Abstract

This article investigates the reason of rising cost of living by examining two main factors
include the slow growth in income relative to inflation and unbalanced increase in standard of
living relative to income. Firstly, a time series regression model was built using data from the
Household Income Survey report (different years) to compare year-on-year income
fluctuations to inflation rates. Secondly, we examined the household’s expenditure elasticity
of income. The three primary categories of commodities that households purchase included
foods, housing and transportation. To examine variations in elasticity regard to those factors,
we looked at elasticities across income strata (B40, M40, T20) and location comparison
between rural and urban. However, the standard of living is increasing at a comparatively
rapid rate as indicated by strong expenditure elasticities for several categories of products for
B40 groups and M40 groups. This shows that the standard of living or living standard styles
are most important element contributing to the rising cost of living issues. The rising cost of
living remains the major cause of concern for a sizable portion of the population.
 1.0 INTRODUCTION

The cost of living can be determined as typical cost for dairy necessities. It is the amount of
money required to manage a specific level of living including fundamental costs like housing,
foods, transportation and medicinal services. the term “Cost of living” is frequently used to
compare how costly it is with live in one city against another district. Cost of living in
Malaysia is relatively cheap contrasted with neighbouring nations such as Singapore and
Indonesia. On the other hand, the differences of cost of living through years shows drastically
increment. At the same time, many peoples have received an increase in salary to adapt to the
rising living costs in Malaysia.

The problem of rising cost of living is a global concerned faced by many countries. In fact,
many countries such as United State, Japan and Singapore have faced the issue of increasing
cost of living in their countries. Example, the United State faced the issue of strong
purchasing power disparities between cities. Although the city of New York is the city with
the highest incomes in the United State, the costs of their products is among the highest in the
United State. This research has explain that the rises in the price of products are greater than
the increase in salaries of local employees. Moreover, based on the 2017 Worldwide Cost of
Living Survey, Singapore is a city that has the highest cost of living in the world.

Malaysia also faced the issue of rising cost of living. Based on the Worldwide Cost of Living
Survey 2017. The problem of increasing cost of living in Malaysia is a recurring concern that
has plagued the country for a long time. Based on Indeks Harga Pengguna (IHP) issue by the
Malaysian Armed Forces Office, the pricing of products and services in general have rose by
29% in 10year period between 2010 and 2020. The Malaysian government’s effort to lead the
country towards to high-income nation by 2020, the problem of the increasing cost of living
has become one of the major challenges.
The Performance of Economic Malaysia in 2020

