By Sofea Azahar
FINANCIAL anxiety seems not tapering off despite the reopening of economic sectors and the stimulus packages that the 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 improvement 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, more than half have at least one disabled member or with chronic illness (60%) and 21% of the households are headed by females.
What’s more heart-wrenching is to discover that these households have experienced income losses of over 40% mainly due to retrenchments, pay-cuts, reduced working hours, and difficulties in resuming their businesses – households headed by females (66%) and households with disabilities (50%).
A large share of the B40 households earns below RM3,000, with those earning below RM2,000 (41%), followed by those earning between RM2,000 and RM2,999 (26%).
Despite the unemployment rate of these households falling to 7% in September from 25% in May, it is still considered high, surpassing the national unemployment rate of 4.7%.
Additionally, the survey also found most of the households have poor social safety net with 45% 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% are unaware of social protections. In Malaysia, it seems that the lack of awareness amongst beneficiaries about the benefits made available to them has always been the hindrance to receiving perks.
Not only that, 68% of these low-cost households are left without savings. Of the total, households with disabilities are the most vulnerable with 93% having no savings left to survive through the hard times.
This is explainable as anecdotally; disabilities would incur high costs for their 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% of them facing absolute poverty while 97% 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% of household members with disabilities who have not registered with the Department of Social Welfare (JKM).
This 18% who might have been left out from the benefits should be checked on as they might need the assistance.
Thirdly, as mentioned above, 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% 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 their employees in order to ensure 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 realised 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.
Sofea Azahar is Research Analyst at EMIR Research, a think tank focused on strategic policy recommendations based on rigorous research.