South Africa 'temporary' assistance grant  costs the nation R2.7 billion every month

According to the Department of Social Development, almost 8 million grant applications for the social relief distress grant (SRD) were authorised in January alone.

“As of the end of January, the South African Social Security Agency (Sassa) received over 13.5 million applications for the SRD. Of this number, between 7.4 million and 7.8 million clients are approved every month,” said the minister of social development Lindiwe Zulu.

At R350 per grant and 7.8 million participants, this corresponds to R2.7 billion paid from the national budget each month to assist cash-strapped South Africans through one of the numerous projects incorporated within the total social wage.

More than 25 million South Africans get some type of economic support under social security. According to the Department of Social Development, social salaries account for around 60% of the government’s budget.

Additional programmes are currently in place to help with free housing, utilities, education, disability, and health care.

Responding to concerns over late payments in recent months, minister Lindiwe Zulu stated at a parliamentary committee hearing that all payments and statements are now up to date and valid.

In terms of payments, around 95% of accepted candidates were paid during the first several months. As a result, by August 2022, this coverage had reduced to almost 90%. In recent months, we’ve seen a further reduction to 85%,” Zulu said.

In recent weeks, economists and commentators have expressed concern about the SRD award, claiming that it is simply unsustainable given the country’s economic situation.

The SRD stipend was first implemented in 2020 as a temporary solution to aid households in dealing with the pandemic’s stresses; nevertheless, it has already become a likely permanent part of the social wage.

President Cyril Ramaphosa stated in his most recent State of the Nation Address (SONA) that the grant will be continued indefinitely.

This opinion is shared by the fiance minister, Enoch Godognwana, who declared in late 2022, during his medium-term budget, that it would be extended until March 2024.

Momentum Investments noted that the grant’s retention is putting further strain on the national budget.

Because the government’s budget is being pushed thinner by the month, Bank of America believes the government will be obliged to discontinue providing the grant  and link other grants to inflation.

Who is eligible

The department gazetted modifications to the laws controlling the R350 grant distribution in August 2022.

The means test income level was raised from R350 to R624 per month, which was the food poverty line.

Earlier, anyone earning more than R350 per month were disqualified for the stipend. Nevertheless, with the change, the threshold was lifted to R624, allowing a greater number of people to qualify for the award.