1.0 Malaysia Economy Performance 2019

1.1 First Quarter 2019 (Q1)

The economy slowed in the first quarter of this year, expanding 4.5 percent in
annual terms compared to the same period last year. This was down from the
fourth quarter's 4.7 percent year-on-year growth, but it was still higher than
market estimates of a 4.3 percent increase. In comparison to the previous quarter,
the GDP grew by 1.1 percent in Q1, somewhat less than the 1.3 percent growth
registered in Q4.
A weaker foreign sector, which presumably had a spillover impact on local
consumption, contributed to the first-quarter yearly decline. In Q1, net exports
generated 0.9 percentage points to GDP growth, down from 1.0 percentage point
in Q4. Gross domestic product (GDP decreased 1.4 percent (Q4: +1.8 percent year
on year), while exports increased just 0.1 percent, down from 3.1 percent in the
previous quarter.
Domestic gross fixed capital formation decreased considerably (-3.5 percent
year on year in Q1; -0.6 percent year on year in Q4) due to a severe contraction in
public investment. Although private consumption growth slowed somewhat in Q1,
it was still 7.6 percent higher than in the same quarter last year, thanks to strong
pay rises and subdued pricing pressures. In comparison, government spending
increased by 6.3 percent.
 Looking to the future, economic growth is projected to pick up in the next
quarters, while total growth in 2019 is expected to slow somewhat compared to
2018. This is due in part to lower private and public demand as the government is
attempting to reduce the budget deficit, which will likely impact on domestic
production. Furthermore, global trade conflicts threaten the outlook for the global
economy.
1.2 Second Quarter 2019 (Q2)
The economy increased 4.9% in the second quarter year after year, up from 4.5%
acceleration in the first quarter, and above estimates of market growth of 4.8% in
the first quarter. Meanwhile, in Q2 the economy grew by 1.0% on a quarterly
basis somewhat lower than the 1.1% growth in Q1.
In addition, net exports provide 1.4 percentage points to growth in Q2, up
from Q1's 0.9% of contribution. This acceleration was mainly driven by a stronger
foreign sector during the second quarter in the same period. Goods and services
imports decreased by 2.1%, while the first quarter increased by 0.1%.
The worsening in the gross fixed capital formation on the domestic side
reduced the reinvigoration of key infrastructure projects in the second quarter (Q2:
0.6 percent; Q1: -3.5 percent). Meanwhile, private consumption growth in Q2,
grows by 7.8% per year (Q1: +7.6%), backed by strong pay rises and strong credit
expansion in the private sector. The government's consolidated efforts to promote
public finances may have reduced the public spending, which increased by 0.3%
(Q1: + 6.3%).
For the future, economic growth in the second half of the year is anticipated to
decrease slightly, mainly because of weaker domestic demand. Private
consumption is anticipated to decline as pricing pressures rise and consumers'
procurement power drain on lower ringgit, while government deficit reduction
efforts are likely to reduce public spending. The prospects for the outside industry
is likewise at considerable danger from global trade conflicts.
1.3 Third Quarter 2019 (Q3)
In the third quarter the economy deteriorated and declined as fixed and export
investments dropped. Over the third quarter, economic growth grew 4.4% year-
on-year, which matched the market estimates, but decreased from strong growth
of 4.9 percent in the second quarter and was the lowest in the economy since Q2
2016. Annualized rate quarter-on-quarter, GDP growth fell to 0.9% in Q3,
 compared to 1.0% in Q2.
The slow-down in the third quarter has been the result of the most sharply
decreased record fixed investment (Q3: -3.7% year-on-Year; Q2: -0.6%), in the
midst of continuous trade and decline in building activities. The decrease was due
to declining infrastructure, machinery and equipment investments. In addition,
private consumption rose from 7.8% in the third quarter to 7.0%, although
remaining the primary growth drivers, the high basis effect of tax changes last
year and lower salaries in the industrial sector were anticipated to decelerate.
Public expenditure, by contrast, was accelerated in Q3 (Q3: +1.0%; Q2: +0.3%),
but remained moderate as the government continued to consolidate its budgetary
activities.
Exports of goods and services decreased 1.4% in Q3, externally (Q2: +0.1%).
This was primarily due to a decline in commodity exports as demand for
electronics is still subdued as a result of the Chinese battle in the US and the world
technological down cycle, with a decrease in demand for commodities. Imported
goods and services decreased by 3.3% in the third quarter, compared with a 2.1%
contraction in the second quarter. The net trade contribution was therefore 1,0
percentage points below the 1.4 percentage point gain in Q2 and was therefore a
result of Q3 growth.
Gdp growth is expected to continue cooling in 2020 as a sustained downturn
spreads to slower rent activity and smoother economic activity in export-oriented
industries. That so, the comeback in fixed investment and the slightly easier
budgetary attitude of the government should assist to boost domestic demand.
International trade tensions and China's downturn offer adverse risks for the
exterior sector's prospects.
1.4 Fourth Quarter 2019 (Q4)
In the last quarter of 2019, the economy lost substantial momentum. In the fourth
quarter the GDP increased annually by 3.6%, down from Q3's 4.4% growth,
marking the lowest result since the 2009 international economic meltdown. In
addition, market forecasts for a downturn to 4.2% have been significantly
underestimated. Seasonally adjusted in quarter-to-quarter terms, GDP growth in
the fourth half decreased from 0.9% in the third half to 0.6%. In 2019 economic
growth, which was also the poorest performing in 10 years, dropped to 4.3 percent
compared to 4.7 percent for 2018.
 The fourth quarter saw the further decline of fragile external requests
dissipated by the Chinese slowdown in the face of continuing trade tensions with
the US. Commodity and service exports have decreased by 3.1% year-on-year
(Q3: -1.4%), due mainly to decreasing electrical and electronic goods shipments
and liquefied natural gas. The decline in goods and services imports was slowed in
Q4, in return (Q4: -2.3 percent; Q3: -3.3 percent). Net trade therefore trimmed 0.7
percentage points of Q4 growth, complementing the contribution of 1.0
percentage points in Q3.
In the last quarter of last year, the domestic economy fared better, but
remained poor by global standards. Private consumption grew by 7.0% in Q3 to
8.1%, and remained a major economic driver in Q4. Government expenditures are
also gathering speed (Q4: +1.3%; Q3: +1.0%) but are being controlled as a result
of the government's budget reduction plan. Meanwhile, after contracting in Q3 at
the highest record rate (Q4: -0,7 percent; Q3: -3,7 percent), there was a little dip in
fixed investment due to the recovery of construction projects and the slight fall in
investments in industrial machinery.
In this year, the economy is expected to remain sluggish, as a continuing
downturn in export-oriented areas enters the labor market, therefore restricting
household expenditure. On the contrary, exports are expected to marginally
recover in 2020, while fixed investment recovery is predicted to fuel growth. That
so, the latest epidemic of coronavirus and the ensuing trailing of China's economy
and global supply networks might aggravate fragile foreign demand. Furthermore,
the epidemic may impede tourism and might impact Malaysia's commodities
exports on dropping global crude oil prices. The prevalence and the duration of
the virus in China is still mostly unclear

