Rafizi: B40, M40, T20 classifications to be phased out for disposable income measure, RON95 subsidy to cover 85pc of households

KUALA LUMPUR, January 9 — Economy Minister Rafizi Ramli today said that the government will finalise its plans to dissolve the B40, M40, and T20 income classifications in a few weeks.

He mentioned that once the decision is made, the next step will be to identify the recipients eligible for RON95 subsidies.

This proposal has been communicated, but a formal decision needs to be made. As per the 10th Malaysia Plan, the government has been implementing the policy using the B40, M40, and T20 method since then.

The process is ongoing and, if everything goes as planned, we should be concluding the government's commitment to approve the Ministry of Economy's proposal within the coming weeks.

"It was reported that, once this decision has been made, the subsequent step would be to identify individuals qualified to receive RON95 subsidies. Implementing this new method aims to benefit approximately 85 per cent of households," he added.

In 2023, Putrajaya announced plans to switch to "household net disposable income" as a metric to classify Malaysians' income, in an effort to make subsidies more effective in assisting those with financial difficulties.

Malaysia writes the household income into three categories - the lower 40%, the middle 40% and the upper 20% - with aid and policies arranged according to these.