Title: A Strategic Shift: Iran’s Move to Target Subsidies for High-Income Earners
Government Plans to Refine Social Support System
In a significant step towards optimizing its social welfare program, the Iranian government has announced plans to phase out subsidy payments for the top three income deciles. Ehad Azadikhah, a Member of Parliament and a member of the Agriculture Commission, confirmed the policy, emphasizing the necessity of providing targeted support for lower-income groups. He stated that the eighth, ninth, and tenth deciles should be removed from the list of subsidy recipients to ensure resources are directed more effectively.
Parliamentary Debate on Implementation
While the policy’s intent is clear, its execution is being carefully debated within the Majlis (Parliament). Some MPs have cautioned against abrupt action, highlighting potential socio-economic repercussions. Hosseinali Hajideligani, a member of the Social Commission of the Parliament, warned that a sudden removal of subsidies for high-income earners could create challenges. He proposed a more gradual, phased approach based on the verified income and assets of households to ensure a smoother transition.
Legislative Oversight and Judicial Coordination
Demonstrating the seriousness with which this policy is being pursued, the Islamic Parliament of Iran, in a session held on October 13, 2025, submitted a report on the performance of the Ministry of Welfare in this matter to the Judiciary. This report underscores the legislature’s emphasis on a more rigorous implementation of the subsidy removal for the top income brackets. The Parliament has also called upon the relevant ministry to pursue the policy with greater precision and expediency.
The Mechanism: Identifying High-Income Households
The Ministry of Welfare is utilizing the Iranian Welfare Information Database to classify households and identify those with high incomes. This system analyzes a range of financial, property, and banking data to determine a household’s economic status, moving away from a self-reporting model to a more data-driven methodology.
Key Criteria for Classification
According to the government’s executive by-law, formulated based on the Budget Law of 2024, six primary criteria are used for the decile classification and subsidy removal process:
- Total Household Income: Calculation of all income from various sources.
- Monthly Purchase Transactions: Assessment of the volume of a household’s monthly purchases.
- Property Assets: Evaluation of owned real estate.
- Luxury Vehicles: Ownership of high-value automobiles.
- International Travel: The frequency and cost of trips abroad.
- Residency Abroad: Verification of residence outside the country.
Households meeting one or more of these criteria will be prioritized for subsidy removal. The process is being implemented in stages to minimize potential errors and ensure accuracy.
Policy Objective: Strengthening Targeted Support
The Ministry of Welfare has clarified that the removal of subsidies for the top income deciles is a fundamental requirement under the framework of the 2025 Budget Law. The primary objective is to secure financial resources for the Electronic Voucher Scheme and to provide more robust and targeted support for low-income families, thereby enhancing the efficiency and equity of the national social safety net.