The tables will show the Gross of Domestic Product in Malaysia

(%) Change from corresponding quarter of preceding year
 2018 2019 Q3 2018 Q4 2018 Q1,2019 Q2,2019 Q3,2019 Q4,2019
GDP 4.70 4.30 4.40 4.70 4.50 4.90 4.40 3.60
(%) Change from preceding quarter
Seasonally 1.50 1.30 1.10 1.00 0.90 0.66
Adjusted GDP
Sources: (https://www.dosm.gov.my/v1/index.php?
r=column/pdfPrev&id=WWk2MDA3R1k1SlVsTjlzU3FZcjVlUT09)

Sources:(https://www.dosm.gov.my/v1/index.php?

r=column/cthemeByCat&cat=106&bul_id=L1J4SHhRSW95TEM2OXBhbkdiNkNsQT09&
menu_id=bThzTHQxN1ZqMVF6a2I4RkZoNDFkQT09)

Table 2 show about Consumer Price Index by main group in 2018 to 2019.
Table 2: show the average CPI and increase for 2017-2021

Background of the problem and issue of Rising cost of Living

 Rising prices of some essential goods such as foods, housing and medical make it
harder, especially for the lower-income groups (B40) and middle-income populations (M40)
to satisfy demands. Whatever, the inflation rate rises slightly, the reality is that, according to
economists, various households or income groups have various inflation rates. According to
Richard Record, World Bank's leading economist in Malaysia has expressed his concern over
the cost of living in Malaysia. He reportedly said that there is no clearer relationship than the
low rate of consumer price inflation when compared to the rising cost of living. Although
inflation has been low and stable in recent years, he says different households have different
inflation rates.

Recent year, the problem of rising cost of living is frequently discussed on social
media. The increase is due to the issue that is plaguing the world nowadays, namely the
Covid-19 pandemic. The situation has influenced inflation in Malaysia. The cost of living
depends on two conditions namely your income and the market price. With the onset of the
covid pandemic issue 19 most communities lost economic income as a result of movement
control orders by the government. In addition, the consequences of this covid 19 pandemic
have made many people lose their jobs. This situation causes the community to lose income.
This situation has burdened the livelihood of the retrenched community. This will cause the
power of society to diminish.

Next, the cost of livings increases as a result of rising prices of goods not necessarily
the rate of increase in wages and salaries. Beginning on 1 January 2020, the increase in petrol
prices is expected to increase. Because the transportation rely on the petrol to operate and the
transportation fees will increase. The impact on rose the price of petrol will increase the cost
of living and the prices of products.

In addition, this covid 19 pandemic has led to inflation. Inflation is the rate of increase
over a period of time. Inflation is a method of measurement that is widely used to measure
the increase in the price of goods or the increase in the cost of living of a country. Due to this
covid 19 has made increasingly. It has been found that the 2020 consumer price index has
decreased compared to 2019.

