Complaints Delay Expansion of Cashless Welfare in Malaysia
Malaysia’s Ministry of Women, Family and Community Development has delayed the planned expansion of a cashless system for social welfare. Concerns have been raised around usability and restrictions of recipients’ spending that will now be assessed before further decisions are made.
The system—called JKMPay—saw recipients receive 50 percent of their money paid into their bank accounts and 50 percent stored on a payment card the ministry claims ‘allows recipients to purchase essentials, including medication, at 250 registered shops.’
Minister Datuk Seri Rina Harun explained the cashless payments are intended to regulate people’s spending and ensure they do not purchase items such as alcohol or cigarettes.
JKMPay has been trialled since last year in districts across Kedah, Melaka and Perlis. It later expanded to Kelantan, Selangor and Terengganu, ultimately including around 5,000 participants, representing just under one percent of the total number of people receiving these welfare payments.
The Malay Mail reports criticism of the system has focused on the limitations it places on recipients’ ability to purchase the items they want from the shops they choose, since it only allows them to buy from designated retailers. Concerns have also been raised that people would be left ‘cash strapped’ in the event of an emergency, which could compromise their ability to meet their essential needs.
Cash assistance is a standard means of support employed by humanitarian aid providers, valued thanks to its flexibility, wide acceptance and support of local economies. The amount distributed more than doubled worldwide from $2.8 billion in 2016 to $6.3 billion in 2020, with agencies increasing it still further since the onset of the pandemic. The benefits of cash handouts specifically for tackling youth homelessness are also being explored in New York.
The Ministry’s Deputy Head of Strategy, Rosmahwati Ishak, explained the postponement of the planned expansion of JKMPay will allow time for further studies to be undertaken to assess how best to deliver welfare money going forward.