The Removal of Subsidy Recipients Has Begun; Ministry of 'Welfare' Announced Changes in Income Classification

One day after media reported the commencement of the removal of subsidy recipients based on the current year's budget law, the Ministry of Welfare announced a subsequent change in the classification of subsidy recipients to take effect in six months. Accordingly, the Ministry of 'Cooperation, Labor, and Social Welfare' has stated that at this stage, 60,000 new households have been added to the tenth income decile and upper percentiles, and will no longer receive subsidies. The head of the Iranian Welfare Studies and Information Center has announced that based on the 'legal obligation' of the 1402 budget, household information has been updated. This issue, referred to by Alireza Mohammadi, was covered yesterday, Saturday, January 13, by the Tasnim news agency under the title 'Removal of Subsidies from Higher Deciles.' Mohammadi's statements regarding changes in classification and the implementation of 'percentile classification' indicate a further separation of individuals based on income and a groundwork for the gradual removal of households from the list of subsidy recipients. Experts believe that although officials deny the removal of the eighth and ninth deciles from the list of subsidy recipients, according to the budget law, the three deciles from eighth to tenth must be removed from the list. In October of this year, Alireza Asgariyan, Deputy Minister of Cooperation, Labor, and Social Welfare, stated that the income classification of households would change from 'decile' to 'percentile' within a month. These statements have been interpreted by experts as a pretext for removing subsidy recipients. In this context, Asgariyan explained that 'suppose someone is currently in the seventh decile and receives a subsidy and is eligible for an incentive subsidy; now if their decile changes to, for example, the eighth, this person will receive their subsidy but will no longer be eligible for the incentive purchase and additional subsidy, and if they move to the tenth decile, their subsidy will be removed.' Asgariyan also emphasized in December of this year that 'percentile classification has been carried out, but we need to apply the data from the second half of the year (household income data), and in this case, changes will definitely occur between deciles.' Data that seems to have been applied, and in the latest subsidy payment period, some subsidy recipients were removed from the list, which the Tasnim news agency reported as 50,000 households, while others reported it as 60,000 households. Cash subsidies have been part of the Iranian economy since December 2009, coinciding with the implementation of the 'Targeted Subsidy' law. According to the 'Targeting' law, the prices of sixteen goods and services, including gasoline, diesel, gas, oil, electricity, water, wheat, sugar, rice, oil, and milk, were supposed to reach international price levels over five years through the removal of government subsidies. During the first phase of cash subsidy payments to households, the government of Mahmoud Ahmadinejad deposited 45,500 tomans to compensate for each person's purchasing power. The dollar value of cash subsidies in 2009 was nearly $43, which has now decreased to $6 to $8.