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Cash Transfer Programmes in Latin America and the Caribbean

Latin America and the Caribbean was the starting point for the recent wave of Cash Transfer Programmes in the world. In relation to the rest of the developing world, the region has the most stable and long running initiatives such as in the case of Mexico, Brazil, Chile and Colombia. Below, the most significant experiences are displayed for each country.

Relevant Documents

Soares, F., Las evaluaciones de resultado de los programas de transferencia monetarias en Brasil

Social Security Administration USA (SSA) and the International Social Security Association (ISSA), 2007, Social Security Programs Throughout the World: The Americas, 2007, Washington-DC

Argentina

With the economic crisis of 2001, political and social instability were widespread and unemployment rose sharply. However, the country currently has several safety nets. These programmes include services to specific and vulnerable groups, such as women, children, and the elderly, and some cash transfer programmes to low income families. The country also has a comprehensive pension system, under the coordination of the National Social Security Council.

Programa Jefes de Hogar is a conditional cash transfer programme developed in 2002 by the Ministry of Labour and Social Security in Argentina, in order to promote the inclusion in the labour market of unemployed male and female heads of households. This project represents part of the effort of the government to build a more comprehensive social safety net, and therefore alleviate the impacts of the economic crisis that affected the country. The programme provides a payment of 150 pesos per month to the head of household for a minimum of 4 hours of daily work.

Ciudadanía Porteña is a cash transfer programme created to reduce inequalities in the province by offering monthly subsidies that allow poor families to purchase food, hygiene products and cooking gas. It was created in November 2005, and operates through a pre-charged magnetic card, which is used exclusively to purchase basic need items. It is also conditional to education and health responsibilities, which are mainly school and health assistance to young children.

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Brazil

The 1988 Constitution recognized the right to social protection for workers in the rural sector, and especially for those in informal employment. Pension reforms have reduced the age of eligibility. Entitlement typically granted to old age, disability and veteran pensions was extended to workers in subsistence activities in agriculture, fishing and mining, and to those in informal employment. The country also runs the largest cash transfer programme Bolsa Família.

Run by the Ministry of Social Development and Fight against Hunger, Bolsa Família is a conditional cash transfer programme designed to promote immediate poverty relief and to break the cycle of intergenerational poverty by providing subsidies to poor families that comply with health and education requirements. The programme started in 2004, encompassing the various Federal CCTs, under one single database (Single Registry). Today it benefits 11 million families and is the largest in the world.

Benefício de Prestação Continuada (Continuous Cash Benefit Programme) consists of a monthly payment of the minimum wage to senior citizens and individuals incapable of working due to disabilities, as well as to those whose monthly family per capita income is lower than 25% of the minimum wage. The programme started in 1995 and is coordinated by the Ministry of Social Development, though it is delivered by the National Social Security Institute.

The cash transfer programme Projovem was created in 2007 and aim to create opportunities for young people to finish primary education. It also includes professional training and community work. Projovem beneficiaries receive a monthly cash transfer of R$100.00, provided they attend 75% of the classroom activities and hand in 75% of the planned assignments each month.  

The Child Labour Eradication Programme (PETI) was created in 1996 as a cash transfer for children and young people between 7 and 15 years of age, aiming to take children out of labour activites and integrating them into school. It works in alignment with Bolsa Família, and is also managed by the Ministry of Social Development and Fight against Hunger.

References:
Lindert, Kathy; Linder, Anja; Hobbs, Jason; Brière, Bénédicte, 2007, The Nuts and Bolts of Brazil's Bolsa Família Program:Implementing Conditional Cash Transfers in a Decentralized Context.

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Chile

The country has a mandatory private pension scheme in addition to the public one. It replaced the dominant public pension system and now the public and private sectors share responsibility. The system combines a private, competitively managed mandatory saving scheme with a publicly managed minimum pension guarantee. The system covers sickness, maternity leave and unemployment. Institute of Social Security (IPS)

Chile Solidario was created in 2002 by the Chilean Government as a social protection system targeted at people who live in extreme poverty. Under the Ministry of Planning, it aims to offer social assistance and monthly subsidies to poor families through female heads of households. Beneficiaries are entitled to the transfers only for a determined period of time, during which they should be able to improve their living conditions and become independent.

One of the components of Chile Solidario, Pensión Asistencial de Ancianidad is a non-conditional grant provided for senior citizens whose monthly family per capita income is lower than 50% of the minimum wage.

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Colombia

The social security system has three types of programmes: health insurance provided for medical and hospital coverage, the pension system for disability, old age, and death payments; and the family allowance programme for families earning low salaries – the Famílias en Acción.

Famílias en acción is a conditional cash transfer programme that provides subsidies for nutrition and education to underage children from families and indigenous groups living in extreme poverty. Established in 2001, by the Agency of Social Action and International Cooperation of Colombia, it represents a vital component of the programme’s Social Safety Net in strengthening the government’s capacity to reduce poverty and inequality.

