Brazil’s Lula announces welfare increases ahead of presidential election

Government says that increase represents an adjustment for inflation that has eaten away purchasing power since 2023.

Brazilian President Luiz Inacio Lula da Silva’s government has announced a 15 percent increase in welfare benefits ahead of a closely watched presidential election in October.

The leftist president was joined by government ministers in the capital Brasilia on Thursday, where they announced that the “Bolsa Familia” poverty alleviation programme would increase minimum monthly benefits from 600 reais ($116) to 691 reais ($134) next month.

“This is a programme that has changed the lives of millions of Brazilians,” Lula said in a social media post, stating that the adjustment was meant to counter the impacts of inflation which has risen since 2023.

“It’s income to put food on the table. It’s money circulating in the economy. It’s more dignity for Brazilian families,” he added.

Lula is currently facing a challenge from the political right by presidential candidate Flavio Bolsonaro, the son of former far-right president Jair Bolsonaro. Polls have shown them virtually tied ahead of the first round of voting on October 4.

The leftist president has faced challenges from rising debt servicing costs. Finance Minister Dario Durigan said the current budget would cover the benefit increase without creating additional expenses.

Planning Minister Bruno Moretti added that higher cash benefits would allow people to maintain their purchasing power amid rising costs.

“Inflation since the [March] relaunch of the programme through August stands at 15.04 percent,” Moretti said.

Benefit adjustments are allowed in Brazil, and conservative governments in the past have also overseen increases in the months leading up to elections. Before the 2022 presidential election Jair Bolsonaro boosted cash payments, totalling about 273 billion reais ($52bn) in 2022 and 2023, according to an analysis by the Reuters news agency.

The new financial aid increase is expected to cost the government 5.8 billion reais ($1.13bn) in 2026 and 22 billion reais ($4.27bn) in 2027.

The Bolsa Familia programme has been a central legacy of Lula and his Workers’ Party, part of Lula’s vision of pairing political democracy with social and economic policies that seek to address poverty and inequality.

Households with a monthly income of 218 reais ($42) qualify for the programme, which offers assistance to millions of poor families across the country.

In an interview published in the Brazilian newspaper Extra, Durigan also stated that the government was considering a debt relief proposal meant to decrease strain on borrowers.

“It is about making it possible for people who today have more jobs, more income and greater access to quality services to start over,” he was quoted as saying.