Table 1: Consumer Price Index 2020

 Consumer Price Index 2020

2019 2020

Overall 121.5 120.1

Core 119.3 120.6
Without Fuel 112.2 112.6

Source: Annual Consumer Price Index 2020, Department of Statistics, Malaysia

Table 1 shows that overall off consumer price index 2020 was decrease from 121.5 on 2019
to 120.1 on 2020. Consumer Price Index 2020 for core was increase from 119.3 on 2019 to
120.6 on 2020. Next, Consumer Price Index 2020 was increase from 112.2 from 2019 to
112.6 2020. According to Dato Seri Mohd Uzir Mahidin, the influence of the decline in the
total index was driven by the decline in transportation, clothing and furniture.

Table: Inflation rate 2019-2020

Malaysia – Inflation Data

Year 2015s 2016s 2017s 2018s 2019s

Inflation Rate (CPI, annual variation, in%) 2.10 2.10 3.80 1.00 0.70

(Sources: https://www.focus-economics.com/country-indicator/malaysia/inflation)
Consumer Price Index (CPI) decreased 2.9% in May 2020 to 117.9 to 121.4 in the previous
month of the preceding year. The declined in the total index was driven by the decrease of
Transport which is -20.8%, Housing, Water, Electricity, Gas & Other Fuels which is -2.6%,
Clothing & Footwear which is -1.1%. Furnishings, Household Equipment & Routine
Household Maintenance which is -0.2% which contributed 45.7% to overall weight.
 Table 2: Consumer Price Index by Main Group, 2019 and 2020.

Main Group Consumer Price Index by Year

2019 2020
Food and beverages 133.1 (1.7%) 134.8 (1.3%)
Alcoholic beverages and 167.8 (1.5%) 168.3 (0.3%)
tobacco
Clothing and footwear 94.3 (-2.0%) 93.5 (-0.8%)
Housing,water,electricity 121.3 (1.9%) 119.2 (-1.7%)
, gas and other fuels
Furnishing,household 116.4 (1.4%) 116.7 (0.3%)
equipment and routine
household maintenance
Health 122.7 (0.7%) 124.1 (1.1%)
Transport 114.0 (-3.1%) 102.6 (-10.0%)
communication 96.4 (0.4%) 97.5 (1.1%)
Recreation service and 111.8 (0.7%) 112.3 (0.4%)
culture
Education 119.7 (1.4%) 120.9 (1.0%)
Restaurant and Hotels 131.8 (1.2%) 132.4 (0.5%)
Miscellaneous Goods and 113.0 (0.4 %) 116.0 (2.7 %)
Services

(Source: Annual Consumer Price Index 2020, Department of Statistics, Malaysia)

Table 2 show about Consumer Price Index by main group in 2019 to 2020. The COVID-
19 pandemic that occurred in 2020 has indirectly reflected as Malaysia recorded a negative
inflation of 1.2 per cent. Among the most affected groups were Transport (-10.0%), followed
by Housing, Water, Electricity, Gas & Other Fuels (-1.7%) and Clothing & Footwear (-
0.8%). However, Miscellaneous Goods & Services increased 2.7 per cent followed by Food
& Beverages (1.3%) and Communication (1.1%).

Importance of the issue (urgency to solve the issue)

The rise in the cost of living is due to some of factors including the higher cost of
company that are passed on to end consumers according to the chief economist of Bank Islam
Malaysia, Dr Mohd Afzanizam Abdul Rashid. Purchasing of raw materials, wages,
maintenance and other overhead expenditures are all included in this cost. As a result, the
cost of foods which are a major component of the CPI will continue to affect Malaysians of
all income status. For context, Malaysia’s CPI for January 2021 fell 0.2% to 122.1 in a year-
on-year (y.o.y.) comparison from 122.4 in January 2020. The drop was related to decreases in
a variety costs including transportation (-5.1%), utilities (-0.7%), clothes and footwear (-
0.4%) and restaurants and hotels (-0.1%). Both these factors contributed for 44.5% for the
overall CPI. Besides that, Prof. Muhammad Ridhuan Bos Abdullah who from University
Utara Malaysia (UUM) noted that households need to spend more to get the same quantity of
commodities, especially meat and milk products. He also claims that the high cost of imports
is a major factor in the current situation because local manufacturing was unable to fulfil
aggregate demand in Malaysia. After that, Prof. Muhammad Ridhuan believes that the best
short-term solution is for the government to give incentives to important subsectors such as
food and beverages imports and help local producers in increasing output.