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Costa Rica

The Social Security System comprises Unemployment Insurance, Adolescent Work Insurance, Domestic Help Insurance and Income Insurance. Workers have a protection Law which states that all workers must have an individual retirement account and an individual capitalisation account with a public or private pension plan operator.

Avancemos is the conditional cash transfer programme aiming to keep children and teenagers at school. It is one of the priorities of the National Development Plan 2006-2010 of the government of Costa Rica.

References:
Social Security Office
Ministry of Labour

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Dominican Republic

Social security coverage includes old-age pensions and disability pensions, survivors' and maternity benefits and compensation for work injuries.

One of the components of the Social Protection Network of the Dominican Government, Programa Solidaridad provides conditional cash transfers to families for the acquisition of food, school utilities, drugs, civil registry and documentation. It was established in 2005, by the Governmental Decree 536/2005, and it represents a strategy to help groups in extreme poverty escape shortages of food, giving opportunities of inclusion and development of human capital.

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Ecuador

Ecuador has a comprehensive social protection network. Employees in the banking, industry, commerce, and government sectors, and also self-employed professionals are covered for most benefits. Agricultural workers are covered for work injury and unemployment benefits and are gradually being included in the pension, survivors' funds and death benefits. Moreover, in the area of family assistance, Ecuador has an important programme, the Bono de Desarrollo Humano.

Bono de Desarrollo Humano is part of the Social Protection Programme developed by the Ministry of Social and Economic Inclusion. Implemented in 2003, it provides conditional cash transfers to female heads of households with children as well as non-conditional cash transfers to senior citizens and people with disabilities, supporting the development of an effective social protection strategy.

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El Salvador

The country has a private pension scheme, which regulates the establishment and operation of pension fund administration and contains rules to protect the rights of members. Individuals (and their spouses) covered by the system are entitled to sickness and maternity benefits, cover for work related injuries, and pensions on the basis of old age or disability.

Red Solidaria is a social protection programme that grants monthly subsidies to extremely poor female heads of households that comply with the conditionalities, such as attendance in school and health assistance to young children. It provides basic health services, education and nutrition to families living in the 100 poorest regions of the country, and it also offers micro-credit to finance productive projects of small agricultural families. It was created in 2005 by a presidential decree 45/05 and represents a country effort to foster the development indicators and the MDGs goals.

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Honduras

Honduras has social security coverage including old-age pensions, disability pensions, survivors' and maternity benefits, and compensation for work injuries.

Programa de Asignación Familiar focuses on human capital development by creating opportunities for poor and vulnerable groups in Honduras. Originally, it was created to compensate the poor for the negative impact resulting from structural adjustment policies. Since 1998, PRAF, known as a second phase of the programme, aims at fostering investments in human capital of the children of the poorest families in the country, and therefore breaking the cycle of poverty.

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Jamaica

Jamaica offers a contributory social security service at the national level called the National Insurance Scheme, operated by the Ministry of Social Security. In this project coverage includes old-age pensions, disability pensions, survivors' and maternity benefits and compensation for work injuries. Moreover, the government also implemented the National Security Policy (NSP) as a way to organize the country’s major social security policies, goals, responsibilities and actions into an overall strategy.

The Programme of Advancement through Health and Education (PATH) was created by the Government of Jamaica along with the World Bank to deliver conditional cash transfers to vulnerable groups, focusing on children, the elderly, pregnant women, individuals with disabilities and destitute poor adults.

The main objectives of the initiative, which is operated by the Ministry of Labour and Social Security (MLSS), are to achieve better targeting of welfare benefits to the poor and to increase human capital by conditioning receipt of the benefits to certain requirements for school attendance and health care visits.

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Mexico

Mexico's social security program provides health care to formal-sector workers and their families. Those outside the social security network receive health care through a wide array of government sources, such as the cash transfer programme, Oportunidades. In addition to the pension system, there is a mandatory private pension scheme, which manages the eligibility and regulation of the plans.

Oportunidades is a federal conditional cash transfer programme designed to improve the development of individuals living in conditions of extreme poverty, with a special focus on the empowerment of women. Originally namedProgressa, it provides support on health, nutrition, education and income through monthly grants directed to female heads of households. Is has three basic components, two of which are conditional (food support transfer conditional on attending training sessions on nutrition and health, as well as scholarships to children and young adults) and one non-conditional (to the elderly).

The Social Policy of the Mexican Government also includes a wide range of social programmes focused on social rights, equity, preventing violence, promoting citizenship and social protection and assistance such as Programa de Apoyo Alimentar. This programme was created by the Secretary of Social Development of the Mexican Government in 2004 and aims to develope and strengthen the basic capabilities of rural families living in extreme poverty, and thus sustaining a comprehensive social policy and improving the situation of the beneficiaries.

