Three ticks on the social grants front

Increases for recipients, R1bn cost saving for government, and R1.5bn a year in revenue for the Post Office for administering payments.
Beneficiaries can now collect their grants from the local post office, supermarket, bank or ATM – and not from pay points such as this one in Jakkalsdans, North West. Image: Moneyweb

Social grants will increase between 4% and 4.7% in the coming year, according to Finance Minister Tito Mboweni who delivered his budget speech on Wednesday.

“Grants reduce inequality and protect the most vulnerable in society,” said Mboweni, pointing out that changes in the social grant provision system had resulted in about R1 billion per annum in efficiency savings.

This cost saving would, in part, go towards raising the daily subsidy per child.

The R1 billion efficiency saving refers to the contract for the administration of social grant payments, which was moved in 2018 from Net1 subsidiary Cash Paymaster Services (CPS) to the South African Post Office (Sapo).

Beneficiaries can now collect their grants from post office branches as well as certain supermarkets, banks and ATMs using a Sassa (South African Social Security Agency) card. The loss of the lucrative contract, which oversees the payment of grants to more than 18 million beneficiaries, saw CPS parent company Net1 report a 41% decline in revenue for the fourth quarter of 2019.

Grant payments could be Sapo’s lifeline

Meanwhile, Sapo has reported that it is incurring as much as R600 million a year in security costs after taking over the responsibility for Sassa payments.

However, presenting its results in Parliament last October, Sapo reported that it anticipates gross revenue of R1.9 billion a year from the Sassa project.

It posted a net loss of R1.1 billion last year, so administration of the Sassa payments is widely viewed as a lifeline for the beleaguered entity.

The social grant increases

Grant 2019/20 2020/21 Increase
Old age R1 780 R1 860 4.50%
Old age – over 75 R1 800 R1 880 4.40%
War veterans R1 800 R1 880 4.40%
Disability R1 780 R1 860 4.50%
Foster care R1 000 R1 040 4.00%
Care dependency R1 780 R1 860 4.50%
Child support R425 R445 4.70%

Source: National Treasury

Over the medium term, the total number of beneficiaries is expected to increase by almost one million, to approximately 19 million by 2022/23.

Child support grant remains low

The University of Cape Town’s Child Institute last year released a report highlighting that the child support grant is too low.

Introduced in 1998 with an initial value of R100, the child support grant has become the single biggest programme for alleviating child poverty in South Africa.

The income threshold or means test to determine who can receive a child support grant is calculated using a formula of ten times the amount of the grant.

This means that in 2020, you can receive a child support grant if you are a single parent with a monthly income of R4 250 or less, or married parents with a combined income of R8 500 or less.

Early childhood development prioritised

Funds amounting to R406.2 million in 2020/21, R517.3 million in 2021/22 and R626 million in 2022/23 have been reprioritised, mainly going towards the early childhood development conditional grant.

As a result, the subsidy rate per child will increase by 23.8% from R15 last year to R18.57 in 2022/23 – by which time government estimates that it will provide access to early childhood development services to almost 700 000 children under the age of four.

Read: Why we should allow mothers to buy beer with a child support grant

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Its been 70 years since the end of world war 2. And around 60 years since the end of the korean war.
An 18 year old then would he about 90 years old now and SA had limited personnel involved in those wars. many war veteran grant recipients are there still? How is it that absolutely no one thinks to question some of these things?
And how much of the disability grants disappears to fraud?

I know someone personally who messed himself up with drugs and “can’t work”, now gets a disability grant. He blows that all on drugs as soon as he gets it. We’ve reported him as defrauding the government but nobody is bothered to take action.

I’m assuming “war veterans” excludes the hundreds of thousands of SADF conscripts? Another case of reverse racism. Have the guts to call it what it is: “Umkonto we Sizwe cadres”. We can live with the reality … just not the hypocrisy

How many of these claims are fraudulent? Pensioners earning money in a separate bank account, having other assets etc. Billions are being STOLEN and the ANC does what it always does…NOTHING!

End of comments.



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