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The Potential Challenges of Extending the R350 Grant Beyond March 2024

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The Potential Challenges of Extending the R350 Grant Beyond March 2024

The Potential Challenges of Extending the R350 Grant Beyond March 2024.Nearly 8 million vulnerable individuals in South Africa are currently benefiting from the R350 grant. However, discussions about extending this grant beyond March 2024 have brought to light several significant challenges and potential sacrifices that need to be considered.

SASSA Status Check | SRD R350 Payment Dates for 2023 

The Potential Challenges of Extending the R350 Grant Beyond March 2024

The SRD grant, initially introduced in 2020, has been extended multiple times, maintaining its value at R350. This has led to calls from beneficiaries, activists, organizations, and members of parliament to both extend and increase the value of this grant. Additionally, there are discussions about transforming it into a basic income grant.

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The Proposal for a Basic Income Support Policy

Earlier this year, Social Development Minister Lindiwe Zulu revealed that her department has completed and consulted on a draft policy for Basic Income Support, aiming to address the long-term income needs of vulnerable working-age individuals.

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The Fiscal Challenges Ahead

Nevertheless, media reports indicate that the National Treasury has informed President Cyril Ramaphosa and his ministers about unprecedented revenue and spending pressures faced by the government. These pressures are the result of a challenging economic landscape marked by extensive load-shedding, persistent inflation, and sluggish growth.

The Dilemma of Funding the SRD Grant

To continue funding the R350 SRD grant, Treasury suggests that the government may need to find ways to cut costs, potentially through measures such as increasing value-added tax (VAT) or restructuring state departments and programs.

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VAT Increase Considerations

To raise the necessary funds for the R350 SRD grant, the government might have to raise approximately R42 billion in the current year. This could necessitate a 1% or 2% increase in VAT, which would provide the required financial support but also place additional strain on South African citizens.

The Proposal to Restructure State Departments

One of the proposals to cut costs involves restructuring government departments. Suggestions include merging the Department of Sport, Arts and Culture with the Department of Basic Education, merging the Department of Tourism with the Department of Trade, Industry, and Competition, and possibly closing the Department of Public Works and Infrastructure.

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Concerns about Restructuring

However, these measures have raised concerns. Claude Naiker, Public Servants Association National Manager, highlights that these changes may exacerbate existing issues and hinder important projects within the public sector.

Calls for an Increase in the SRD Grant

Meanwhile, there are ongoing calls for an increase in the SRD grant. ANC Youth League president Collen Malatji has suggested providing unemployed graduates with a monthly grant of R4,500 and increasing the current R350 Social Relief Distress Grant to R1,500 per month until unemployment issues are resolved. These proposals are aimed at supporting young people in their pursuit of opportunities amidst economic challenges.

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