The government is looking at a new mechanism to maximise the impact of the Bantuan Raykat 1Malaysia (BR1M).

It includes a more evenly spread distribution, such as a monthly handout instead of a lump sum payment to recipients, said Finance Ministry Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah.

“This will discourage people from spending the cash handout on non-necessity items,” he added.

Irwan made the remark at a 2015 post-budget dialogue organised by the Malaysian Economic Association and the University of Malaya here today.

A few economists who spoke at the panel discussion said it defeated the purpose if recipients spent BR1M on luxury items.

The government announced in the Budget 2015 last Friday that it would increase the BR1M to RM950 from RM650 previously for households with a total income of RM3,000 and below.

The cash handout will be disbursed at RM300 each in January and May 2015, with the balance RM350 in September.

This marks the first change to the three-year-old scheme with the payment being made in three phases, instead of a lump sum payment as previously.

“We are spreading the handout to three payments to let people wisely control their spending,” Irwan said.

Taxand (M) Sdn Bhd Chairman Dr Veerinderjeet Singh said the government should look at ways to increase the productivity of the people, instead of offering them cash handouts.

He also questioned the sustainability of the handout.