November 27, 2020
Over the objections of the Rohani Administration, the Majlis has approved a third welfare program—this one a payment of $4.60 monthly to the poorest quarter of the population for six months to tide the destitute over the coronavirus epidemic.
The Rohani Administration opposed the program, saying the government was already deeply in the red and could not afford such payments.
The bill passed the Majlis, but was vetoed by the 12-man Council of Guardians for violating the constitutional provision requiring any addition to the budget to pinpoint the source of the funding. The Majlis then amended its bill to order the sale of shares in government-owned corporations in an amount sufficient to cover the new welfare program.
The legislation said the program would cost 585 trillion rials or $2.25 billion dollars at the current open market rate of 260,000 rials to the dollar.
The Council of Guardians approved the revised bill November 18.
The legislation says the 20 million people considered the poorest will receive a monthly payment of 1.2 million rials ($4.60) for the last six months of the current Persian year (September 20-March 20). The next 40 million people up the wealth ladder are to receive half the amount or 600,000 rials ($2.30) monthly for the same six months.
That means about three-fourths of Iran’s population should receive some payment.
One problem is that the Islamic Republic has no way of knowing who are the poorest 20 million people or, for that matter, who the richest 20 million are to exclude them from the payment. This has been a constant problem.
In 2010, the Majlis instituted a welfare system that was to pay a substantial sum to the poorest 10 percent with declining amounts to each block of 10 percent of rising wealth, excluding the wealthiest 30 percent. But the state had no data to place people into each of these deciles. So, it just decided to pay everyone the same amount. It is still doing that. However, the monthly payments of 455,000 rials, which were worth about $44 when the payments began in 2010, are now worth all of $1.75.
Under prodding by the Majlis, the government says it is trying to track down the wealthiest 30 percent and cut them off the welfare rolls. But as of one year ago, it was still making the monthly payments to more than 90 percent of the population. Then, last December, it said it had pruned the welfare rolls down to 60 million of Iran’s 83 million people. But it didn’t say how it had managed to do that overnight after a decade of failure, prompting doubts.
That 2010 program was the first state welfare program. The new one is the third. In between, the Majlis approved another program meant as compensation for tripling the price of gasoline in November 2019, a price hike that prompted protests all over the country.
The government says it is paying 324 trillion rials a year to 60 million people under that program. But the Financial Tribune says, “Many families claim they have not received this allowance.”