Malaysia is studying a Net Disposable Income framework while retaining the B40, M40 and T20 system during the review process.
PETALING JAYA: The government is considering replacing the B40, M40 and T20 household classification system with a Net Disposable Income (NDI) framework to improve the targeting of financial aid, Economy Minister Akmal Nasrullah Mohd Nasir said.
In a written reply to the Dewan Rakyat, he said the proposed approach would take into account households’ actual financial commitments, cost-of-living differences and demographic factors to ensure assistance reaches those who need it most.
“The government is considering more inclusive and equitable methods for identifying target groups, including the use of the NDI method.
“This concept can serve as a basis for aid distribution to reduce the risk of eligible recipients being excluded, while considering decent living standards, location differences and household demographics,” he added.
Akmal was responding to Datuk Seri Ismail Sabri Yaakob (BN-Bera), who asked whether the government was reviewing the current household income classification system.
He also said the NDI framework would first deduct statutory commitments such as Employees Provident Fund (EPF) contributions, Social Security Organisation (Socso) contributions, income tax and zakat from gross household income to determine disposable income.
“Basic living expenses would then be deducted, with the remaining amount representing income available for savings or discretionary spending.
“The government would continue using the existing B40, M40 and T20 classifications for aid distribution and socioeconomic analysis while reviewing ways to better reflect households’ actual financial pressures,” he said.
Akmal said that, based on the Statistics Department’s 2024 Household Income and Expenditure Survey (HIES), the T20 income threshold had increased to RM12,680 and above, compared with RM11,820 and above in 2022.
He added that the top one per cent (T1) income threshold stood at above RM40,195, covering households earning RM100,000 and above.
“Further studies and comprehensive household data are needed before implementing any revised classification system under the 13th Malaysia Plan (2026-2030),” he said.
Akmal added that the Economy Ministry was currently in discussions with relevant ministries and agencies to identify suitable pilot projects for the proposed framework.
