Social grants. A buoyancy of one means the pace of revenue growth is matching that of GDP growth. 16 Sep 2011. South Africa is an upper-middle-income economy, one of only eight such countries in Africa. By the end of May, the South African Social Security Agency (SASSA) managed to pay out the R350, Covid-19 Social Relief of Distress grant to over 100 000 beneficiaries. But how many are true? Haroon Bhorat and Aalia Cassim examine the effectiveness of social grants in South Africa, which research shows has made a noticeably positive … This has negative implications on the government’s drive to increase commercialisation levels of smallholder farmers by … A team of researchers predict that the extreme poverty rate among vulnerable households will almost triple. Many negative perceptions exist about social grants and their recipients, and a study by the Centre for Social Development in Africa (CSDA) at the University of Johannesburg shows that even beneficiaries themselves believe the stories. This had lasting effects on social … Staff Writer 21 April 2020. The means test is the process of assessing the value of your assets and income. The government is giving out food parcels and has increased social grants to help people, but food prices have also increased. Brand South Africa reporter. The cash transfer package included a temporary increase in existing grants … Hagen-Zanker, Morgan and Meth (2011) noted that social grants have a range of positive outcomes on non-monetary aspects of poverty, such as health of household members, school attendance of Responsibility to distribute grant 17 2.1.5. The scope of social classes in South Africa 35 iii. Notwithstanding enormous sociopolitical pressures on the national budget after social grants reform, new analysis shows that the overall fiscal position is still stable. As a form of social protection, social grants not only ameliorate poverty and provide a safety net, they also potentially promote social transformation. The number of social grants recipients in South Africa have increased exponentially over the past twenty years: from an estimated 4-million in 1994 to 16.3-million by 31 August last year. The coronavirus disease 2019 (COVID-19) has resulted in an enormous dislocation of society especially in South Africa. Report of Lund Committee on child and family support 17 2.1.6. The nation-wide lockdown has had a negative impact on the revenue of municipalities at a time when the demands on them are increasing. The state has developed a number of grants for payment to vulnerable members of society like children, the disabled and the elderly to reduce poverty and better manage economic and social risks. Social grants and labour market behaviour: evidence from South Africa’s household surveys. Social grant payments through bank ATMs and retail outlets. The results support the disincentive hypothesis, demonstrating a negative association between social grants and market participation levels of smallholders. Foster Care Grant. About 2.9 million South Africans above the age of 60 receive old age grants, 11.3 million are beneficiaries of child support grants and 1.1 million receive disability grants, the review notes. As at April 16, South Africa has reported 2,506 cases of Covid-19 and 34 deaths. Old Age Grant. Disability Grant. 11 In addition, in the Taylor report (2002) prepared by experts on South Africa’s social grants, it is noted that “among the most consistent complaints in the Social Security system are those … A buoyancy of one means the pace of revenue growth is matching that of GDP growth. This research examines the effectiveness of social grants in South Africa, and how recipients use their grants. If the 29% of SMMEs who are not sure if their business will survive end up not surviving during this period, the number of respondents would increase from 11% to 23%. review of South Africa, concludes that the country needs job-intensive growth, and—in support of its youth—an edu-cation and training system that can produce a more skilled workforce that is better attuned to evolving labor market demands.10 8 “Social grants reach almost one third of South Africans,” South Africa.info, 19 June The transfer programmes included a 6-month temporary top up for all existing social grants and a new grant—COVID-19 Social Relief of Distress—which targeted those who were unemployed and were not previously receiving other forms of government assistance (The Presidency of the Republic of South Africa 2020). The full list of grants available in South Africa include: Child Support Grant. Social grants and labour market behaviour: evidence from South Africa’s household surveys. This has resulted in income loss for individuals and firms, with vulnerable populations (low earners, those in informal and precarious … The impact of social grants has been researched by the likes of the Centre for Social Development in Africa (CSDA) at the University of Johannesburg (UJ), United Nations Children’s Fund (UNICEF) and the Department of Economics at Stellenbosch University, with results showing that they are key to helping poor households survive. In this regard, old age and disability grants will increase by 4.5% to R1 860, up from R1 780. With the help of modest economic growth and an associated increase in per capita household income, the introduction and expansion of social grants has helped alleviate the inherited burden of poverty. email: eseekoe @uj.ac.za. War Veteran’s Grant. In 2002 South Africa … The highest percentage of grant recipients is in the Eastern Cape, where 59% of households are receiving at least one grant. The impact of social grants on poverty and inequality is well documented, particularly in the case of South Africa. COVID-19: South African Government Financial Assistance Measures. The study findings imply that policies aimed at increasing smallholder commercialization should also focus on how to reduce the disincentive effects of social grants. Based on a framework of historical institutionalism, the heritage of a distributional regime based on institutional racism is highlighted. The right to social security 16 2.1.4. These include child, disability and older person grants. Globalization has managed to have an impact on the economy ,politics and social nature bringing about positive results for South Africa. According to the latest General Household Survey released by Stats SA, the percentage of people who