Financial anxiety seems not tapering off despite the reopening of economic sectors and the stimulus packages that government had announced due to Covid-19. This is particularly evident for those in the B40 group with more difficulties to go through. Thus, Budget 2021 would be timely to expand the assistance provided for them.
The urgent need to expand the aid for B40 households can be based on the findings revealed in UNICEF-UNFPA’s Families on the Edge 2 report released recently. The survey took place in September-early October involving households living in low-cost flats (PPR) in Kuala Lumpur or known as the urban poor.
Based on the report, although household incomes showed improvements compared with their incomes during the initial phase of movement control order (MCO) in May, they remain below pre-pandemic levels.
To dive into the specifics, the average and median incomes of households headed by females and households with disabilities are weak — below RM2,000.
Among the households, there is more than half with at least one disabled member or chronic illness (60 per cent) and 21 per cent of the households are headed by females.
What’s more heart-wrenching to discover is that these households have experienced income losses of over 40 per cent mainly due to retrenchments, pay-cuts, reduced working hours, and difficulties in resuming their businesses — households headed by females (66 per cent) and households with disabilities (50 per cent).
A large share of the B40 households earns below RM3,000 with most of them earning below RM2,000 (41 per cent), followed by those earning between RM2,000 and RM2,999 (26 per cent).
Despite the unemployment rate of these households falling to seven per cent in September from 25 per cent in May, it is still considered high, surpassing the national unemployment rate of 4.7 per cent.
Additionally, most of the households have poor social safety net with 45 per cent being employed without social protection such as EPF or Socso, and most of them come from households with disabilities.
Some might wonder why wouldn’t they have social protection?
The survey revealed that 41 per cent are unaware of social protections. In Malaysia, it seems that the lack of awareness amongst beneficiaries about the benefits made available for them has always been the hindrance to receiving perks.
Not only that, 68 per cent of these low-cost households are left without savings. Of the total, households with disabilities are the most vulnerable with 93 per cent having no savings left to survive through the hard times.
This is explainable as anecdotally; disabilities would incur high costs for the check-ups and treatments and their inability to work and having to rely on other household members to earn a living could be insufficient.
All of the unfortunate situations this year have led to 50 per cent of them facing absolute poverty while 97 per cent of them live in relative poverty, hence, support the increasing financial anxiety since the pandemic.
Budget 2021 is hoped to be a generous one and unquestionably the element of empathy should be part of all considerations as to help the unfortunate livelihoods in weathering through the unprecedented crisis.
Several solutions can be taken into account to provide extensive support to the people within this group and primarily to address the financial anxiety.
Firstly, given that the households find government’s cash assistance most helpful, the quantum of cash assistance via Bantuan Sara Hidup (BSH) and Bantuan Prihatin Nasional (BPN) can be revised higher at least by RM200 for the B40 households.
Secondly, another interesting finding from the report which might have caught one’s attention is that there’s a remaining 18 per cent of household members with disabilities who have not registered with the Department of Social Welfare (JKM).
To be assuming the reasons why such happened can be inaccurate but this 18 per cent who might have been left out from the benefits should be checked on as they might need the assistance.
Thirdly, as mentioned above, the low knowledge about the importance of social protection amongst the urban poor should not be underestimated.
Ways to beef up financial literacy within the group should be planned and it should also be the employer’s responsibility to ensure the employees are aware of social protection as 27 per cent said their employers did not register them for EPF and Socso.
This action plan should be done in a transparent manner between the employers and the employees in order to ensure the employees understand the importance of keeping themselves protected and the consequences of not being aware of it.
Finally, the proposal to increase JKM’s monthly assistance for the vulnerable groups should be realized through the national budget because they are really in need of all the help anyone could offer. Application and approval processes should also be made convenient for the eligible recipients.
Some ground experiences were reported by NST in September. For instance, R. Papamah from Sentul said the RM300 worth of aid she receives had not been changed in a decade and given that cost of living has risen, the same quantum does not help.
Although the report only represents the urban poor, the finding can be an indicator to how much the B40 households have to bear. This is only the urban poor, it could be worse for the B40 households in the rural areas.
It cannot be denied that everyone is going through a difficult time because of the pandemic and many people are suffering on the ground. But in lending a helping hand, priorities must be set in a proper manner and B40 households is one of them.
Nur Sofea Hasmira Azahar is Research Analyst at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.