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Aug 2, 11:46 AM EDT

Iran cuts welfare rolls to ease budget crisis


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TEHRAN, Iran (AP) -- Iran said Sunday it will stop giving cash handouts to another million of its wealthiest citizens in order to ease a budget crisis caused in part by plunging oil prices and sanctions linked to its disputed nuclear program.

State TV quoted Labor and Social Welfare Minister Ali Rabiei as saying that the new cuts will be implemented by Aug. 22. One million people have already been removed from the rolls, and those and the latest cuts are expected to save the government an estimated $30 million a month.

The government has been distributing about $15 a month to the vast majority of Iranians since 2010 as compensation for cuts in food and energy subsidies. Some 4 million Iranians voluntarily withdrew from the program last year.

The government began gradually scaling back the cash handouts in March, hoping to avoid public anger as the country struggles with high inflation and unemployment. Some wealthy citizens have challenged the move, to no avail.

Under the budget law, the government is required to remove 6 million Iranians from the list by March 20, 2016. Authorities have said the move will only affect those making more than $850 a month.

The handouts were introduced by hard-line former President Mahmoud Ahmadinejad, who was subsequently criticized for allocating more than 90 percent of the funds generated by the subsidy cuts to the program.

The government of President Hassan Rouhani, a relative moderate elected in 2013, has vowed to reduce the budget deficit and allocate more funds to development projects rather than cash handouts.

"Cash handouts are the right of the needy. The rest should be allocated to creating jobs, providing education and developing deprived villages," Rabiei told state TV.

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