE microdata.

24 Evolution Evolução of temporal extreme da extrema poverty: pobreza: Brazil, Brasil, a 2008 to Porcentagem de extremamente pobres (%) ,1 22,6 22,9 17,8 17,3 17,7 1 o Objetivo do Milênio 16,8 17,4 17,4 16,5 17,5 15,1 13,3 1,7 p.p./ano 10,8 10,3 8, Ano Source: Barros, 2009, estimates based on PNAD

25 Outcomes Reduction of income inequality 16% of income inequality reduction between 1999 and 2009 was due to BFP (Soares et alli, 2010, based on data from the National Household Survey). Reduction of extreme poverty The BFP explains 18% of the reduction in the poverty gap and a quarter of the reduction in the square poverty gap from 5,9% to 4,6% (Soares and Satyro, 2009, based on data from the National Household Survey). Administrative records suggest that, in 2009, 4.3 million out of 12.4 million beneficiary families have crossed the extreme poverty line by receiving the financial benefits (Senarc, 2010). Impact of the financial benefits on the per capita monthly income * Average income increase: 48.7% (from US$ to US$ 42.60), which allows families to cross the extreme poverty line; 60% increase in the monthly per capita income in the North and Northeastern regions (administrative records from Senarc, 2010) * New benefit not taken into account.

26 Impacts on health Outcomes increase in timely vaccination (from 15 to 25 percentage points higher among beneficiaries, depending on the vaccine). beneficiary pregnant women attend 1.5 more pre-natal appointments compared to non beneficiary with the same social and economic profile. probability of being born at term is 14.1 percentage points higher for babies in families that receive the benefit. (Impact Assessment Bolsa Familia Program, 2 round, 2010) Impacts on education increase of 4.4 percentage points on school attendance for 6-17 year-old children. increase of 6 percentage points on school promotion for 6-17 yearold children. (Impact Assessment Bolsa Familia Program, 2 round, 2010) Bolsa Familia students show smaller drop-out rates than public schools students (administrative records from the Ministry of Education)

27 Bolsa Família and Plan Brazil without Extreme Poverty The BFP has been expanded to include more than 800 thousand extremely poor families. The limit of family members receiving the variable benefit has been expanded from three to five children; A new top-up benefit Eradication of Extreme Poverty has just been created for families with children aged from 0 to 6, to bridge the extreme poverty gap; An active searching strategy was implemented, to find and include in the Single Registry families living in poverty, with no social protection.

28 SENARC Secretaria Nacional de Renda de Cidadania National Secretariat of Citizenship Income Phone: Fax: