The government is studying whether disposable income could serve as a fairer and more accurate way to identify households in need of financial assistance. Deputy Economy Minister Datuk Hanifah Hajar Taib said the proposal requires further assessment to ensure that it can be implemented effectively.

She explained that current aid programmes rely on the Poverty Line Income, which measures a household’s ability to meet essential needs such as food, non-food items, housing, healthcare, and education. Income group classifications continue to shape social policies by grouping households within the national income distribution through statistical modelling.

Hanifah said the present system still focuses on B40 households, with eligibility determined using gross household income. She was responding to parliamentary questions on whether the government would shift from gross to disposable income when assessing eligibility for aid and subsidies.

Updated Income Levels From The Latest Household Survey

Hanifah referred to findings from the Household Income and Expenditure Survey 2024. She said all income groups recorded growth supported by wages, self-employment, asset returns, investments, and informal transfers.

The B40 group saw median household income rise from RM3,440 in 2022 to RM3,815 in 2024, representing average annual growth of 5.2%. The middle 40 group recorded growth from RM7,694 to RM8,599, averaging 5.6% each year. The T20 group saw an increase from RM15,867 to RM16,517, reflecting average annual growth of 2%.

Government Evaluates Transition Away From Blanket Subsidies

Alongside the review of income-based criteria, the government is also assessing a broader transition from blanket subsidies to MyKad-based targeted support. Deputy Finance Minister Lim Hui Ying said this approach is part of a long-term plan to ensure that assistance reaches Malaysians who meet verified eligibility criteria.

She said the immediate priority is the smooth rollout of the Sumbangan Asas Rahmah programme, which forms the foundation of the government’s shift towards targeted aid. This programme, together with Sumbangan Tunai Rahmah, continues to strengthen the national social safety net.

Digital Platforms Strengthen Aid Distribution

Lim said the distribution of government assistance has already moved to more comprehensive digital systems. The Welfare Department’s e-Bantuan platform uses clear eligibility criteria and processes payments through electronic funds transfer, allowing cash assistance to be credited directly into recipients’ bank accounts. She said these enhancements support more transparent and reliable aid management.

The government remains committed to monitoring economic conditions and ensuring that subsidy schemes continue to support Malaysians coping with higher living costs. Lim was responding to questions in Dewan Rakyat on whether MyKad-based assistance could eventually replace existing subsidies.

MyKad As A Verification And Delivery Tool

Lim said MyKad can serve as an effective method of identity verification, ensuring that subsidised benefits are received only by Malaysian citizens. The use of MyKad also helps agencies monitor implementation more efficiently and minimise the risk of misallocation.

She highlighted that allocations for STR and Sara have increased over time. A total of RM13 billion has been allocated this year compared with RM10 billion in 2024. These programmes, particularly Sara, form part of the government’s efforts to help households manage higher living costs.

How These Changes Affect Consumers

The reviews underway are expected to influence how Malaysians qualify for government assistance in the future. If disposable income becomes part of the eligibility criteria, households that have high expenses despite moderate earnings may be assessed more accurately. This could help support families who struggle with essential costs even if their gross income appears sufficient on paper.

The shift towards MyKad-based assistance means that aid distribution may become more streamlined and easily verified. For consumers, this could reduce manual paperwork, lower the risk of duplicate claims, and speed up access to payments credited directly into bank accounts. It may also lead to more targeted subsidies, which can better match the needs of lower- and middle-income households.

For small traders and SMEs, targeted financial assistance helps maintain consumer spending. This spending supports business activity and contributes to broader economic performance.

Targeted Aid Supports Wider Economic Activity

Lim added that targeted financial assistance has positive spillover effects on the wider economy. Spending by supported households benefits small traders and SMEs, contributing to national economic performance. She noted that Malaysia recorded growth of 5.9% in the second quarter of last year, supported by a strong labour market, low unemployment, stable inflation, and measures that helped maintain household purchasing power.

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