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Social grants: Creating a more equitable society
BY JESSIE TAYLOR
South Africa’s welfare system provides much-needed relief to millions of those who live in poverty. In order to increase food security among vulnerable households, the Department of Social Development is looking to increase its Social Relief of Distress Grant. This increase is likely to ensure those living below the breadline are able to afford basic nutrition and reduce the poverty gap.
One of the ways of reducing inequality in South Africa is through the redistribution of wealth among citizens in the form of a social welfare programme.
The government has a number of social grants in place to protect vulnerable people and households, by providing them with financial support from taxpayers’ contributions.
A SOCIAL WELFARE SYSTEM SUPPORTING MILLIONS
South Africa has a well-established social welfare system that pays out more than 18 million social grants every month. According to data from the Department of Social Development, almost half of all South Africans rely on financial support from the government, and around a third depend on social grants.
Research has suggested that South Africa’s social grant beneficiaries are almost double the number of registered taxpayers.
Most of the South African government’s social spending is divided between the Department of Basic Education and the Department of Social Development. The government has budgeted R1.3-trillion over the next three years in social spending. Of this, more than 95% (R684-billion) has been earmarked for the payment of social grants.
Over the next three years, R3.33-trillion will be allocated to the social wage to support vulnerable and low-income households.
According to Treasury, the social wage amounts to almost 60% of consolidated non- interest spending. South Africa’s comprehensive social wage has been significantly augmented in the last two budgets. The South African government is mandated by the Constitution to protect the socio-economic rights of citizens, including the right to social security. Social grants are a mechanism used by the government to improve the standard of living for many South Africans, by redistributing wealth to reduce inequality.
Administered by the South African Social Security Agency, there are a number of grants to protect against vulnerability and poverty. They include the Child Support Grant, Disability Grant, Older Person’s Grant, and Social Relief of Distress Grant.
During the pandemic, the government implemented a special Covid-19 Social Relief of Distress Grant of R350 per month - around 10 million South Africans were eligible for the special grant.
SPECIAL RELIEF, BROUGHT ON BY EXCEPTIONAL CIRCUMSTANCES
The Covid-19 Social Relief of Distress Grant was established to ease some of the unprecedented social and economic challenges brought on by the pandemic. Covid-19 saw low- and no-income individuals and households placed under increased economic pressure, with many enduring extreme financial hardships during the national lockdown implemented to control the spread of the virus. In response, the government introduced a special grant of R350 in May 2020. This was the first large-scale digitally implemented social security measure. Data from the Department of Social Development showed that the grant was mostly used to purchase food.
This finding supports the call for increased social assistance programmes, indicating that food security remains a key area in which to focus social assistance.
Social Development Minister Lindiwe Zulu recently put forward a proposal to adjust the social relief of distress grant from R350 to R624 and to relax the eligibility criteria.
The increased amount will match South Africa’s food poverty line (the monthly amount needed for individuals to consume their minimum required daily energy intake), which for this year is R624.
The continuation of this R350 monthly grant through to March next year is expected to add R44.4-bn to the government’s spending in the 2022/2023 financial year. This will push spending on social grants in 2022/2023 which will increase to an unprecedented R364.4-bn, equivalent to almost 4% of GDP.
However, the bulk of the government’s spending on social grants remains on old-age and child-support grants. These grants perform the essential function of increasing food security among the country’s most vulnerable citizens.
