{"id":829988,"date":"2025-07-03T16:49:55","date_gmt":"2025-07-03T14:49:55","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=829988"},"modified":"2025-07-03T16:51:04","modified_gmt":"2025-07-03T14:51:04","slug":"trouble-looming-for-almost-11-million-south-africans","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/829988\/trouble-looming-for-almost-11-million-south-africans\/","title":{"rendered":"Trouble looming for almost 11 million South Africans"},"content":{"rendered":"\n

The National Treasury has doubled down on its stance that extending the SRD grant is unaffordable for the country. <\/p>\n\n\n\n

At the same time, there are warnings that the Department of Home Affairs’ new identity verification fees will also hurt grant recipients.\u00a0<\/p>\n\n\n\n

The National Treasury has reiterated that the SRD grant, introduced initially as a temporary measure during the COVID-19 pandemic, is fiscally unsustainable in its current form. <\/p>\n\n\n\n

New administrative policies, including an unprecedented increase in identity verification fees, also risk cutting off vulnerable citizens from crucial financial services.<\/p>\n\n\n\n

Despite being extended in 2025 for another year, the SRD grant remains in limbo. <\/p>\n\n\n\n

The Treasury has allocated R35.2 billion to fund the R370 monthly payment this financial year, but that commitment comes with strong reservations.\u00a0<\/p>\n\n\n\n

Treasury officials have warned that a recent High Court ruling requiring the government to expand eligibility and adjust the grant\u2019s value for inflation presents a significant fiscal risk.<\/p>\n\n\n\n

The judgment, handed down in January 2025, found key regulations unconstitutional \u2013 particularly the online-only application process, the R624 income threshold, and the exclusion of one-time gifts from income calculations.\u00a0<\/p>\n\n\n\n

The court ordered the government to gradually increase the grant to align with the rising cost of living. <\/p>\n\n\n\n

However, the state has appealed the ruling, leaving millions of potential beneficiaries in limbo as the legal battle continues.<\/p>\n\n\n\n

Rendani Randela, Treasury\u2019s head of public finance, said<\/a> the ruling would force the government to expand the grant to thousands more people, something the state cannot afford. <\/p>\n\n\n\n

\u201cThat judgment is a fiscal risk on its own,\u201d he told Parliament. \u201cSocial assistance is not the only programme we have. <\/p>\n\n\n\n

There\u2019s no way we can\u2019t have a mechanism to filter out undeserving recipients. If we don\u2019t challenge it, it is unaffordable.\u201d<\/p>\n\n\n\n

Treasury\u2019s concern stems from the already immense pressure on South Africa\u2019s social wage, which consumes 61% of the national budget. <\/p>\n\n\n\n

Treasury argued that other forms of social support already exist for many SRD recipients, and warned against \u201cdouble-dipping.\u201d\u00a0<\/p>\n\n\n\n

Another blow <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

While civil society has long called for the SRD to become a permanent basic income grant, no such decision has been made.<\/p>\n\n\n\n

The 2022 budget set aside R44 billion to support 10.5 million people until March 2023, but this proved insufficient<\/a> for the 10.9 million people identified as eligible.<\/p>\n\n\n\n

In the 2024 budget, the SRD was allocated R33.7 billion for an estimated 9.24 million beneficiaries. However, demand has again exceeded expectations. <\/p>\n\n\n\n

Exacerbating the crisis is the Department of Home Affairs\u2019 controversial decision to raise the cost of digital identity verification by 6.500%,  from around R0.10 to R10 per verification. <\/p>\n\n\n\n

Tyme Bank CEO Coenraad Jonker has warned<\/a> that this move will have dire consequences for SRD recipients and other low-income South Africans who rely on affordable, digital-first banking.<\/p>\n\n\n\n

In an open letter to Home Affairs Minister Dr Leon Schreiber, Jonker called the hike \u201canti-poor\u201d and \u201ccompletely out of kilter with world best practice.\u201d <\/p>\n\n\n\n

He noted that the new price is twice that of Pakistan, widely regarded as one of the most expensive countries for identity verification, and dramatically more than in emerging-market leaders like Peru. <\/p>\n\n\n\n

He argued that the fee increase undermines financial inclusion and breaks the economics of serving the poorest customers.<\/p>\n\n\n\n

\u201cFor banks like Tyme, which operate entirely digitally, real-time ID verification is central to keeping services low-cost,\u201d said Jonker. <\/p>\n\n\n\n

\u201cOur cost will jump from R130,000 a month to R13 million, a 100-fold increase. That\u2019s simply not sustainable.\u201d <\/p>\n\n\n\n

While Tyme Bank could absorb the cost in the short term, Jonker said no business can operate indefinitely at a loss. <\/p>\n\n\n\n

\u201cEither we raise prices, which makes services unaffordable, or we cross-subsidise, which isn\u2019t viable long term.\u201d<\/p>\n\n\n\n

Jonker acknowledged that the current Home Affairs system is broken and requires investment, but said it was wrong to fund those upgrades by effectively taxing the poorest South Africans. <\/p>\n\n\n\n

According to Jonker, the reality is that Tyme Bank has been able to serve SRD grant recipients profitably because of its low-cost operating model, which is now at risk. <\/p>\n","protected":false},"excerpt":{"rendered":"

The National Treasury believes that extending the SRD grant is unaffordable for South Africa, while Tyme Bank CEO has pointed out another problem for recipients. <\/p>\n","protected":false},"author":92,"featured_media":731333,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[23002,3796,6464,18480,13474],"class_list":["post-829988","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-dept-of-social-development","tag-national-treasury","tag-parialment","tag-srd-grant","tag-tyme-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/829988","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=829988"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/829988\/revisions"}],"predecessor-version":[{"id":830434,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/829988\/revisions\/830434"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/731333"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=829988"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=829988"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=829988"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}