Rewritten Title: Iran Refines Subsidy Program, Reallocating Funds to Strengthen Social Safety Net
In a significant move to enhance the efficiency and equity of its national welfare system, Iran is progressing with the strategic reallocation of its direct cash subsidies. This policy, rooted in the national budget law, is designed to ensure that state support reaches those most in need.
Phasing Out Subsidies for Higher-Income Groups
Reports indicate that approximately 8 million individuals identified as higher-income have already been removed from the cash subsidy recipient list. This number is projected to reach 10 million by the end of the current Iranian month of Mehr, with a total of around 18 million expected to be phased out by the year’s end. This action is being undertaken by the Ministry of Cooperation, Labour, and Social Welfare in coordination with the Subsidy Targeting Organization, as mandated for the current fiscal year.
The core objective of this policy is to re-channel the financial resources saved from these removals directly into bolstering support for the most vulnerable segments of society.
Reinvestment in Vulnerable Households
A pivotal aspect of this initiative is the legislated directive that all savings generated from the removal of subsidies for the top income deciles (7, 9, and 10) must be allocated to fund an electronic food coupon system for the lowest-income families (deciles 1 to 3). This ensures that the policy’s net effect is a more targeted and substantial support mechanism for those with the greatest need.
Clear and Defined Eligibility Criteria
The government has established transparent, income-based criteria to identify households that will no longer receive the universal cash transfer. The thresholds are scaled according to household size to ensure fairness. For example:
- A single-person household with an annual income exceeding approximately 30 million Tomans (three times the minimum wage) will be removed.
- A four-person household faces removal if its annual income surpasses roughly 52 million Tomans.
In practical terms, this has led to the identification and removal of many families with a monthly income exceeding 10 million Tomans. It is important to note that these calculations are based on income and do not include housing rental costs.
This ongoing refinement of the subsidy program underscores a commitment to fiscal responsibility and social justice, ensuring that state resources are deployed where they can have the most impactful and stabilizing effect on the lives of citizens.