Bahrain has agreed to increase payouts to around 100,000 needy families in an attempt to end the impasse on the national budget.
Breadwinners with an income less than BD1,000 will be eligible to receive the monthly anti-inflation allowance as a result of new criteria drawn up by the government.
It means people earning less than BD300 will receive BD100, those being paid BD301 and BD700 will get BD70, and people being paid between BD701 and BD1,000 will receive BD50.
The changes will replace the existing BD50 payout to anyone earning less than BD700, which was introduced in 2007.
Payments will be backdated to January and will cost the government BD105 million this year and next.
The deal was presented by Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa during an urgent meeting with the Shura Council's financial and economic affairs committee yesterday.
But the government has refused to back down on its refusal to fund 15 per cent pay rises for 45,000 civil servants, which was the key reason MPs rejected the budget during a vote last month.
It has already been delayed for more than seven months.
However, the government has agreed to increase pensions of Bahrainis working in the public and private sector, which will cost around BD158m this year and in 2014.
A total of 35,392 pensioners receiving less than BD700 a month will receive BD70 extra, while 8,833 pensioners getting between BD701 and BD1,500 will get an additional BD50.
Shaikh Ahmed expects the budget to be implemented in early July after being ratified by His Majesty King Hamad.
"MPs wanted the anti-inflation allowance under new criteria and we studied it and found that we can fund it with payments being dispensed backdated to January, pay rises to pensioners has been also additionally increased by 5pc to ensure that all of those on the lists benefit besides increasing aid to needy families," he said.
"The budget is just one of the mechanisms to help us achieve our sustainable development goals and there are plans to unify pension benefits and other economic initiatives that we will present the moment we close the budget's chapter.
"Citizens come first, but we have to think about future generations, if we are to borrow more money to meet our deficit."
Committee chairman Khalid Al Maskati said that Shura had a difficult task to satisfy government and parliament demands to ensure the budget gets passed next week.
"Thankfully, MPs listened to our explanation that oil prices could drop from the rates the budget is based on and this would lead the government into further deficit that would see it surpass its BD6 billion, expected by the end of next year," he said.
"Yes, Bahrain is receiving the BD10bn GCC Aid Plan, but it is directed to urban development and not to enter people's pockets directly and that's a misunderstanding that people have to realise."
Shura will hold an extraordinary session on Thursday to vote on the budget, before referring it to MPs, who will most likely hold another vote on Sunday during an extraordinary session. email@example.com