Bolsa Família: Is a New Payroll Loan Now Available for Eligible Recipients?

Former president Jair Bolsonaro authorized the Auxílio Brasil payroll loan at the end of last year. Repayment of the loan is in sight. This week, the federal government will resume Bolsa Família payments, and with this action, many questions about the social program arise. One of the most relevant uncertainties concerns the payroll loan. Will the Ministry of Social Development make this type of loan available?

A payroll loan works as credit that is deducted directly at the source. The sequence is as follows:

• the individual requests the amount;
• the financial institution evaluates the request;
• if approved, the amount becomes available;
• then, the applicant is responsible for settling the debt through recurring deductions from the benefit they receive.

Many beneficiaries of the National Institute of Social Security (INSS) opt for payroll loans, as do public servants. In such cases, the debt amount is automatically deducted from these individuals' salaries or pensions.

Over the past year, the government began offering payroll-deducted loans to those receiving Auxílio Brasil and the INSS Continuous Cash Benefit (BPC). After applying for the loan, the user had to bear the monthly deductions.

Will the loan return?

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Since then, the name Auxílio Brasil has changed, and now, under the government of Luiz Inácio Lula da Silva (PT), it has gone back to being Bolsa Família. Lula and his team have always opposed the idea of offering payroll-deducted loans to social program beneficiaries.

However, the payroll-deducted loan option for these citizens still exists. The government imposed new guidelines, but the credit remains available.

The changes that took place:

• The payroll-deductible margin (maximum percentage deducted monthly) was reduced from 40% to just 5%;
• The interest rate cap that institutions may charge fell from 3.5% per month to 2.5% per month;
• The maximum number of installments for the loan decreased from 24 to just six.

Those receiving Bolsa Família still have the right to apply for a payroll-deducted loan, but must comply with the recent rules.

For those who requested the payroll loan in the previous year, the conditions remain in effect. Contrary to certain rumors, the debts incurred were not canceled, and the initial agreements remain in place.

And what about Caixa Econômica Federal?

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Although the Auxílio Brasil/Bolsa Família payroll loan remains in effect, it is likely to be difficult to find banks willing to offer this line of credit. In the past, renowned institutions such as Banco do Brasil, Bradesco, Itaú and Santander refused to adopt this modality.

Caixa Econômica Federal was the only one among the major banks to offer the Auxílio Brasil payroll loan. However, that has changed. Rita Serrano, the bank’s current president, announced the suspension of this service for Bolsa Família beneficiaries.

“We chose to suspend the Auxílio Brasil payroll loan for two reasons: first, the Ministry of Social Development will reassess the registry. It would not be prudent to maintain it, since we are not sure who will remain on this registry. The second reason is that interest rates for this modality are high,” she explained in a conversation with reporters.