Richard Recoed, the World Bank’s senior economist in Malaysia has highlighted his
concern over the cost of living in Malaysia. He mentioned that those with lower earnings
spend a large portion of their households budget on food and higher rate of inflation when
food prices rise faster than other products. However, based on Socio-Economic Research
Centre executive director Lee Heng Guie mentioned that the costs of living pressure is
expected to remain in 2020. The National Action Council on Cost of Living (NACCOL) must
develop short-to-medium-term action plans to reduce the burden of rising living costs in areas
such as food, necessities, transportation, healthcare, housing and education. He also explained
costs of living is determined by 2 factors that are pricing and income.

Purpose Solution to Overcome the Rising Cost of Living in Malaysia

1. Change the way of life

 Life must be improved as a result for today conditions which have increased the
expense of living and luxury life. As a result, each person or family institutions
need to change their expenditure habits way than before. However, change
lifestyle require self-discipline high to change the level of shopping in accordance
with the ability and needs of life. Example, if the family prefer takeaway from
outside restaurant, they must change to reduce the habits with cooking in the
home. Cooking at home is more cost-effective and cost saving than dining at
outside restaurant. Cooking at home also have benefits include hygiene, healthy
and save time. However, for saving the money, they should often cook at home.

2. Find a Part-Time Job

Part time job can help the individuals raise the income and salary. Furthermore,
the ability of modern technology available nowadays allow us to find the job
easily through the website. The advanced of technology is convenient for used by
those who want to find the part time job. Example, online part time job and
promoter is a way to increase the earnings to solve the rising cost of living as its
salary are higher. Nowadays, the online shopping such as shoppe and Lazada are
prefer to young people to earn extra income such as sell the foods, clothing and
accessories.

3. Set the Minimum Wage Increase of Workers.

The salary and wages are the primary sources for the household. The rate of
salaries and wages are based on labour market from demand and supply. Salary
and wages balance rate will raise with increase ability or investment in the
economy and technology evolution. Increasing in capital and technology evolution
contributes to increase the productivity, this will increase the salaries and wages.
4. Decreasing in Tax Rates and provide Subsidies
Government implemented policy such as reducing the tax rates to help the people
in cost of living. High tax rates affect the people to feel overloaded to pay their tax
and the high tax rates will increase the price of goods and services. In addition, the
government provided the subsidies to the people will increase their purchasing
power and ability to buy the essential things. This will help the people to decrease
their cost living in their lifestyle.
THE PURPOSE SOLUTION ON RISING COST OF LIVING

Based on the report MalaysiaKini, many Malaysians particularly in city areas believes that
their earnings are insufficient to improve their living standards. The increased cost of living
was mostly due to higher food prices, cost of transportation and housing expenses. As a
result, the government must address the issues of food prices, housing prices and
transportation costs for solving the concerns of stagnant incomes and increasing costs of
living. Food prices, unaffordable housing, inadequate public transportation, expensive
healthcare and the expense of raising kids are five components of the cost of living for
consumers.

Food is the most essential of households and will be affect by high food prices as a greater
income is spent on their basic foods. In Malaysia, the price of foods higher because Malaysia
has a poor food production rate as less than 12% of agricultural land is for food production.
The result in Malaysian mostly depend on imported products, when food is imported, global
factors such as monopolistic practises and climate change impact on food producing countries
will have a significant affect the prices of food and increase the prices of food in Malaysia. in
addition, based on report by Malaysia Competition Commission (MyCC) believes that food
supply chain distortions and manipulations are a main factors of rising food prices. Multiple
actors of the market’s excessive food costs were identified by the MyCC in their research
include market manipulation by middleman, numerous intermediates and manipulations of
approved licences are impact on unjustified rising in food expenses. Thus, the government
implemented The Price Control and Anti-Profiteering Act of 2011 and the Competition Act
of 2010 for against price manipulators. These legislations are effective methods for detecting
price manipulation and profiteering and taking strict punishments against the manipulators
and profiteers. The government also place a higher focus on food production to allow the
consumer to reduce imported food and become more self-sufficient in important agricultural
sectors.

