The reactivation of the payroll loan for BPC recipients is expected for August, however, regulation is still necessary
The INSS announced this week that it intends to restart the procedure for authorizing loans for beneficiaries who receive the Continuous Benefit Payment (BPC/Loas). This is the social security scheme that provides R$1,320 per month to the elderly and people with disabilities who are unable to work.
This is nothing new. In the second half of the previous year, the Federal Government had already authorized the allocation of funds to BPC beneficiaries. However, under the term of Luiz Inácio Lula da Silva (PT), this release ceased. The current Government realized that it would not be fair to release the balance to a more vulnerable group, such as BPC beneficiaries.
However, after extensive discussions with members of the opposition, the Federal Government chose to reverse the decision. The Provisional Measure (MP) that reestablishes Bolsa Família defined that the loan can once again be accessible to BPC beneficiaries, as long as the individual in the program decides that he or she needs the amount.
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The conditions
According to official information, the Bolsa Família MP determines that the loan for BPC beneficiaries has a consignable margin of 35%. This means that the beneficiary can commit up to 35% of their monthly benefit to paying the loan.
Taking into account that the BPC provides R$1,320 per month, it can be said that those interested in the loan can commit up to R$462 per month to these payments.
Finally, the INSS decided to reduce this margin for BPC beneficiaries. For other beneficiaries of the Institute, this limit is higher. An individual who receives a monthly pension, for example, can commit up to 45% of his/her income.
There is no information on the maximum interest rate applicable to this loan. For retirees, the National Social Security Council (CNPS) has already established that the limit will be 1.97% per month.
The expectation is that the INSS will implement and release official regulations before August to define these details and determine whether there will be a ceiling on the interest rate, and what this limit would be for beneficiaries.
Banks confirm consignment
In contrast to last year, most of Brazil's largest banks have already signaled that they will offer loans to BPC beneficiaries. Banks such as Caixa Econômica Federal, Banco do Brasil, Bradesco, Itaú, Santander, C6 Bank and Banco Pan have given positive signals.
What is consigned
A payroll loan is a type of loan where payment is made through monthly deductions directly from the source of income. A retiree who requests a payroll loan, for example, receives the money and then begins to receive monthly deductions from their pension until the debt is paid off in full.
Because it is a credit with a direct discount from the source, most banks believe that there is a low risk of default, which results in lower interest rates than the market average.
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Family Allowance
Last year, former President Jair Bolsonaro (PL) authorized the loan not only for BPC beneficiaries, but also for Bolsa Família users. For this second group, the new government did not prohibit the granting.
However, large banks such as Caixa Econômica Federal have stopped offering loans to people who are part of the Bolsa Família program. Other institutions, such as Bradesco, Itaú, Santander and Banco do Brasil, did not even start offering this line last year.