References:
Secretaria de Desarrollo Social

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Nicaragua

According to the Organic Law of Social Security, Decree No 974/ 03-1982, article 52 the Nicaraguan Social Security Institute is the organization responsible for the Pension System in the country.

Red de Protección Social (RPS) , is a conditional cash transfer programme set up in 2000 by the government of Nicaragua that pays households regular cash transfers on the condition that their children attend school and all household members visit health clinics and seminars. In addition, in 2002, the World Bank (WB) and the International Monetary Fund (IMF) approved the Reinforced Strategy for Economic Growth and Reduction of Poverty (RSEGRP).

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Panama

Panama's social security system covers most permanent employees in the formal sector. It protects beneficiaries in case of sickness and maternity leave, old age, disability and war veterans. Social Security Fund

Run by the Ministry of Social Development, since 2006, Red de Oportunidades is a social protection programme that includes conditional cash transfers to female heads of households, social assistance to beneficiary families and the provision of basic services in the poorest areas.

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Paraguay

The social security system, administered by the Social Insurance Institute, offers old-age pensions, invalidity pensions, survivor settlements, sickness and maternity benefits, and work-injury benefits for temporary or permanent disabilities to employed persons and to self-employed workers who choose voluntary coverage. The Railroad and banking sectors and also the public employees have special systems.

Tekoporã is aconditional cash transfer programme which aims at improving nutrition, health and education by providing monthly grants to the country’s poorest families, in order to help them become independent and responsible for their own well-being. It seeks to reduce extreme poverty by issuing direct cash transfers to poor households with children and encouraging investment in human and social capital. The transfers are conditional on school attendance, regular visits to health centres and updating of immunizations. Additionally, t he programme includes a family support initiative that, beyond other impacts, should increase the productive potential of the household and its social participation.

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Peru

The social pension system combines a private, competitively managed mandatory saving scheme with a publicly managed minimum pension guarantee. Social security coverage includes old-age pensions, disability pensions, survivors' and maternity benefits, and compensation for work injuries.

Programa Juntos (National Programme of Direct Support to the Poorest) consists of a conditional cash transfer programme focusing on rural families with pregnant women and children up to 14 years-old. It provides monthly grants to be used according to the needs of each household and only for a determined period of time, until they are able to overcome their condition of vulnerability. Created in 2005 by the supreme decree 032/05, it is an initiative to the poorest and most vulnerable groups aiming to promote fundamental rights.

References:
Presidencia del Consejo de Ministros (Dec 2007). Plan Operativo Annual 2008 – Programa Juntos, Lima.

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Suriname

The Suriname’s Social Safety Net (SSN) is composed of different sets of programs that guarantee a minimum level of security to individuals and households affected by chronic poverty, and by acute negative shocks such as natural disasters or economic downturns, or by restructuring of private and public sector organizations.In 2006, the government of Suriname proposed a reform to unify the social assistance system, placing the Suriname Social Safety Net ( SSN) as a priority within its social development agenda.

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Trinidad y Tobago

Trinidad & Tobago’s social security system covers sickness and maternity leave, old age, disability and war veterans, as well as work injury under the National Insurance Board. The country also manages the National Social Development Programme (NSDP), a special programme designed to assist low income communities by providing and improving the supply of water and electricity to communities, residences, recreational, sporting and other facilities.

The Target Conditional Cash Transfer Programme (TCCTP) is a short-term food assistance and development initiative that is specifically intended to benefit vulnerable individuals and families with limited or no income. It aims to support upgrading the skills of transfer recipients through the conditional component. The programme, which started in 2005, operates within a system of debit, namely with the TTCard, which gives recipients the ability and freedom to purchase basic food items.

References:
Ministry of Social Development

Hailu, Degol and Pemberton, Cecile (2007). A Note on Targeted Conditional Cash Transfer Programme (TCCTP) in Trinidad y Tobago (DRAFT).

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Uruguay

Uruguay has a social security system which includes old-age pensions, disability pensions, survivors' and maternity benefits and compensation for work injuries. All covered persons must become members of a mandatory private pension scheme.

Ingreso Ciudadano was the conditional cash transfer component of the National Plan of Attention to Social Emergency (PANES) that lasted for two years between 2005-2007. Around 140.000 beneficiary households that received Ingreso Ciudadano until 2007 have been transferred to the reformed Asignación Familiar (family allowance) in 2008. The idea is to give a monthly transfer to all children below the age of 18. Before the reform the program covered mostly children in families with formal sector workers, with the reform, the government intends to cover all children in the country. However, the gradual implementation will integrate into the programme children of vulnerable families.


References:
Institute of Social Security
Presidencia República Oriental del Uruguay (April 2007). Plan de Equidad, Montevideo.

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