Iran Refines Subsidy System with New “Retail Spending” Metric
In a significant move to enhance the precision of its social welfare programs, the Iranian government has introduced a new economic indicator to its cash subsidy allocation framework. This policy refinement aims to more accurately identify household income levels and ensure support reaches its intended beneficiaries.
A New Measure for Fairer Distribution
The key change involves adding “retail spending” as a core criterion for income decile classification. Under this new system, households whose combined six-month average of retail purchases and monthly rent payments exceed a specific threshold will be reclassified into higher income brackets, leading to the cessation of their direct cash subsidies.
This reform is designed to create a more accurate financial profile of households and better identify high-income families. The retail spending index is derived from transactions processed through point-of-sale (POS) terminals in stores, with data averaged over a six-month period to provide a stable overview of everyday expenses.
How the New Bracket System Works
The mechanism is straightforward: a household, for instance a family of three, will only have its subsidies removed if its average monthly retail and rental expenditures surpass the designated ceiling. This approach allows the government to utilize accessible consumption data to complement other financial metrics.
A primary challenge in income assessment has been the lack of complete transparency in bank accounts and income information. Experts suggest that analyzing retail spending patterns can be a more reliable tool for gauging a household’s true economic standing than simply reviewing bank account turnovers.
Safeguards and Considerations for Retirees
To prevent seasonal purchases or one-off large payments from skewing the results, the six-month averaging method is employed. This reduces potential errors, though it is acknowledged that some middle-income households with atypical spending habits might be inadvertently placed in a higher bracket.
Retirees from the Social Security Organization are subject to the same comprehensive economic decile assessment as all other citizens. Given the diversity in pension amounts and living conditions, retirees are not all placed in a single category. Their classification is determined by a multi-factor analysis, including:
- Pension Amount: Based on work history and insurance premiums paid.
- Household Income: The income of other family members is a significant factor.
- Assets and Properties: The number and value of vehicles, real estate, and bank deposits are considered.
- Family Size: The ratio of total household income to the number of dependents is a key determinant.
Checking Your Status and Appeals Process
To check their new income decile status, retirees and all citizens can visit the dedicated support portal at hemayat.mcls.gov.ir. The process involves entering the site and verifying identity via an SMS code to view the household’s classification.
The government has emphasized that decile classification is updated periodically. A formal appeals process is available for those who believe their classification is inaccurate, either through the online portal or by contacting the dedicated hotline at 1428.
The Broader Picture of Subsidy Allocation
This refined decile system is central to the targeted allocation of cash subsidies and livelihood assistance. Households are generally grouped into three broad categories:
- Deciles 1-3: The lowest-income households receiving the highest level of support.
- Deciles 4-7: Middle-income households receiving reduced subsidies.
- Deciles 8-10: Higher-income households likely to be excluded from the subsidy program.
This systematic approach is a crucial tool for advancing social justice, ensuring that state support is directed in a targeted manner to those with the greatest need. The ongoing refinement of these mechanisms is aimed at strengthening economic equity across society.