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Changing Landscape of South Africa Social Grant System Since 1994

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Changing Landscape of South Africa Social Grant System Since 1994

Changing Landscape of South Africa Social Grant System Since 1994. In 1994, as South Africa transitioned to a democracy, social grants were primarily limited to approximately 2.5 million recipients, mainly comprising old age grants, disability grants, and state maintenance grants (precursors to the child support grant). Today, the South African Social Security Agency (Sassa) disburses a staggering 26 million social grants each month.

The Growth of Grant Expenditure: A Transformation in Financial Support

During the apartheid era, social grants primarily targeted white beneficiaries, with Old Age Pensions being introduced initially for ‘white’ and ‘coloured’ people in 1928. These grants were later extended to ‘Indian’ and ‘black’ people in 1944, albeit with disparities in grant amounts based on race. The later years of apartheid saw a convergence in grant values, ultimately offering equal pensions to all by 1994, along with additional grants for children and foster parents.

Since 1994, government spending on social grants has soared from R10.5 billion to R232.7 billion in 2022, constituting about 11% of the national budget of R21 trillion. Even when accounting for inflation, social grant expenditure has quadrupled over this period.

The Proliferation of Grant Recipients: A Broader Safety Net

The number of grant recipients has skyrocketed since 1994, with approximately 42% of South Africa’s population now receiving some form of social grant, a significant increase from the mere 6.5% in 1994. The key government grants and their approximate recipient numbers in 2022 include:

  • Child support grant: 13.2 million recipients, with a value of R510 in 2023.
  • Foster child grant: 274,000 recipients, offering R1,130 in 2023.
  • Old age grant: 3.9 million recipients in 2022, with a value of R2,090 in 2023.
  • Grant in aid: 328,000 recipients in 2022, providing R510 in 2023.
  • Disability grant: 1,035,000 recipients in 2022, with a value of R2,090 in 2023.
  • Child care dependency: 157,000 recipients in 2022, offering R2,090 in 2023.
  • Covid-19 social relief of distress: Variable number of beneficiaries based on a means test, with R350 in 2023.
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The Evolving Value of Grants: Battling Poverty and Economic Challenges

Over the years, the values of social grants have fluctuated in relation to three poverty lines, although Stats SA started calculating and publishing these lines in 2007. Despite these fluctuations, social grants have contributed to a reduction in poverty rates since the end of apartheid.

The old age grant, for instance, has increased from R390 in 1994 to R1,985 in 2022. When adjusted for inflation, it has largely remained above the upper-bound poverty line (R1,417 in 2022). However, for many recipients, this grant is used to support larger households, which can push the per-person income below the poverty line.

The foster care grant has not kept pace with inflation and, while it was near the upper-bound poverty line in 1994, it is now only slightly above the lower-bound food poverty line (R663 in 2022).

The child support grant, although contributing to reducing child poverty, has not consistently met the food poverty line. The Department of Social Development’s 2023 review indicates the need for an increase to adequately address child poverty.

Diverse Utilization of Grants: Impact on Employment and Livelihoods

Research by the University of Johannesburg’s Centre for Social Development in Africa shows that grant recipients primarily allocate their funds to food and productive investments in livelihood activities. For example, the Social Relief of Distress grant enhances the likelihood of recipients seeking employment. In 2021, a third of all grant beneficiaries and 14% of child support grant beneficiaries engaged in informal work, while 8.6% of all grant beneficiaries were self-employed.

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It’s important to note that the data used in the graphs does not encompass various other forms of social assistance, such as workfare programs, feeding schemes, or NSFAS (National Student Financial Aid Scheme) grants and loans. South Africa’s social grant system has undergone significant transformation since 1994, adapting to the evolving needs of its citizens.

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