T15 definition soon, move from gauging income to expenses - Rafizi

Proposals related to the definition and classification of the T15 income group are being refined and will be decided by the cabinet soon, said Economy Minister Rafizi Ramli today.

He said several proposals are being discussed and if the government agrees, then the T15 classification will be used to provide government aid and subsidies.

“The proposed classification of T15 from the Economy Ministry is to move from the approach based on gross income that was previously used, namely B40, M40, and T20, to the net disposable income method to ensure a more inclusive and fair measurement and targeting (of aid),” he told the Dewan Negara.

He said this in response to Senator Baharuddin Ahmad who asked for details regarding the T15 group, which will see a withdrawal of fuel, education, and health subsidies as announced by Prime Minister Anwar Ibrahim in Budget 2025.

Rafizi said the definition and classification mechanism of the T15 group based on net disposable income can be prepared using information in the Central Database Hub (Padu) by taking into account an element called “reasonable basic living expenses” (PAKW).

According to him, PAKW refers to the amount of expenditure required by households to live a reasonable life that can meet their needs and wants and have the opportunity to participate in social activities in the community.

In addition, Rafizi said PAKW can also clarify the cost of living in different areas between states, becoming an indicator in socio-economic planning and development, determining fairer wages, and helping individuals and families plan household expenses and financial management.

Rafizi said the use of PAKW can help reduce errors in the distribution of aid by ensuring only the truly deserving receive them.

“I hope that through better household financial information, we can expand to other implementations including Haj subsidies that can use data and fairer classification of the people,” he added.

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