Big changes planned for grants and social security in South Africa – including a new basic income

Social development minister Lindiwe Zulu says that her department is considering a more comprehensive social security system for South Africa.

Responding to a written parliamentary Q&A from the Democratic Alliance, Zulu said that the government will create a three-pillar system comprising social grants, contributory social insurance and voluntary insurance.

This will ensure that those who can contribute towards their own social security provision are provided with appropriate institutional platforms to participate in social security cover, she said.

“The policy makes extensive proposals for ensuring that all working people in the country, both in the formal sector and those in atypical forms of employment are mandated or encouraged to make contributions during their working years so that they will have adequate income in the event of retirement, death or disability.

“These policy proposals will be the subject of wide stakeholder consultations during this financial year,” Zulu said.

The minister said that her department currently has a social assistance budget of R190 billion, with more than 18 million South Africans receiving some form of a grant.

She added that the government is mandated to provide social assistance to specified categories of vulnerable people, including children, the elderly above the age of 60 years and persons with disabilities.

“All the social grants are means-tested, with the exception of the foster child grant, to ensure that only the most vulnerable are able to access it.

“Over the past 20 years, the budget has been kept constant at around 3% of the national gross domestic product (GDP), thus staying more or less in line with the economic performance of the country.”

New basic income grant 

In May, Zulu said that her department will move forward on plans to introduce a new basic income grant in the country.

The minister said that the need to introduce a basic income grant has become an urgent consideration for the African National Congress-led government.

“To this end, the department has developed a Basic Income Grant (BIG) discussion document that we have started to consultations on. These consultations are targeted at developing the BIG financing mechanism for the unemployed population group that is aged 19 — 59 years.”

Zulu said that a secondary process around a new BIG is being discussed by the National Economic Development and Labour Council (Nedlac).

Read: South Africa will spend more than R195 billion in the next year – paying 18 million grants a month