An idea of asset-based welfare (ABW) has been argued that housing asset-based welfare or property-based welfare with the role of the state shifting from providing social housing or subsidies for different housing tenures into promoting homeownership as an effective pension in stone or quasi old age insurance by reducing housing expenses after retirement.  The rise of ABW discourses and practices fits within the idea of a great risk shift from collective social insurance through the state to welfare self-provision mediated by financial markets from seeing moderate housing debt as a necessity to enable homeownership to seeing soaring housing debt as an alternative to income growth in Brazil. Here we argue an other point that the Brazilian compulsory savings account system could be considered an attempt to promote ABW ideology and  practices. The main goal of Brazil’s  was to implement a compulsory savings account for all workers in the formal labour market. Employers deposit 8% of the employees’ wages into a savings account that employees can cash out upon retirement.

The main goal of Brazil’s FGTS model was to implement a compulsory savings account for all workers in the formal labour market. Employers deposit 8% of the employees’ wages into a savings account that employees can cash out upon retirement. However, one of the exceptions is to use one’s current FGTS funds to make a down-payment on a house or to pay off a significant part of a mortgage loan. Most Brazilians tend to use their personal FGTS account to acquire a house roughly halfway their working lives and collect the remaining balance once they retire. Brazil’s FGTS is somewhat similar to Singapore’s Central Provident Fund, as both are state-managed, mandatory savings accounts that can be used as a replacement income for pensioners as well as for the purchase of a house.