KUALA LUMPUR: Where you live, how many dependents you have and how much electricity you use should be part of the criteria to determine whether you belong to the top 15 per cent (T15) income group, say experts.
During the tabling of the 2025 Budget, it was announced that the T15 would no longer be eligible for health, education and fuel subsidies under the government's targeted subsidies plan.
In 2022, the T15 group was defined as those with a household income of at least RM13,295.
Several economists agreed that household income alone should not be used as a benchmark to determine eligibility for government subsidies.
"It (T15 status) cannot be based on household income. There are too many modifying factors, such as size of household, location and more.
"The use of T15 is misleading if it refers to Statistics Department household income numbers," said economist Dr Nungsari Ahmad Radhi.
Bank Muamalat chief economist Dr Mohd Afzanizam Abdul Rashid said one key variable that should be highlighted was geographical location, particularly the distinction between urban, suburban and rural areas.
"Cost of living varies drastically across these regions and this must be taken into account.
"I think the government would want to clearly define those who need help and those who are well off, who may require less assistance or none.
"That way, the government spending will be fully optimised and there would be less wastage."
Economist Dr Geoffrey Williams said household composition was also a critical factor as the number of income earners within a household could distort the picture of financial wellbeing.
For instance, a household with two parents and two adult children each earning RM3,500 might seem high-income collectively, but individually, the earners were not necessarily wealthy, he said.
"The net disposable income measure might be useful as it takes account of obligations, but these are often also personal choices, so it is still subjective."
He said with the Central Database Hub (Padu), data on household income and expenditure should be clearer, but the focus should be on objective measures, not "deserving" and "undeserving" categories based on lifestyle choices.
"The simplest and most efficient approach is to set a threshold and provide assistance below that threshold through direct cash transfers or reverse income tax as a form of universal basic income."
Nungsari proposed shifting the focus to consumption-based criteria.
He said electricity consumption could be used to gauge income, as households with higher electricity usage were likely to have higher income.
He cautioned that implementing a consumption-based subsidy system presented challenges, particularly with products like RON95 petrol.
He argued that given the challenges, the simplest solution was to remove subsidies entirely and focus on direct cash transfers to targeted groups.
Putra Business School economic analyst Associate Professor Dr Ahmed Razman Abdul Latiff said other variables to consider could be the number of children per household or workplace distance from home.
Universiti Kuala Lumpur Business School economic analyst Associate Professor Aimi Zulhazmi Abdul Rashid said logistical and commuting costs could take up a huge chunk of household expenses.
He said many individuals who work in high-paying urban centres, such as Kuala Lumpur, commute daily or weekly from neighbouring regions like Seremban, Negri Sembilan.