He noted that finance minister Tengku Zafrul Aziz had made several statements indicating that the government was leaning towards implementing targeted subsidies.

However, he said the government should target those subsidies based on disposable income instead of the B40, M40 and T20 household income classifications.

“We need to abolish using the B40, M40 and T20 income limits, and instead introduce an approach based on disposable income, taking into account the income, expenses and the number of dependents in each household,” he said in a statement.

Rafizi said that although using household income classifications to determine recipients of welfare and subsidies was simpler and allowed for faster implementation, it had several major drawbacks.

“It is based on income alone. It does not take into account living expenses when determining the economic position of a household,” he said.

He said that when income limits were purely determined statistically, it did not translate to the real economic situations that families faced.

“For example, just because the ‘upper cut-off point’ for the B40 is RM4,850 per month, all families earning RM4,851 and above are categorised as ineligible (regardless of their specific conditions).”

He said he would elaborate further on his proposal in future statements.