Under fire, Putrajaya mulls stopping cash payments for BR1M

KUALA LUMPUR, Oct 13 — The federal government is considering changing its direct cash handouts given under the 1 Malaysia People’s Aid (BR1M) to ensure that it will be spent solely on essential goods and not luxuries, a senior official said today.

Ministry of Finance secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah said the government was looking at strategies such as the food stamp system in used by the US, among others, to ensure that cash aid was not spent on items such as “handphones.”

This comes amid criticisms by Pakatan Rakyat (PR) on the increase of 1 Malaysia People’s Aid (BR1M) in the 2015 budget, which was increased by nearly 50 per cent.

“It will be a replacement for BR1M, to ensure it is better targeted and we are looking to implement in 2016,” he told reporters when met at the sidelines of a post-budget forum organised by the Malaysian Economic Association.

Irwan said one of the proposals would be to disburse aid on a monthly basis and for this to be used strictly to purchase goods from supermarkets.

“Like food stamps, it can only be used to buy certain things, rice, sugar basic foods.

“This is in the pipeline,” the MOF official said earlier during a question-and-answer session at the forum.

Ministry of Finance secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah said the government was looking at strategies such as the food stamp system in used by the US, among others, to ensure that cash aid was not spent on items such as 'handphones.' — DNA pic
Ministry of Finance secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah said the government was looking at strategies such as the food stamp system in used by the US, among others, to ensure that cash aid was not spent on items such as 'handphones.' — DNA pic

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Irwan said that this will ensure government aid is spent wisely and to avoid wastage.

Among others, he said that government is considering using a mechanism that would allow the purchase of essential goods using a person’s MyKad.

In his 2015 Budget unveiling, Prime Minister Datuk Seri Najib Razak announced that BR1M for households with monthly incomes of RM3,000 and below will rise by RM300 to RM950, while households with incomes between RM3,000 and RM4,000 will enjoy handouts of RM750, up from RM450 previously.

Najib said that the higher handout will be financed by Putrajaya’s new consumption tax, the goods and services tax (GST), which starts in April 2015.

Those earning RM3,000 and below would receive RM300 in January and May respectively with the final payment of RM350 to be paid in September.

Households earning between RM3,000 and RM4,000 would receive RM200 in the first two payments  and RM350 later.

Singletons aged 21 and above with monthly incomes below RM2,000 will also get a higher handout. Their aid will be increased from RM300 to RM350.

All payments will be disbursed early next year.

The BR1M was first introduced in 2012 ostensibly as a one-off aid to help low-income households cope with the rising cost of living.

But the cash handout was later institutionalised, expanded and increased to RM950 next year.

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