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The case for social grants

More than 16m people in South Africa are beneficiaries of social grants – up from 2.5m in 1998.

PRETORIA – In the 2013 Budget Review National Treasury indicates that at the end of the 2012/13 fiscal year 16.1m South Africans received social assistance through grants. For more than 22% of households in the country, social grants are the main source of income and is directly funded through the fiscus. In 2013/14 it will contribute R113bn to the income of low-income households.

In 1998 there were 2.5m beneficiaries of social assistance. The increase to 16.1m in 2012/13 means that the number has increased by 544% in the last 14 years. By 2015/16 the number is estimated to be on 17.1m.

In a chapter in the Budget Review National Treasury makes out a case for the existence and extent of this social assistance as part of the social wage. The social wage also includes spending on health, education, social development, public transport, housing and local amenities.

“The social wage achieves a redistribution of income and opportunities through the discus, partly because benefits are directed on the basis of need, and partly because costs are met through a progressively structured tax system,” the Budget Review reads. This is necessary as South Africa confronts high levels of poverty and inequality, but the review also indicates that in the “fiscally constrained period ahead, the emphasis will need to be on improved value for money”.

“Substantial growth in social spending over the past decade has financed a threefold increase in the number of people receiving social grants, a doubling in per capita health spending, the construction of 1.5m free homes and the provision of free basic education to the poorest 60% of learners,” the Review reads.

With regard to grants, the number of child support grant beneficiaries has risen from 5.7m in 2004/05 to about 11.4m as a result of the increase in the eligibility age to a child’s 18th birthday. “An impact study conducted in 2012 found that receipt of this grant promotes early childhood development, improves educational outcomes and contributes to better nutrition and health,” the Review reads.

Two new social assistance reforms are proposed for the period ahead. Firstly government will explore ways to improve income support for orphaned children who live with their relatives. Secondly the means test for the old age grant will be phased out.

The tables below show the changes in the monthly social grant values and the number of beneficiaries by province and type of grant.

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