Iran Launches Fourth Phase of Targeted Subsidy Program to Support Low-Income Households
The Head of Iran’s Plan and Budget Organization announced that funding for the fourth phase of the commodity voucher (کالابرگ) scheme has been secured, with resources transferred to the Ministry of Welfare on September 5. Payments will be distributed sequentially, starting with the lowest-income deciles, and are expected to become available for public use starting tomorrow.
The primary goal of this initiative is to boost the purchasing power of low and middle-income families and improve their access to essential goods at stable prices.
What Is the Phase 4 Commodity Voucher and Why Does It Matter?
The electronic commodity voucher program was introduced last year as a complementary mechanism to the existing cash subsidy system. It provides eligible families with a designated credit to purchase basic goods. The fourth phase is particularly significant due to several key improvements:
- Diversified funding sources, including the reallocation of subsidies from higher-income deciles.
- Increased credit amounts for lower-income households.
- Enhanced accessibility through both online and in-person purchasing options at selected retailers.
A central question remains whether the program can effectively alleviate inflationary pressures on households—an issue that will become clearer in the coming months.
Eligible Groups and Credit Amounts
According to official government statements, the fourth phase allocates credits as follows:
- Deciles 1 to 3: 500,000 tomans per person.
- Deciles 4 to 7: 350,000 tomans per person.
- Deciles 8 to 10: Not eligible in this phase.
For a four-person family in the first decile, this amounts to a total monthly credit of 2 million tomans—a substantial contribution to their household expenditure.
Funding Sources for the Fourth Phase
To address concerns regarding the financial sustainability observed in earlier phases, the government has secured funding from two primary sources:
- Reallocation of cash subsidies from higher-income deciles (8 to 10).
- New taxes and duties on imports of luxury goods and automobiles.
This diversified approach aims to ensure the program’s continuity and reduce reliance on unstable budget sources.
Rollout Timeline
The Ministry of Welfare has confirmed that the disbursement of credits began on September 5, 2024. Depending on presidential directive, future payments may be distributed on a monthly or quarterly basis. If the quarterly model is adopted, the next transfer is expected in the autumn of 2024.
Eligible Goods and Purchase Mechanisms
The voucher credit can be used to purchase essential items including:
- Iranian and foreign rice
- Cooking oil
- Frozen poultry and red meat
- High-consumption dairy products (milk, yogurt, cheese)
- Legumes
Eligible citizens can make purchases using their subsidy cards or through the dedicated “Shoma” application.
Addressing Past Challenges
Previous phases faced operational challenges such as limited partner store coverage and occasional product shortages. In response, the government has pledged to expand the network of participating retailers, improve digital infrastructure to prevent technical disruptions, and strengthen price monitoring mechanisms.
Balancing Challenges and Opportunities
The program continues to navigate challenges including market price volatility, occasional product shortages, and dissatisfaction among higher-income groups no longer receiving benefits. However, it also presents valuable opportunities to strengthen social equity, enhance food security, and increase transparency in the distribution of subsidies.
With increased credit amounts and more stable financing, Phase 4 of the Electronic Commodity Voucher program holds promise for supporting vulnerable households. Its long-term success will depend on sustained management, reliable resource allocation, and effective implementation of government commitments.
