On October 19, between the first round of Brazil's presidential election and a possible runoff, the floor payment of the Bolsa Familia cash transfer program will jump from 600 to 691 reais in the accounts of the families it serves. The money behind that 15.04% rise was the subject of Planning and Budget Minister Bruno Moretti's interview with g1, published on Monday (21): the government found 19.6 billion reais in fiscal room in this year's budget, and part of that slack will pay for the raise announced by President Luiz Inacio Lula da Silva on Thursday (17).
Where the room comes from
According to the minister, the slack came from downward revisions in projected mandatory spending. Social security benefits paid by the INSS, Brazil's national social security institute, alone had their projection cut by 11.5 billion reais, with further projected drops in the BPC benefit for poor elderly and disabled people, in payroll costs and in subsidies, adding up to the 19.6 billion reais. The full breakdown will be published in the government's bimonthly revenue and spending assessment report by Thursday (24).
"We really did adopt a measure for which we had fiscal room, therefore without any kind of loophole, with absolute respect for fiscal conventions and rules," Moretti told g1. The raise will cost 5.8 billion reais in 2026 and 22.7 billion reais next year, an annual bill that, according to InfoMoney, repeats in 2028. The correction was not included in the 2027 budget bill sent to Congress on August 31; Moretti said the government will send an amending message with the forecast, without changing its fiscal commitments. For 2027 the government set a surplus target of 18.6 billion reais, its first positive target after four years in the red. Asked about effects on the fiscal rules, the minister summed it up: "Zero. No effect on fiscal rules."
A raise in election year
It is the first increase since the program was relaunched under the Lula government in March 2023. The 15.04% matches the accumulated variation of the INPC, Brazil's official consumer price index for low-income families, from then until August, according to InfoMoney. Moretti rejected the idea that the move was aimed at the election.
"If this were an electioneering, populist measure, what would have happened is that it would have been taken on the fly; in fact, we only authorized it, we only gave the budget sign-off, from the moment we verified that the fiscal room existed," the minister told g1.
The raise was challenged in court by presidential candidate Renan Santos of the Missao party. On Friday (18), Supreme Federal Court Justice Gilcar Mendes ruled that the decree does not violate electoral rules, finding that the increase merely updates the amounts under monetary correction criteria. According to g1, economists warned of possible impacts on public accounts after the announcement. In an interview with Folha de S.Paulo reported by InfoMoney, Moretti said the decision only moved forward once the room was confirmed: "We held it back until we had the information that there was fiscal room." The final decision came on Wednesday (16), one day before the announcement, which was made 17 days before the first round.
On Thursday (24), the bimonthly report will show, line by line, how the government reached the 19.6 billion reais. Before that, on October 19, Bolsa Familia accounts will already carry the new 691-real floor, in the interval between the election's two rounds.