1. MPS – Ministry of Social Security SPS – Secretary of Social Security Policies SOCIAL PROTECTION: CHILDREN, WORKING POOR AND UNEMPLOYED Delivered by Carlos Eduardo Gabas (Vice-Minister for Social Security, Brazil) GENEVA, AUGUST 2009

2. LIMITS TO COVERAGE BY CONTRIBUTIVE SYSTEMS Strong Importance of Contributive Social Security, regarding: – Financing; –Entitlements; –Solidarity between and within Generations; –Reduction of Vulnerabilities and Poverty. However, standard wage relationship has not universalized and hence contributive systems need to be supplemented, in order to achieve larger coverage.

3. COVERAGE & FINANCING Mix of contributive and non-contributive elements required: –Basic universal tax-financed benefits, or –Subsidization of those which have low income. Since poverty relief is a public good (the whole society benefits from it), tax-financing is a correct approach for poverty fighting benefits. Taxation sources (earmarking if possible): –General revenue; - Tax on financial transactions; –Tax on oil/energy consumption;- Tax on mineral production/rents; –Solidarity Tax on the rich;- Pension reform imposing ceiling on the privileged.

4. THE BRAZILIAN EXPERIENCE: COVERAGE EXPANSION IN SOCIAL SECURITY FOR THE WORKING AND ELDERLY POOR

5. SOCIAL SECURITY COVERAGE OF THE WORKING POOR  Simplified Plan for the self-employed and small entrepeneurs with low income;  Tax relief to stimulate the formalization of domestic workers;  Different rules for the contribution (on production) and the benefits (flat-rate 1 minimum wage) of rural workers.

6. Source: PNAD/IBGE – Several years. Elaboration: SPS/MPS. Coverage Evolution among Workers Aged 16 to 59 – 2003 to 2007 – % of all workers (Rural area of Northern Region excluded, except for Tocantins) Ministério da Previdência Social

7. SOCIAL PROTECTION FOR THE ELDERLY POOR SOCIAL ASSISTANCE BENEFITS  Social Assistance Pension (BPC/LOAS):  Payment of a minimum wage/month for:  persons aged 65+ or with disability for an independent life, and  with per capita family income of less than ¼ of the minimum wage.  Foreseen in the Constitution of 1988 and Introduced in 1996.

8. SOCIAL PROTECTION ELDERLY POOR SOCIAL ASSISTANCE Source: CGEP/DRGPS/SPS/MPS

9. SOCIAL PROTECTION ELDERLY POOR SOCIAL ASSISTANCE Source: CGEP/DRGPS/SPS/MPS –including RMV.

10. Benefit Emission Social Insurance and Social Assistance Brazil dec 2000-2008 and July/2009 Source: CGEP / DRGPS / SPS / MPS.

11. With and without Social Security Transfers – 2007 (Rural Area of Northern Region Included) Poverty rates* in Brazil With Social Security Transfers Without Social Security Transfers Source: PNAD/IBGE – 2007. Elaboration: SPSMPS. * Poverty Line = ½ minimum wage per person. Obs: Considering only households where all inhabitants have valid declarations for the whole of their income souces. +22,2 million persons below poverty line +22,2 million persons below poverty line 10 Ministério da Previdência Social

12. Effects of Social Security/Social Protection on Poverty in Brazil 2007 Source: CGEP / DRGPS / SPS / MPS 184.628.821 100,0% Poor With Transfers of Social Security (a) 56.872.657 30,8% Poor Without Transfers of Social Security (b) 79.100.46542,8% 22.227.80812,0% As % of Total Population Per Capita Family Income < ½ minimum wage Effects of Social Security / Social Protection on Poverty in Brazil 2007 (b) - (a) Description Transfers of Social Security in Brazil - 22.2 million people out of poverty

13. SOCIAL PROTECTION FOR THE UNEMPLOYED

14. UNEMPLOYMENT INSURANCE  formal employee fired without just cause are entitled to unemployment benefits during 3 to 5 months, regarded he/she has worked at least 6 months in the last 36 months;  possibility of extension for 2 additional months, in moments of crisis (sectors most hit by crisis);  there is unemployment protection for other groups of workers such as domestic, artisanal fishermen, freed from slave labor and scholarship qualification for workers on lay-off, but with different rules;  Resources unemployment insurance for formal workers 2008: 0,5% GDP.

15. SOCIAL PROTECTION FOR CHILDREN (BESIDES CONTRIBUTION- RELATED FAMILY AND MATERNITY BENEFITS FOR FORMAL WORKERS)

16. Program “Bolsa Família”  The “Bolsa Família” is a program of direct income transfer with conditionalities (education, health and others), which benefits poor families (with monthly income per person of less than R$ 140 - approximately US$ 2 a day ) ;  promotes immediate relief of poverty through the direct transfer of income to the family;  strengthens the exercise of basic social rights in the areas of health and education, through the fulfillment of conditionalities, which contributes to that families can break the cycle of intergenerational poverty;  supplementary programs that are aimed at the development of families, so that the beneficiaries of Bolsa Familia become able to overcome the situation of vulnerability and poverty like programs to generate jobs and income, adult literacy, provision of civil registration and others.

17. Program “Bolsa Família”  Benefit per family: from R$ 22 to R$ 200, depending on the level of poverty and the number of children;  Three types of benefits: the Basic, the Variable and Variable Linked to Youth Person:  basic benefit - R$ 68 to families considered extremely poor (monthly income of up to R$ 70 per person – about US$ 1 per day);  variable benefit - R$ 22 for each child up to 15 years, max. of 3;  variable benefit linked to youth - R$ 33 for each youth aged 16/17, limited to 2.

18. Program “Bolsa Família”  Coverage: 11,6 millions of families in 2008;  Main results:  reduction of poverty and inequality;  breaks the intergenerational poverty cycle;  Resources (2008): 0.4% of GDP;  Administered by Federal Government in partnership with Municipalities.