Economy

Brazilian senators approve Social Security reform

The Senate also approved an amendment that changes the regulation of the wage benefit called abono, reducing the reforms' savings in BRL 80 billion

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  • The text was approved this Tuesday on the first round of voting in the Senate, with 56 senators voting in favor and 19 against it;
  • There are still 6 amendments to go through to a vote.

The base text of the Brazilian Pension and Social Security reform was approved this Tuesday on the first round of voting in the Senate, with 56 senators voting in favor and 19 against it. 

The Senate also approved an amendment that changes the regulation of the wage benefit “abono”–a salary allowance that is paid by the government to workers who have a formal contract and who receive up to two minimum wages per month. In other words, it’s a bonus for the poorest population who have access to formal work.

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The approval of this amendment has reduced the estimated savings of the reform in at least BRL 70 billion. The Ministry of Economy estimates that the saving’s loss is about BRL 76 billion. 

Hence, according to Itaú Unibanco calculations, the fiscal impact of the proposal dropped to BRL 735 billion for the next ten years. There are still 6 amendments to go through to a vote, which is expected to take place this Wednesday.