rely on social grants has increased from 12.7 % in 2003 to 30.1 % in 2015. SAMSON, M. & WILLIAMS, M. 2007. Republic of South Africa. ii. South Africa's system of social grants has reduced poverty and is playing a developmental role in uplifting poor households, according to a new study. About 2.9 million South Africans above the age of 60 receive old age grants, 11.3 million are beneficiaries of child support grants and 1.1 million receive disability grants, the review notes. Studies show that it [the CSG] improves … The report shows that the poorest in South Africa benefit from social spending programs. The digitisation of South Africa’s social grant payment system was sold as promising to expand financial inclusion, but monopolisation by a single private company mutated it into a … fax: +27114892257. ... in countering the economic effects of lockdowns. For South Africa to be the strongest African economy and attenting positions such as being a member of the g8 as been a clearl work of globalization making it at the center of the Africa. SAMSON, M. & WILLIAMS, M. 2007. It is 25 days since South Africa began a nation-wide lockdown to contain the spread of the coronavirus. South Africa’s tax buoyancy has declined from 1.37 in 2014 … Old Age Grant. These include child, disability and older person grants. Bhorat et al. Visit for more related articles at Diversity & Equality in Health and Care. Sponsored Feature. Commissioned by the Directorate: Finance and Economics for the Department of Social Development. You will only be eligible for a grant if your income and assets fall below a certain threshold. Except for the Foster Child Grant and the Grant in Aid, social grants in South Africa are currently “means tested”. 2. The cash transfer package included a temporary increase in existing grants and introduced a new ‘Covid grant’. evaluated the impact of the provision of social grants on household poverty and inequality, using the Income and Expenditure Survey (IES) Footnote 2 1995 and 2005/2006 data.They found that access to social grant income was not limited to the poorest income … South Africa distributes 17 million social grants every month. Versions of this large social protection system exist elsewhere in the Global South… Millions benefit from social grants. There is no doubt that there is a relationship between poverty and health. Although commonly extended from the government, the term subsidy can relate to any type of support – for example from NGOs or as implicit subsidies. The Constitutional Court has called South Africa's social assistance programme “one of the signature achievements of our constitutional democracy.”. The Conversation Africa’s business and economy editor Sibonelo Radebe asked Jannie Rossouw to explain what’s at stake. What would be the impact if social grants weren’t paid? The great danger confronting South Africa today is that longer-term fiscal imperatives could be used as reasons to limit necessary future growth in spending on social grants. Taking the SBI statistics into account, 57 500 businesses would be affected: Calculation: 250 000 x = 57 500 Growing Dependence of South African's on Social Grants. The main weakness is the fact that the grant system was expanded during a period of rapid economic growth. Payment of grants. The democratic government in South Africa has developed a system of social grants to combat the high levels of poverty and inequality inherited from the apartheid regime. Literature reviewed in this paper reveals that this anti-poverty measure has contributed significantly towards the reduction of poverty levels in South Africa. The paper examines the social protection measure using the Income and Expenditure Survey data (2010/11). Foster care will increase from R1 000 to R1 080, care dependency rises from R1 780 to R1 860. Social grants in South Africa play a critical role in reducing poverty and promoting ... Social security grants counter these negative effects by providing households with more resources to finance ... distortions from the incentive effects created by the social grants. Who has been hit hardest by South Africa’s lockdown? Figures from the Quarterly Employment Statistics (QES) survey showed that South Africa’s formal non-agricultural sector added 81 000 jobs in the fourth quarter of 2017, bringing the total number of persons employed in the formal non-agricultural to 9,8 million. Most grants are targeted in a way that's supposed to serve the greater good, whether by creating art or carrying out research. The full list of grants available in South Africa include: Child Support Grant. Literature review 11 3.1 Labor market impacts 11 3.2 Social impacts 21 4. People are dying across South Africa because of Covid-19 and others will be killed by starvation. Research ICT Africa’s (RIA) 2018 Report on the State of ICT in South Africa reveals that high-speed broadband internet and the broader digital economy play a vital role in South Africa. Save. South African economy gains formal jobs in fourth quarter. The social and economic impact of South Africa’s Social Security System. In fact, social grants encourage laziness and dependency on the government. Over 13-million South Africans, 9-million of whom are children, are currently receiving social assistance benefits, says Social Development Minister Edna Molewa, adding that grants remain the most effective form of poverty alleviation. However, there is a wealth of literature on social grants dwelling on the positive impact of social grants in alleviating poverty in South Africa. Pooled sample analysis – … The child support grant has grown significantly, increasing from just under 22 000 beneficiaries in … South Africa’s Dependency on Social Grants – 3 Years Later. The failure of the South African Social Security Agency (Sassa), which is responsible for the payment and administration of social grants, to act timeously has created a crisis that threatens to deliver grant recipients on a silver platter into the hands of unscrupulous financial services companies. The literature catalogues a range of negative effects potentially attendant to social grants, including creating opportunities for patronage and corruption, distorting markets and creating a range of perverse incentives such as disrupting remittances, disincentivising f work, displacing private savings, and elevating fertility rates. The concrete impacts of such social grants are- 1) Social