South Africa’s R15 billion grant problem: report

 ·17 Sep 2023

The Department of Social Development has returned over R15 billion of social relief of distress (SRD) grants to the National Treasury over the last financial year despite the disastrous economic climate.

According to Stats SA’s latest General Household Survey for 2022, grants were the second main source of income for 50.2% of households after salaries (59.75%) in South Africa.

However, grants were also the primary source of income for 23.5% of all households in the country. In addition, in the Eastern Cape, Mpumalanga, Limpopo and Free State, more households received grants than salaries.

The introduction of the SRD grant following the outbreak of Covid-19 also increased the number of households who benefitted from grants from 30.9% in 2019 to 37.0% in 2022.

However, as reported by City Press, 6 million people who applied for the R350 SRD grant could not be found in the last financial year, reducing the number of SRD recipients from 13 million to 7 million.

A social development adjusted budget summary document showed that the department returned R9.1 billion last October and an additional R6 billion by the end of the financial year in March.

Officials said they could not locate some applicants as they did not respond to SMSes, while others were no longer qualified for nonverification of bank accounts.

“The department claims that we couldn’t locate applicants through their phones, but there were no initiatives to reach out. How can we expect people from rural areas to receive SMSes when we have so much load shedding?” one source said.

SASSA grant chaos

This news comes amid a turbulent time for the Postbank, where a technical glitch affected over half a million people’s ability to get their SASSA grants.

To make matters worse, all except one member of the Postbank board resigned with immediate effect earlier this week due to what they claimed was a breakdown in the relationship with Minister of Communications and Digital Technologies Mondli Gungubele.

The minister fired back by claiming that the board members had “preemptively” resigned, knowing that positions were under threat. They were correct, as the minister fired the last remaining board and placed the soon-to-be state-owned bank under administration.

He argued that the board was fired due to the continued use of an allegedly illegal software contract worth R140 million.

“Postbank has had a disclaimer for no less than two years. No serious-minded nation can allow a financial institution to tolerate that. Normally, financial institutions are held in the highest regard compared to any other institution,” the minister said.

“A serious-minded leadership would not allow this to continue like this, and somebody had to accept the responsibility. In our view, the board had to accept that responsibility.”

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