T15 income level will be based on location, as RM15k is considered rich in Kelantan, but not in KL – Rafizi

Economy minister Rafizi Ramli has reiterated that the definition of the T15 category that will be excluded from RON 95 petrol subsidies (or will it be T10/T5, floated by prime minister Datuk Seri Anwar Ibrahim on Sunday) is expected to take into account location and net disposable household income.

Rafizi said that the details, which is expected to be completed in a month, are now being finalised in collaboration with the finance ministry before being passed to the cabinet for approval. These details are necessary to provide a more accurate framework for the T15 classification, which will be determined based on locality instead of the national average used by previous policies, he said.

“It (T15) will not be a simple line (of definition) for the entire country because expenses vary, and living standards differ by area. If we apply a blanket definition for the whole country, that’s where injustice occurs,” he said in Melaka, reported by Bernama.

T15 income level will be based on location, as RM15k is considered rich in Kelantan, but not in KL – Rafizi

“Someone earning RM15,000 in Kuala Lumpur, which is in an expensive area, may not be considered as wealthy as someone earning RM15,000 in Gua Musang… so the determination (of T15) will likely be based on location,” the Pandan MP explained. Gua Musang is in Kelantan.

Aside from where one resides, the T15 classification will also take into account net disposable income of a household, which will in turn look at the number of dependents ‘based on the basic cost of a decent living’.

“This means that for each family of a certain size, what is the minimum amount needed to lead a decent life. A decent life is defined not just by having a good home and access to food and drink, but also includes expenses for participating in social activities, entertainment, and so on… with health being well taken care of,” Rafizi elaborated.

This isn’t the first time that the minister is mentioning classification based on more than just a household’s income. Last week, he said that the government will take into account net household income ‘to ensure the people can lead a decent life’.

T15 income level will be based on location, as RM15k is considered rich in Kelantan, but not in KL – Rafizi

“I can confirm that the new method will not depend solely on gross household income. We are currently working on improvements based on net household income. It will also consider several other factors. Once that’s finalised, we can then set the statistical lines (for population groups) such as B40 and T15,” he said last week.

The term ‘T15’ is a new one, first mentioned by the PM in Budget 2024. Referring to the top 15% earners in Malaysia who he described as maha kaya, this group will no longer enjoy subsidised RON 95 when targeted subsidies for petrol comes into place from mid-2025.

As there was no elaboration then on who exactly is T15, many searched and found stats that pointed to RM12,000 or RM13,000 income as the point where a Malaysian household is classified as T15. For a working couple, that’s RM6,000 salary each, so many were shocked that they could be the maha kaya who will have to pay market price for petrol. Anwar, who is also finance minister, then walked back on his T15 definition. Curiously, PMX doesn’t really talk about this net household income model, at least not publicly.

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