Blanket distribution of allowances without criteria: Does it make sense?

The Story of Two Women

Consider the lives of Fathuma and Aminath.

After three children, Fathuma’s husband left her for his “true love.” He provides no child support and takes no responsibility. With elderly parents in poor health, limited education, and no means to work, Fathuma supports her family through the government’s single‑parent allowance and the elderly allowance her parents receive. Altogether, the state pays this struggling household MVR 22,000 per month.

Aminath’s story begins similarly: three children, a divorce, and a husband who found “the real one.” But her circumstances are very different. Her ex‑husband pays child support generously and helps whenever needed. As a Male' resident, she receives rent from tenants. Her father runs a successful business, and the family is financially comfortable. Yet Aminath also receives the single‑parent allowance, and her wealthy parents receive the elderly allowance. The state pays this affluent family MVR 22,000 per month as well.

Is this the right approach?

For those who believe equality means giving every Maldivian the same benefits, this may seem fair. But for those who believe state spending should be targeted, this system is deeply flawed. In a country like Singapore, often cited as a model, assistance would go to Fathuma, not Aminath. Singapore’s system is built on need, not uniformity.

Subsidies Without Rhyme or Reason

The Maldives, already struggling under heavy debt, is among the world’s most subsidized‑dependent nations. This trend accelerated after 2008, when direct presidential elections began. While helping citizens is admirable, the lack of targeting has turned subsidies into a financial burden for the state, no matter who runs it.

Subsidies and allowances cover electricity, water, fuel, staple foods, healthcare, education, single parents, and the elderly. Despite rules, these benefits are distributed broadly, to the poor and wealthy alike. This is what strains the state.

The single‑parent allowance, currently capped at MVR 10,000 and soon to be increased to MVR 12,000, is meant for low‑income households. But in practice, many who do not qualify continue to receive it. Some remarry without informing authorities. Some couples divorce in Maldivian courts but live together abroad while still collecting the allowance. Others hide income by transferring it to different accounts.

The issue is not the increase from 10,000 to 12,000 of an allowance, it is the absence of a reliable system to verify eligibility.

The MVR 5,000 elderly allowance works the same way. A millionaire receives it simply for being Maldivian, just as a poor person does. Aasandha is the same. What's more, there are some differences in healthcare packages offered: military and police families enjoy unlimited coverage, while other citizens do not receive the same level of free care. Recommendations to introduce a proper insurance structure have gone nowhere.

Subsidies for rice, sugar, flour, and fuel are also blanketed, even expatriates benefit from them.

Vari allowance aai eki nannamugai faisaa behun: Dhekolhu jehey tha?
Details: https://t.co/q52ZVor2v6#sunonline #sunonline #sunmv #sunreports pic.twitter.com/RelFXQQ0My

— sun.mv (@sunbrk) December 28, 2025

Countries like Singapore provide subsidies only to those who qualify. Healthcare is subsidized, but citizens pay a share. School and university subsidies go to lower‑income families. Every benefit is targeted, sustainable, and based on income and circumstances.

In contrast, Maldives’ universal subsidies have become a major fiscal burden. This year alone, MVR 1.8 billion was budgeted for Aasandha, but MVR 2 billion has already been spent. MVR 1.9 billion was allocated for total subsidies, yet MVR 3.4 billion has been spent so far.

Sri Lanka and Pakistan, now mired in financial collapse, are cautionary examples for the Maldives.

We Need This to Change

International financial institutions have long warned that the Maldives’ subsidy system is unsustainable and must be targeted. Yet no government has taken the political risk of reform. Even the current administration, with full authority, has chosen to expand spending rather than restructure it.

This path is untenable.

Experts say the most critical reform is to target subsidies only to the poor, including electricity, water, staple foods, fuel, and allowances for single parents and the elderly. This can be done through cash transfers or vouchers for verified low‑income families.

Aasandha reform is more complex. Unlimited spending must end, and those with adequate income should contribute. Military and police welfare should also shift to a targeted model.

Citizens, too, must take responsibility. The prevailing mindset is to claim any benefit available, even when unqualified. But national interest must outweigh personal gain.

Maldives is not a poor country, but corruption and waste leave little behind. This fuels debt. Reform is essential, and restructuring subsidies and allowances is one of the most important steps.

The current approach is not appropriate. It must change.