The continuous cash benefit on the supreme court

Abstract

This paper analyses decisions of the Brazilian Supreme Court regarding the Beneficio de Prestacao Continuada (BPC, Continuous Cash Benefit), a regular income transfer to the elderly and persons with disability not capable of working or living an independent life whose family per capita income is lower than a quarter of the minimum wage. The litigation of social policies before the Brazilian Supreme Court is a growing phenomena and the case of BPC is paradigmatic. The paper examines the budgetary arguments prevailing in recent Supreme Court decisions, and challenges the appropriateness of the income eligibility threshold set by the Lei Organica da Assistencia Social (Social Assistance Act). In addition, the paper evaluates the fiscal impact of raising the threshold to half minimum wage. The main conclusion of the study is that an increase in the threshold would be followed by an increase in the number of beneficiaries but, due to the existing targeting errors, the raise in costs would be lower than the growth of the eligible population.