KUALA LUMPUR: The government is considering an index-based approach to determine the eligibility of recipients for its social assistance and poverty eradication programmes.
The index-based system and eligibility-based net household disposable income are two new approaches being looked into by the government to ensure a fair and more effective mechanism for the distribution of resources and subsidies in a targeted manner.
The Economy Ministry said the index-based approach will take into account the eligibility of aid recipients on a broader scale instead of focusing only on the household income of a person or a family.
"The transition into these two new approaches (index-based and net household disposable income) will be supported with the Central Database Hub (Padu).
"Padu serves as a comprehensive database in assisting the government to formulate policies and development programmes, including socio-economic programmes and comprehensive poverty eradication," the ministry said in a written parliamentary reply published on Parliament's website last night.
The ministry was responding to a question from Datuk Seri Hishammuddin Hussein (BN - Sembrong) who asked the ministry for updates on the government's plan to replace the existing socio-economic income classification with net disposable income.
Hishammuddin also asked the ministry on how the transition into aid eligibility based on net disposable income would help the government ensure fairness in the distribution of its resources.
The ministry added that the integrated data in Padu contains profiles of individual and household information including biographical, demographic, employment, income, household information, person with disabilities (OKU) status and other records.
The government, the ministry said, was of the view that the disposable income concept as the foundation in deciding eligible recipients of aid and assistance programmes could reduce the risk of leakages and that the approach was more just.
Economy Minister Rafizi Ramli last year had said that the government planned to do away from the existing B40, M40, and T20 income classifications this year.
Instead of the current classification based on fixed income, he said the focus would shift towards net household disposable income.
Rafizi added that several initiatives and policies implemented by the current government differed from the previous administration's approach, especially in matters concerning aid or subsidies.