Reformulation of income transfers in Brazil: simulations and challenges

The debate around the reformulation of the Brazilian federal government’s cash transfers precedes the COVID-19 pandemic (see, for example, Portella et al. 2016; Soares, Bartholo and Osorio 2019), but it has grown significantly in the wake of the health crisis and the creation of the Emergency Grant (Auxílio Emergencial) by Law No. 13.982/2020. To contribute to this discussion, the goal of this Working Paper is to present simulations for the future of noncontributory transfers in Brazil, discussing the dilemmas of various designs, and estimating costs and possible impacts on poverty and inequality. We also analyse a series of operational and budget-related challenges to implementation.