KUALA LUMPUR: With mouths to feed, medicines to purchase and a monthly salary that can only stretch so far, luxury items such as smartphones are the last thing on the shopping list of strapped, low-income recipients of the 1Malaysia People’s Aid (BR1M) cash aid.

Hence, Putrajaya’s plans to adopt a cashless system to prevent misuse and restrict BR1M purchases to essential goods came as a rude and unwelcome surprise to most BR1M recipients polled by The Malaysian Insider.

“The government is treating the rakyat like children, as if we cannot be trusted with money,” taxi driver M Manickam, 56, said.

Manickam, from Kajang in Selangor, said as adults, they know how to control their spending and what to do with the handouts, without the government having to devise schemes to restrict their purchases.

At present, BR1M, which is to help households earning below RM4,000 a month, is given out in the form of cash and deposited directly into recipients’ bank accounts.

Putrajaya is mulling adopting the American food-stamp system, whereby cash vouchers are issued to deserving individuals to buy groceries, so as to maximise BR1M’s efficacy.

But such a system would put an end to 63-year-old Tengku Nazzat Tengku Abdullah’s purchase of medicine and her freedom to continue driving.

“When I receive my BR1M, I use it to pay for my driving licence and road tax,” Tengku Nazzat, a BR1M recipient of two years, told The Malaysian Insider.

“I also suffer from diabetes. BR1M is the only chance I get to buy better medicine from the pharmacy, on top of the medicine I receive from the government hospital.”

Last Monday, Finance Ministry secretary-general Tan Sri Mohd Irwan Serigar Abdullah said BR1M would be restructured so that from 2016, low-income families could only buy essential goods.

He said the change in BR1M was necessary to prevent it being misused to buy luxury items like cigarettes.

However, Doris James, 52, from Kuching, Sarawak, said she preferred cash and the freedom to spend BR1M as she wished.

“Why are they so worried about how we spend BR1M? The amount is not even much. It’s not like the amount is going to last a year.

“It’s so small that it could be spent in a single trip to the supermarket. Yes, gone in the blink of an eye,” said James, who is unemployed.

However, the government appears to take the issue of BR1M abuse seriously.

Deputy Finance Minister Datuk Ahmad Maslan said last Tuesday that BR1M would be paid out in instalments starting in 2015 so that it would not be spent on luxuries like his own new iPhone 6.

Norbait Mohd Suid, 49, who depends on the aid to raise her children, scoffed at the idea of using the government handout to indulge in a mobile phone.

“Even if BR1M was paid in a lump sum instead of three instalments, I would not buy a mobile phone. I have two young children to raise, so there is no money to waste on such luxuries.

Bus ticketing agent Shaari Ghani, 72, from Butterworth, said he needed BR1M cash to pay his bills and for more flexibility.

“I can’t pay my bills with coupons. I can do more with cash. The coupons will likely restrict purchases to only selected stores ... it will inconvenience people, I think,” he said.

Bus driver Ahmad Fuad Abdullah, 41, also expressed reservations that BR1M vouchers may be used only at certain shops, saying this would encourage store owners to mark up prices and rake in profits.

“If the vouchers can be used at certain stores, we won’t have much choice. Usually, items at the supermarket are pricier, so shoppers have little purchasing power,” said Fuad, who lives in Bandar Baru Puchong in Selangor.

However, lorry driver S Rubeswaran, 26, said the idea was acceptable to him because BR1M recipients could still buy their household needs with the vouchers.

“[However] I think many people will not like this cashless idea. Maybe it is easier for a single guy like me to accept. I don’t smoke or drink so I don’t need money for such things,” he said.

The two-time BR1M recipient agreed that a cashless system would prevent the money from being misused by recipients, adding that many regarded the cash handouts like a bonus.

“They will use it as they like. I know of people who use the money for “jalan-jalan” (go out and have fun) or to go on outstation trips, which I don’t think is right.”

Under Budget 2015, BR1M was raised by RM300 to RM950 for households earning RM3,000 and below, and to RM750 for households earning between RM3,000 and RM4,000. Single individuals aged 21 and above who earn below RM2,000 get RM350.

The Federation of Malaysian Consumer Associations (Fomca) said food stamps are widely used in various countries to support the poor and to ensure that the money is spent on food.

Its chief executive officer Datuk Paul Selvaraj, however, said the main issue is that BR1M is only of limited assistance. It does not cover other essential needs nor would it help end poverty.

“What is needed is a comprehensive social safety net that encompasses the needs of the marginalised and poor — thus including not only food but also public transport, healthcare, children’s education, housing and even assistance in employment to enable people to break out of poverty,” he said.

Pakatan Rakyat think tank Institut Rakyat said the government’s proposal to switch to a cashless system still does not address the issue of eradicating poverty.

“This step would only perpetuate the structural obstacles that prevent someone from ‘graduating’ from poverty and creates a dependence on government aid,” said its assistant research director Ginie Lim. — The Malaysian Insider

This article first appeared in The Edge Financial Daily, on October 21, 2014.