SARA Aid Eases Financial Strain On B40 Ahead Of Festive Spending

However, for B40 households who live hand to mouth and support large families, the SARA (‘Sumbangan Asas Rahmah’ or Rahmah Basic Contribution) assistance is akin to receiving an angpau or duit Raya with the Chinese New Year and Hari Raya Aidilfitri celebrations approaching in February and March, respectively.

Alongside other forms of assistance such as e-Kasih, Rahmah Cash Contribution (STR) and Early Schooling Aid (BAP), the additional contribution helps ease their financial burden in preparing for the festive period.

For housewife Chong Khai Ling, 42, from Jalan Klang Lama here, the SARA RM100 aid may not be much, but it is sufficient for her family to purchase necessities such as rice, cleaning supplies, cooking oil and other essentials for their Chinese New Year celebration.

“Besides supporting two children who are still in primary school, I also have to care for my mother-in-law, who is in poor health. So, any form of assistance during the first two months of the year is a relief.

“Thankfully, my children’s school-related expenses are covered by BAP, and we also received RM500 under the first phase of STR. The money helps ease our burden as we prepare for the Chinese New Year,” she told Bernama.

Mohd Farhan Aziz, 23, from Bangi, Selangor, and a final-year student at a private higher education institution, hopes that the SARA payment system at participating premises will be upgraded.

“Several outlets I frequented (earlier) often experienced technical issues, causing customers to wait for long periods or forcing staff to temporarily close the SARA or MyKasih counters.

“It is a good initiative to ease the burden on everyone, but during the festive season, I worry that such technical problems may recur, especially as more people are expected to spend in preparation for Ramadan,” he said.

In the first round of the government’s one-off SARA RM100 aid for all Malaysians aged 18 and above, the amount was available for spending from Aug 31 to Dec 31, 2025. Under the scheme, recipients were able to purchase basic necessities from approved product categories at selected stores and supermarkets nationwide using their MyKad.

The second round of the aid scheme will take effect on Feb 9, with the government yet to announce its expiry date.

 

Commenting on the upcoming RM100 aid, Federation of Malaysian Consumers Associations (FOMCA) chief executive officer Dr T. Saravanan said it comes at a crucial period when household spending usually rises, offering some support to consumers facing persistent cost-of-living pressures.

“At a time when prices of food and daily necessities continue to increase, this assistance helps ease part of the financial burden, especially during festive seasons,” he told Bernama recently.

However, he added, the amount (RM100) remains limited when measured against current cost-of-living realities, particularly with festive-related price increases. 

Saravanan said the assistance functions largely as short-term relief and may not be sufficient to meet the needs of average households, especially larger families and those living in urban areas.

He said FOMCA has also urged the government to review the scope and practical use of the SARA assistance to better reflect actual household spending patterns.

“A significant portion of daily and festive food expenditure involves fresh items such as meat, fish, chicken and vegetables, which are commonly purchased at wet markets. 

“So, the SARA aid must be allowed to be used at wet markets and (at outlets run by) small traders… it would make the aid more inclusive and practical,” he said. 

Saravanan also stressed the need for continuous price monitoring and enforcement to prevent unreasonable price hikes that could erode the real value of cash-based assistance.

“Without effective price controls, the intended benefits of SARA could be quickly undermined,” he said.

 

Universiti Putra Malaysia Faculty of Human Ecology senior lecturer Dr Mohd Amim Othman said universal cash-based assistance such as SARA offers clear advantages, notably administrative efficiency and rapid disbursement, making it relevant amid rising living costs.

“By extending eligibility regardless of income level, the risk of excluding those in need is minimised, especially during periods of economic pressure,” he told Bernama.

However, he noted that from the perspective of fiscal efficiency and policy precision, a fully universal model may dilute the redistributive impact of government aid.

“When assistance is distributed equally across all income groups, a portion inevitably goes to T20 households who do not face immediate financial constraints and this reduces the effectiveness of public spending in easing hardship among vulnerable groups,” he said.

Mohd Amim suggested that the government reassess the inclusion of high-income recipients, particularly now that the first round of the SARA RM100 assistance has been disbursed.

“The initial rollout provided valuable feedback and public response, so now is the appropriate moment to evaluate whether the RM100 remains suitable in both scale and targeting,” he said. 

He added that maintaining the same overall funding envelope while refining the targeting mechanism could allow for more meaningful support to those most in need.

“Redirecting resources away from less vulnerable households would enable assistance for B40 and lower-income groups to be increased to at least RM150, which would offer more substantial relief,” he said.

 

Meanwhile, Monash University Malaysia senior economics lecturer Dr Audrey Siah Kim Lan said the SARA RM100 aid was originally introduced to ease the burden posed by rising living costs. 

She said, however, this year’s disbursement, which comes ahead of Chinese New Year and Hari Raya Aidilfitri, may inadvertently shift the focus of the aid. 

“Festive seasons tend to bring additional and often extraordinary expenses, such as for elaborate decorations and fancy wrappings, and these are more likely to be covered by the recipients themselves,” she said.

She also acknowledged that while the aid seems small, it remains significant for households, especially those in the B40 group, as it helps them cover the basic necessities, albeit temporarily.

Siah said economic research has shown that lower-income households tend to spend a higher proportion of their income on consumption, compared to higher-income groups.

“Lower-income households, such as B40, are more likely to experience difficulty in financing their household necessities than higher-income households (T20),” she said.

She pointed out that targeted assistance, such as eKasih, Bantuan Sara Hidup (BSH) and STR, is more effective because it allocates cash to households that need it most and “who would tend to use the money right away for necessities like groceries”.

She added that targeted assistance also makes it possible to provide more funds to fewer recipients, offering more significant short-term support to B40 families and households facing financial hardship.

 

Monash University Malaysia School of Business senior lecturer Dr Andrew Woon said the cash injection from the distribution of the SARA aid is expected to stimulate consumption, particularly in the retail sector, contributing to broader economic activity.

He said the increased foot traffic and transactions could support local traders and contribute to a more vibrant domestic economy during a key spending period.

“Overall, while the assistance may not fully counteract inflationary pressures or deliver long-term structural economic improvements, it offers immediate relief for households and generates positive short-run spillover effects that help maintain economic momentum. 

“While the amount may be small at an individual level, households with multiple adult members may experience a more substantial cumulative benefit, and this helps alleviate additional festive-season expenses, particularly for food and household necessities,” he said.

To ensure smoother implementation of the SARA aid and wider benefits, Woon suggested broadening the range of participating merchant partners.

Adding more retail categories, including small businesses, could help distribute crowds more evenly, reduce congestion and ensure that the economic benefits reach a wider segment of the retail ecosystem, he added.