KUALA LUMPUR, Oct 26 — The government will implement the Net Disposable Income (NDI) approach in 2027 to ensure aid eligibility assessments take into account demographic factors and liabilities, in addition to income.
Deputy Economy Minister Datuk Seri Mohd Shahar Abdullah said the approach is more equitable because it considers basic expenditures and sociodemographic factors when evaluating a household's financial standing.
“The government will ensure that everything we implement takes into account not only the lower-income group but also encompasses the entire spectrum of Malaysian society,” he said during a question-and-answer session in the Dewan Rakyat today.
Shahar was responding to Jelebu MP Datuk Seri Jalaluddin Alias's supplementary query on whether the government intends to implement a specific action plan to strengthen the middle class's economic position, including income growth, easing financial pressure from basic commitments, and expanding social protection.
Earlier, in response to Jalaluddin’s question about the government’s assessment of the middle class's true status, he said policy-making cannot rely solely on gross income estimates.
“The Economy Ministry is currently in discussions with relevant agencies to implement a pilot project aimed at understanding the impact of adopting the NDI approach on the nation’s fiscal position," Shahar said.
He added that, based on the 2024 Household Income Survey conducted by the Malaysian Statistics Department (DOSM), the M40 group has a monthly gross income ranging from RM5,860 to RM12,679, averaging RM8,744 per month.
Meanwhile, on expenditure, DOSM data indicate that nearly 70 per cent of the M40 group’s income goes to basic costs, including 22.7 per cent for housing and utilities, 34.1 per cent for food, and 10.6 per cent for transportation.
“After accounting for medical protection commitments, the remaining income at the end of the month is very little,” Shahar said.
While awaiting the finalisation of the new measurement methodology, the government, through Budget 2027, has introduced measures to alleviate the burden on the public, including the middle class, covering areas such as housing, education, healthcare, taxation, and wages.
Some government aid has begun shifting toward a wider approach, such as BUDI95 and the Early Schooling Assistance, which benefit Malaysians in general, including the middle class.
Regarding the income thresholds for the B40, M40, and T20 categories, he said these limits are adjusted based on household income and expenditure surveys conducted twice during each Malaysia Plan.
For instance, Shahar noted that the income range for the M40 group increased from RM5,250-RM11,819 in 2022 to RM5,860-RM12,679 in 2024.
The next survey will be carried out in 2027, with the results to be published in 2028.