Based on Khazanah Research Institute and Bank Negara, the indication of a well-functioning
affordable housing market is when the median prices for the overall housing market is three
times the gross yearly household income. Thus, the government place the first priority in
helping homeownership to develop affordable homes and controlling the private sector to
develop affordable home and the price of housing. Fomca fully opposes the policy by the
previous government to approve foreigner investors to buy properties for more than
RM600,000. The policy would likely to encourage private developers to caters substantially
for the foreign markets, thus depriving Malaysians of their access to affordable housing. The
government also encourage the people to rent the house who unable to afford the homes until
they have the financial capacity to buy their own house.

Due to the poor and inefficient public transportation, peoples are frequently forced to drive
their vehicles daily. Households are predicted to spend between 20 and 30% of their income
on personal transportation including petrol, maintenance services, tolls, parking fees and
insurances. FOMCA is requesting the Ministry of Transportation to conduct an audit of the
present bus system. A feasibility study cam be conducted to ensure that a complete bus
system serving all main residential region. The authorities must assure the bus services follow
to consistent timetables so that the peoples can depend on it to go to workolace or attended
important events. The public transport system should be well-connected so that peoples have
the least amount of inconvenience while travelling from one location to another. The
government could ensure that the peoples minimize their reliance on private vehicles by
constructing an efficient and effective public transportation infrastructure, therefore raising
their income. The advantages of a effective public transportation services include reduced
traffic jam, parking congestion and pollution emission.
 Objective

The objective of our study is to identify the causes or reasons for the increase in the cost of
living in Malaysia in 2020. With this we will make an analysis of the reasons for the increase
in the cost of living and make an analysis related to how much difference in consumer price
index each year. Throughout this research we study, we are known the Consumer Price Index
have rose from 2016 to 2019 by 1.8% while the median family income increased by 3.9%
based on Economic Outlook 2021 report released by the Financial Ministry. However, the
objective for this study have to identify whether changes in income outweighed changes in
general prices levels and to analyze the effect of increased income in spending habits.

The increasing cost of living in Malaysia is influenced by some variables. First,

unequal salaries raise have resulted in a rise in the cost of living for workers today. In the
city, salaries have become low due to the high inflation. Increased prices of commodities
have reduced the necessities of the people in some regions. It forces the underprivileged or
poor people to work harder to support themselves and their families.

Next, we will also identify the impact of the rising cost of living on Malaysians. The
increased in the cost of living has an impact that varies according to the level of household
income. Bank Negara Malaysia’ Annual Report (2015) states that the cost of livings problem
is related to rising cost of living and individuals spending attitude.

In addition, we will also identify what steps need to be taken to address the problem and
what actions the government will take to help the people due to the rising cost of living. Next,
we can find out what are the steps taken by the government in helping the people for the cost
of living due to the covid pandemic 19.
BANTUAN SARA HIDUP (BSH 2020)

Bantuan Sara Hidup (BSH) 2020, formerly known as replacement for Bantuan Rakyat 1
Malaysia (BR1M) is a monthly living wage assistance program for low-income and
vulnerable households. This financial assistance program which introduced in 2012, is aimed
for helping lower income households and individuals to assist them cope with the rising cost
of living. Initially, the initiatives was introduced as a form of targeted-subsidy to assist
beneficiaries decrease the burden of GST.

Location

Malaysia is a nation that contain different kind and races of people. As all people have
different amount of income for each family, this have made them been categorized to
different level which is B40(Below 40), M40(Middle 40) and T20 (Top 20). This
clearly have the presence of disparity between each of the level especially for the
family from B40. As for this, Malaysia government have come out with a few
solutions to reduce the pressure of those family, one of it is Bantuan Sara
Hidup(BSH). BSH is a kind of help from the phase of monetary which the
government will lend help to those who to fulfil the requirement needed in certain
group of people. As for this situation not all Malaysia family get this support from the
government. As for these, the government have set a few requirements to the public
during the registration for this support.

Category I. Households - Married couple

General Eligibility Criteria

A. The Applicant

 Malaysian residents or local citizens.

 Stay in Malaysia.
 Income monthly: income of household income below than RM4,000
per month.

B. The Applicant’s Spouse

  Spouse of applicant a Malaysian population and local citizen.
 For non-Malaysia spouse must be residents and holder of
MyPR/MyKAS.

C. The Applicant’s Child/Children

 Children of applicant with a international spouse must hold

MyKid/MyKad.
 Biological children registered with Jabatan Pendaftaran Negara.
 Adopted child/children registered with Jabatan Pendaftaran Negara.
 Must be Malaysian residents or local citizen.
 Under 17 years of age.

o No work and without any income.

