Major changes planned for grants in South Africa

 ·19 Aug 2021

The Department of Social Development has published a Green Paper on social security and retirement, including a proposed overhaul of the country’s grant systems to cover a much wider group of people.

The current social assistance framework does not provide a ‘comprehensive floor’. As a result, the department said the largest portion of the population remains without any or very little social protection coverage.

“It is proposed that the means tests for social grants be phased out through alignment of social assistance with the structure of personal income tax rebates, and the safety net be expanded to include working-age individuals.”

“The objective is that all dependent children, the disabled and the elderly and those of working age, should be eligible for income support, regardless of their income or assets.”

This basic income will form part of a comprehensive social protection floor, it said.

The additional expense to the fiscus could be phased in over time through changes to the structure and value of tax rebates, subsidies and the possible introduction of additional tax, it said.

The proposal for the universalisation of the existing grants is premised on the fact that state benefits are mostly universal already but fragmented with different systems, criteria and benefit values.

“For example, there are 4.4 million older persons in South Africa, of which 3.1 million receive the Older Persons Grant (OPG) and 400,000 older persons who receive tax rebates.

“The group whose income is too high for a grant or too low to benefit from the tax system receive no benefit from the state.”

The department estimates that about a million older persons are excluded from the existing state benefits.

This is mainly due to the fragmented nature of state benefits. The poor and the wealthier have relatively some coverage, and those falling between the tax and the social assistance receive little to no benefits.

Re-entering the workforce 

The department said that a lack of coherence and coordination between social security arrangements and the job market leaves some people with no access or coverage.

For example, people entitled to social assistance currently face challenges with access to public employment services from the UIF as they might never have worked, it said.

To address this, the department said that social security recipients should be encouraged and enabled to re-enter the labour market at the earliest opportunity through a range of supportive programmes, including:

  • Public employment support institutions;
  • Active labour market policies;
  • Skills development programmes.

“The proposed social security reforms will enhance the links between social security income protection arrangements and the labour market,” the department said.

“For example, under the proposed reforms, social security agencies and labour centres will share facilities and infrastructure, through the proposed one-stop-shop walk-in centres with associated online public interfaces, thus expanding the footprint of the individual agencies and public employment services.”

These closer links must also have meaning for the individual worker, the department said.

“Members of the labour force should have access to appropriate income protection when they need it, irrespective of the nature of their employment or identity of their employers.

“The unemployed also need assistance to find work, and the disabled need to develop alternative occupational skills to have access to facilitated job placement.”

Read: Government’s plan to give basic income to everyone in South Africa – and it wants tax hikes to fund it

Show comments
Subscribe to our daily newsletter