Budget 2027 cash aid: SARA, wages and tax relief explained

Budget 2027 cash aid will reach most Malaysian households in some form. Prime Minister Anwar Ibrahim tabled the Budget on Friday, 9 October. He raised the combined STR and SARA allocation to RM16 billion, up from RM15 billion.

First, the headline measures are simple. Up to nine million STR recipients get SARA of up to RM150 a month. Also, up to 13 million other adults get RM100, twice. Parents get RM200 for each schoolchild. Civil servants get RM1,500 and retirees RM750. The minimum wage rises to RM2,000, and some taxpayers save up to RM1,600.

Not everyone qualifies for everything, so do not add the figures together. So here is what each group gets, in order from direct cash to tax. We use the Budget speech text throughout.

SARA and cash for households

The government will extend SARA of up to RM150 a month to all STR recipients. As a result, that adds up to RM1,800 a year. The speech says up to nine million Malaysians will benefit.

Adults aged 18 and above who are not STR recipients get SARA Madani. This is RM100, paid on two occasions. The speech says payments come ahead of Aidilfitri and in conjunction with the 70th National Day.

That means a non-STR adult receives RM200 in total. The speech says up to 13 million Malaysians will benefit, including those in the M40 income group. However, it does not give the exact payment dates.

SARA will also work at more places. It will cover fresh produce and perishable goods at 216 FAMA farmers’ markets and tamu nationwide. In addition, the government will widen participation to 10,000 small grocery shops by the end of this year.

Budget 2027: Higher wages for workers

The minimum wage will rise from RM1,700 to RM2,000 from June 2027. The speech says more than four million workers will benefit. However, MSMEs with annual sales below RM50 million are exempt.

By our arithmetic, that gives RM300 more a month for a covered worker. From June to December 2027, the extra pay would come to about RM2,100. A full year would come to RM3,600.

Next, the government plans a RM2,500 monthly minimum wage for semi-skilled workers and graduates. Meanwhile, GLICs and GLCs will raise their living wage benchmark from RM3,100 to RM3,400. The speech says 230,000 workers will benefit.

Gig workers also get support, on top of the household payments. A RM160 million package, shared with Grab, should lift median net monthly income by up to RM227 for e-hailing drivers. P-hailing riders can expect up to RM100 more. In addition, matching incentives of up to RM600 a year for EPF contributions will apply.

School costs, civil servants and pensioners

Early Schooling Aid (BAP) rises from RM150 to RM200 per pupil. A family with four children gets RM800 for the 2027 school session. The speech says 5.3 million pupils are eligible, with RM1 billion allocated. Schools will hand out the aid so parents can meet teachers.

Form Six students get a living allowance of RM2,500, as the PM previously announced. The speech says it matches the matriculation allowance and benefits 90,000 students. Public higher education students also get more for flights. The FlySiswa Madani ticket aid rises from RM400 to RM500.

Civil servants get RM1,500 in special financial assistance. That covers 1.3 million officers at Premier Grade B and below, including contract appointees. Meanwhile, more than one million government retirees get RM750. The minimum pension also rises from RM1,000 to RM1,350 a month, benefiting nearly 59,000 pensioners. By our arithmetic, that is RM4,200 more a year.

However, the speech announced no across-the-board civil service pay rise. It also did not give payment dates for the RM1,500 and RM750. Separately, senior citizen assistance rises to RM1.3 billion for nearly 200,000 people. Bedridden PWDs and chronically ill patients get RM600 a month, up from RM500.

Budget 2027: Tax relief for the middle class

Last, the tax side of budget 2027 cash aid matters for the middle class. Anwar said the changes will give about five million taxpayers up to RM1,600 in extra disposable income. The individual tax relief limit rises from RM9,000 to RM12,000. The speech says it has not been reviewed since 2010.

Besides this, two rates fall by one percentage point. For chargeable income of RM70,001 to RM100,000, the rate drops to 18 per cent. For RM100,001 to RM150,000, it drops to 24 per cent.

By our rough arithmetic, someone with RM100,000 in chargeable income saves about RM840. At RM150,000, the saving is about RM1,520. Meanwhile, people below RM70,000 miss the rate cuts but may gain from the higher relief.

The speech does not give a start date or the old rates. Therefore, treat the changes as announced, not yet in force. Meanwhile, keep receipts for medical, education and lifestyle spending until the details come out.