 Under 18 years of age.

o Full-time student studying at public/private institution of higher

learning.

Category II. Individuals

General Eligibility Criteria

A. The Applicant - Single

 Malaysian residents or local citizen.

 Stay in Malaysia.
 Monthly individual income below than RM2,000.
 Aged between 40 to 59.

B. The Applicant – Orang Kurang Berupaya (OKU)

 Malaysian resident or local citizens.

 Stay in Malaysia.
  Monthly household income below than RM2,000.
 Aged between 18 to 59.

Category III. NOT Eligible to Apply for BSH 2020

A. The Applicant

 Non-resident Malaysian residents and foreign people.

 Income group: Monthly household income below than RM4,000.
 Working foreign countries.

B. Marital Status, Spouse and Children

 Single and under 40 years of age or above 59 years of aged.

 Spouse of the applicant is not a Malaysian citizen.
Income group Financial Aid Essential a year
Household income < RM2,000 RM1,000
Household income RM2,001 - RM3,000 RM750
Household income RM3,001 to RM4,000 RM500
Unemployed children < 17 years of age of beneficiary RM120
(per child; 4 children above per household)
Single individual 40 to 59 years old; income, RM2,000 RM300
People with Disabilities (OKU) between 18 to 59 years RM300
old; income < RM2,000
Single senior citizen aged 60 years and above To be verified

Who will received payment?

Payment will be approved household who applied and was approved in 2019. It has
predicted that 3.8 million individuals will received RM300 each for this initial instalment of
the BSH 2020.

- Objective

Bantuan Sara Hidup Rakyat (BSH) 2020 replaced Bantuan Rakyat 1Malaysia
 (BR1M), is a monthly living wage assistance scheme for lower income and vulnerable
community income who below than RM4,000.

This financial assistant programme, which was launched in 2012, is designed

to assist lower income households and people in dealing with the growing cost of
living. Initially, this project was established as a type of targeted subsidy to assist
beneficiaries in reducing their GST burden.

The government had renamed and fine-tuned the financial aid plan to benefit
only those income who below than RM4,000 per month. Furthermore to the yearly
living wage provided to family heads, BSH 2020 offers financial assistance to each
kid from these low-income households.

- Implementation
The first phase payout for 3.8 million Malaysian families qualifying for the Bantuan
Sara Hidup (BSH) 2020 scheme is set for 20 January 2020. Each qualifying
household would get RM300, amounting to a total allocation of RM1 billion.
According to vice Finance Minister Lim Guan Eng, the payment would be
deposited straight to the beneficiaries' bank accounts using information from the BSH
2019 database. Recipients living in rural regions who do not have a bank account, on
the other hand, will get a cash payment beginning on February 1, 2020.

This round's distribution includes Malaysian residents earning less than

RM2,000, between RM2,001 and RM3,000, and between RM3,001 and RM4,000.
During the tabling of Budget 2020, the authorities also increased the scope of the
BSH 2020 program to include single individuals aged 40 and over, as well as all
handicapped persons aged 18 and above with a monthly salary of less than RM2,000.
Their monetary support, however, will be provided only during the second wave of
payments.
Guan Eng also stated in the announcement that new candidates who want to
submit or amend their information can do so between 1 February and 15 March 2020.
This includes failed BSH 2019 candidates who meet the BSH 2020 standards, as well
as handicapped applicants who are not classified as e-Bantuan beneficiaries by the
Welfare Department. “Once the BSH database is reviewed, the remainder BSH 2020
distributions in the ‘households' category will be distributed in the second and third
stages, while the ‘single' and ‘disabled' categories will receive a one-time payment in
the second phase,” Guan Eng explained.
In Budget 2020, the authorities chose to continue the execution of the BSH
scheme in order to ease the burden on the people, specifically those in the B40 group.

