Title: Budget Reforms Accelerate: Subsidy Adjustments to Enhance Social Equity
Introduction
In a significant move to refine its social support system, the implementation of the national budget for the year 1404 has accelerated the process of redirecting cash subsidies. The policy is designed to ensure that financial aid is more precisely targeted, with a focus on supporting lower-income families while phasing out benefits for identified high-income households.
Identifying High-Income Households
A collaborative effort between the Ministry of Cooperatives, Labour, and Social Welfare and the Subsidy Targeting Organization has established clear, data-driven criteria to identify households that exceed income thresholds. These criteria include a comprehensive review of monthly income, property assets, banking transactions, luxury vehicle ownership, and international travel records. According to official calculations, families with a per capita monthly income exceeding 10 million tomans (after deducting rent) are among those who will no longer receive the cash subsidy.
The Phased Implementation
This recalibration of the subsidy program is already underway. Since the start of the current year, approximately 8 million individuals previously classified as high-income recipients have been removed from the subsidy roster. Projections indicate this number will rise to around 10 million by the end of the Persian month of Mehr. The ultimate goal, as outlined in the budget, is for nearly 18 million people from the upper-income deciles to be phased out of the program by the end of the year.
Reallocating Support to Those in Need
A central pillar of this policy is the reallocation of resources. The funds saved from discontinuing subsidies for affluent households will be channeled into an electronic goods-and-services voucher program. This voucher system is specifically designated for the first to third income deciles, ensuring that state support is strengthened for the most vulnerable segments of society.
A Long-Term Strategy for Social Justice
The move to streamline subsidy distribution has been a recurring objective in the nation’s five-year development plans and budget laws. Past challenges in implementation were primarily due to the lack of advanced, integrated data systems for accurate household assessment. With the recent operationalization of interconnected information systems, the government has gained the necessary tools to execute this policy with greater speed and precision. As a result, starting from the beginning of the next Persian year, the eighth, ninth, and tenth income deciles will no longer receive direct cash subsidies, marking a key milestone in this ongoing fiscal reform.