KUALA LUMPUR — The government will use households’ net disposable income when disbursing targeted subsidies for RON95 petrol, the Economy Ministry said.
Net disposable income will provide a more realistic assessment of a household’s financial ability to meet its commitments, it said.
“Additionally, the use of net disposable income will be able to reduce the dropout error in the distribution of aid by ensuring that only the truly deserving receive aid,” the ministry said in a parliamentary written reply.
A new index, called the Basic Expenses for Decent Living or Perbelanjaan Asas Kehidupan Wajar (PAKW), will be used to identify recipients of the targeted RON95 subsidy, the ministry added.
“Through PAKW, the transition from the classification of gross income to net disposable income will ensure a fairer determination of the eligibility of aid recipients.
“This method has taken into account factors that can give a more complete picture of the true financial position of the household by identifying the actual amount that can be used after deducting all mandatory deductions, such as income tax, zakat and contributions to Employees Provident Fund (EPF) and SOCSO,” said the written reply.
The ministry was replying to Lim Guan Eng (Bagan-PH) who asked if the RON95 subsidy could be maintained if salaries could be progressively raised from RM100,000 to RM200,000 annually, while providing financial assistance to the M40 and business groups.
The Economy Ministry said the government’s decision in principle to withdraw blanket RON95 subsidies by mid-2025 stays, as announced during the tabling of Budget 2024.
It reiterated that the RON95 subsidy will be re-targeted to ensure that 85% of people continue to enjoy it.
The PAKW index was developed and released earlier this month by the Statistics Department.
The index takes into account different cost of living expenses according to household size and location, whether rural or urban and by district.
It uses a cost of living calculator, which the public can access at https://mypakw.dosm.gov.my, to help users check the estimated monthly cost of living expenses in each district according to the size of a household.
Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the index will be updated annually to serve as a reference for the government to identify what people in various locations need to afford a decent living. – November 8, 2024