What Ministry In Charge the Program Bantuan Sara Hidup 2020

Ministry of Finance, Finance Minister Lim Guan Eng had announced the Budget 2020
with the themed “Driving Growth and Equitable Outcomes Toward Shared
Prosperity”. The overall allocation in the Budget 2020 would be RM297 billion which
was increase of RM19.5 billion from the previous year’s RM277.5 billion. This
budget is growth-centric with cleverly designed to maximize the impact on economic
development, job opportunity, and structural transformation while remaining
committed to restore our budget health in the long term. The four thrusts were Driving
Economic Growth in the New Economy and Digital Era ; investing in Malaysians :
Human Capital Development ; developing a United, Inclusive and Equitable Society ;
and Revitalization of Public Institutions and Finances. In addition, he also mentioned
the allocation of government for subsidies and social assistance budget raised from
RM22.3 billion to Rm24.2 billion. This would include social assistance program such
as Bantuan Sara Hidup (BSH) and assistance for agriculture, fuel and interest.
However, the program BSH would be a part of the government’s initiative to help the
lower 40% of the income group (B40), this budget expanded to assist 1.1 million
unmarried individuals aged 40 and above who income below than RM2,000 per
month. Both disabled people aged 18 and above income below than RM2,000 have
covered in the program BSH. They would eligible for RM300 BSH payment and
qualify enrolled in the free MySalam Takaful program.

Ministry Outcome that Aim to be Achieve Program Bantuan Sara Hidup 2020
The “Bantuan Sara Hidup” (Household Living Aid) or known as BSH is a
government assistance program for specific types of recipients. The program is
assisting the lower income group to reduce the rising cost of living. In addition, the
B40 National Protection Program also known as MySalam is a national health
protection scheme that aims to provide free takaful (equivalent to insurance) health
protection to B40 individuals who are also beneficiaries of the Household Living Aid
(BSH) and M40 individuals who earn below RM100,000 per year.
Suggested Budget of Bantuan Sara Hidup

The government’s Cost of Living Aid (BSH) program expanded to cover minimum 1.1
million more Malaysians as part of Budget 2020 based on Financial Minister Lim Guan Eng.
Budget 2020 will include an RM5 billion allocation for BSH cash assistance to eligible
Malaysians according to Guan Eng. BSH will be extended to the 1.1 million Malaysian single
individuals incomes below than RM2,000 per month in 2020. In addition, BSH would cover
all disabled people aged between 18 and above with a monthly income of below than
RM2,000. Both new groups received RM300 in BSH Subsidies. Furthermore, these two
categories have automatically enrolled in the free MySalam Takaful plan which provided
them with the same coverage as other BSH beneficiaries. According to Lim, RM24.2 billion
would allocate for subsidies and social aid in the Budget 2020 increased from RM22.3 billion
in 2019.
Besides that, the MySalam insurance plan has expanded to cover the middle-40 (M40)
income groups with around total number of persons covered by the free public health
insurance program over 8 million peoples. The insurance program covered 4.3 million
Malaysians in the bottom 40 (B40) income population between the ages between 18 and 55.
However, the people who can get RM8,000 one-time payment for B40 patients diagnosed
with any of the critical illnesses covered by the program, MySalam would provide an
RM4,000 one-time payment for M40 patients. Both groups are eligible for a daily payment of
RM50 above for a maximum of RM700 per year as replacement income if they are
hospitalized with any of the critical illness recognized by the program.
EXPECTED OUTCOME OF PROGRAM BANTUAN SARA HIDUP (BSH)
Dr Mahathir Mohammad, the Prime Minister of Malaysia had unveilrd the economic stimulus
plan. Dr Mahathir announced a host of measures included cash aid and incentives to assist the
nation weather the economic disaster caused by Covid-19 pandemic which has influenced
more than 82,000 population globally and claimed more than 2,800 lives.

The following are some of the measures:

1. Taxi services, tourist bus drivers and licence trishaw drivers would get a one-time
payment of RM600.
2. Doctors and medical staff directly involved in containing Covid-19 receive an RM400
special monthly critical allowance
3. The payment of Bantuan Sara Hidup (BSH) from May 2020 would be move
forwarded to March 2020.
4. In May 2020, BSH beneficiaries will receive an additional RM100 to an additional
RM50 in the form of e-wallet.

According to Dr Tun Mahathir, the country’s GDP is predicted to fall between 3.2% and
4.2% as result of the Covid-19 pandemic. He confidences that the economic stimulus plan
allow the Malaysia economy to reach the top of range. In addition, Mahathir has
mentioned that Malaysia’s fiscal deficit is anticipated to rise slightly from its objective of
3.2% of GDP to 3.4% as a result of the economic stimulus.