Too little, too late? Iran’s $7 monthly payout for 8 crore citizens and why it may not end protests

Protesters wave pre-1979 Islamic Revolution flags of Iran during a demonstration against the Iranian regime's crackdown on protests, in central Paris, on January 4, 2026. (Photo by Blanca CRUZ / AFP)

Iran’s government announced $7 monthly cash and voucher payments to most citizens amid nationwide protests over soaring inflation and a collapsing currency. The relief aims to ease unrest, but analysts doubt it will address deeper economic and political grievances.

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Iran’s government has announced a direct cash and voucher payout programme in an attempt to calm nationwide protests triggered by a worsening economic crisis, soaring inflation, and a collapsing currency. The plan comes as demonstrations enter their second week and spread across most of the country.

Iran has been gripped by protests since December 28, initially led by merchants who shut down markets in Tehran to protest the sharp fall of the rial against the US dollar. University students soon joined in, with demonstrations reported across 27 of Iran’s 31 provinces.

Official data shows inflation hit 52.6 percent in December. Videos verified by the BBC showed crowds chanting “Freedom, freedom, freedom” in the south-western city of Yasuj. In Sari, protesters were heard shouting “Death to the dictator,” a reference to Supreme Leader Ali Khamenei, and “Pahlavi is coming back,” invoking the exiled son of Iran’s last shah.

Demonstrations were also reported in Ilam, Arak, Hamedan, Amol, Lahijan, Kermanshah, Semnan and Noorabad. According to Kurdish rights group Hengaw, security forces opened fire on protesters in Malekshahi, killing several people. Among the dead was retired Revolutionary Guards brigadier general Latif Karimi.

Azar Mansouri, a leader of Iran’s Reform Front, called the incident “a disaster” and urged authorities to “identify the perpetrators, introduce them to the public, and bring them to justice.”

Arrests and deaths mount

A US-based rights group, Human Rights Activists News Agency, said at least 35 people have been killed so far, including 29 protesters, four children and two members of the security forces. More than 1,200 people have reportedly been arrested.

Iran’s semiofficial Fars news agency said around 250 police officers and 45 members of the Basij force were injured during the unrest. Police were also seen entering the University of Birjand and arresting students, according to The Guardian.

US President Donald Trump warned that Iran would be “hit very hard” if more protesters were killed. Iran’s foreign ministry spokesman Esmail Baghaei dismissed the remarks as “psychological warfare and media propaganda.”

Government announces $7 relief payment

Against this backdrop, the Iranian government said it would provide financial relief to most citizens. Government spokeswoman Fatameh Mohajerani announced that around 80 million people would receive payments worth about $7 a month.

She said the plan aims at “preserving households’ purchasing power, controlling inflation, and ensuring food security”. President Masoud Pezeshkian said the government was changing how subsidies are delivered.

“We are not removing subsidies, we are delivering them to the final consumers,” Pezeshkian said, adding that previous exchange rate subsidies had been exploited without lowering prices.

Under the new plan, around $10 billion previously spent on subsidising imports will be redirected to direct payments. According to The Telegraph, the government will transfer 10 million rials in voucher form to citizens over four months. The amount is roughly equal to an average daily wage.

Will it calm public anger?

The monthly support would be enough to buy about 100 eggs, a kilogram of red meat, or a few kilos of rice or chicken, according to The New York Times.

Esfandyar Batmanghelidj of the Bourse and Bazaar Foundation told the NYT that the payments may help the poorest but will not ease wider despair. “It’s a small amount for the middle class and will not meaningfully improve their standard of living, but it will definitely improve the situation for the poorest quintile,” he said.

In a rare admission, Khamenei acknowledged public anger. “Protest is justified, but protest is different from rioting,” he said. “We talk with protesters, but talking with rioters is useless.”

Analysts say the mix of financial relief and dialogue shows the Iranian leadership sees the unrest as a serious threat, even as many doubt that modest payments alone can resolve the deep economic and political grievances driving people onto the streets.