grants in sort of food subsidy, LPG support, cash grant which benefit the poor to come out of their poverty and help them subsist basic life necessities. What are the weaknesses in the system? Government grants are available for everyone from artists to businesses to biochemists. History of social grants in South Africa with specific reference to the Child Support Grants (CSG) 15 2.1.3. Poverty and inequality in South Africa. The social and economic impact of South Africa’s Social Security System. The majority of cases have been in Gauteng (865) the Western Cape (587) and Kawazulu Natal (443). About 70% of outlays on social grants and 54% of spending on education and health go to the poorest half of the population in South Africa. Social grants are given in a developing economy for the welfare of the small, backward and marginal groups. In November 2011 various news websites carried an article originally authored by the South African Press Agency (Sapa) on teenage pregnancy in Limpopo province. Applicants for social grants must be South African citizens, permanent residents or refugees and currently living in South Africa. Report of Lund Committee on child and family support 17 2.1.6. However, it is the most industrialized, technologically advanced, and diversified economy on the African continent. Executive Summary Social grants in South Africa play a critical role in reducing poverty and promoting social development. “Grants make people lazy and dependent on the government” Landing a government grant is a good deal as you don't have to pay the money back. 702/CapeTalk presenter Redi Tlhabi had an interview with Louise Ferreira, a journalist for Africa Check, on some of the myths surrounding Social Grants in South Africa. Grants make people lazy and dependent on the government. The child grant increases teenage pregnancy. Parents claim grants for children who don’t live with them. In an attempt to minimise the negative economic impacts of Covid-19 on vulnerable households the South African government allocated R50 billion in additional social assistance spending. The economic impact for the poor and most vulnerable is devastating. Confirmation was received from Banking Association of South Africa (BASA) that banks are ready for the payment cycle. businesses in South Africa. Responsibility to distribute grant 17 2.1.5. A total of 44.3% of households in South Africa are receiving at least one social grant, up from 30.8% in 2003, according to a new report by Stats SA. South Africa’s tax buoyancy has declined from 1.37 in 2014 … The study concluded that social grants had negative effects on the incentives of rural households to commercialise their farming activities. A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy. Source: Authors’ calculations using NIDS waves 1 to 4 pooled sample (post-stratified weights). Over 17 million South Africans, one in five, rely on social welfare grants from the state, said Stats SA. South Africa's GDP will take at least five years to recover from COVID-19 impact, says UNDP study. The profile of social classes and factors associated with escaping chronic poverty 36 CHAPTER 3: SOUTH AFRICA IS ONE OF THE MOST UNEQUAL COUNTRIES IN THE WORLD 42 A. South Africa’s social grants 9 3. Aside from social grants there have been steady improvements in access to services such as electricity, water and housing. These weather changes impact on agricultural output and the timing of harvest seasons, thus wreaking havoc on food security and logistical planning. It is 25 days since South Africa began a nation-wide lockdown to contain the spread of the coronavirus. However, a number of these social expenditure programmes have been less effective than they could have been in delivering services to the poorest South Africans. The Covid-19 pandemic has created a much harsher global backdrop for South Africa… The impact of wasteful government expenditure coupled by financial irregularities and corruption became an added burden to the socio-economic dilemma of the state. This dissertation will systematically show that the use of social security as a poverty-alleviating tool is effective given the extent of poverty in South Africa and the limitations on resources. If you're already receiving a social grant or are in the process of applying for one, here's what you need to know. The right to social security 16 2.1.4. Socio-economic impact of gambling in South Africa (2017) Key findings and recommendations Presentation to: ... Gambling and social welfare grants 70,5 29,5% 0 20 40 60 80 Not receiving social grants Receive social grants Percentage ... negative impact of gambling on household welfare, amongst the less affluent. Grants are like putting a Band-Aid on a deep cut that needs stitches. Testing is taking place with over 80,000 individuals examined thus far. 2021 will be much like 2020. South Africa’s social security system, a major monthly income source for over 12-million people, has been playing an increasingly important role in reducing poverty and inequality in the country since 2000, a survey by Statistics South Africa (Stats SA) finds. Descriptive analysis: social grants and the labor market 23 4.1 Data 23 4.2 CSG recipients and non-recipients 24 4.3 Labor force transition matrices 31 5. Our client, a 42-year-old domestic worker, applied to the South Africa Social Security Agency (SASSA) as the mother, legal guardian and primary caregiver of her minor son in order to receive a child support grant on behalf of her son. Applicants for social grants must be South African citizens, permanent residents or refugees and currently living in South Africa. The myth that teenage girls intentionally get pregnant to access child support grants is perhaps the most pervasive and one that has been given added credibility by spurious news reports. The South African government has imposed a number of measures aimed at controlling the pandemic, chief being a nationwide lockdown. This paper aims at analyzing the effects of social policies on income inequalities in South Africa since the 1990s. Qualifying households also tended to pass on the benefits to those that were ineligible and there were multiplier effects on income and welfare in the … This study evaluates the social and economic impact of State Old Age Pensions (SOAP), Disability Grants (DG), Child Support Grants (CSG), Care Dependency Grants (CDG), Foster Care Grants (FCG) and Grants-in-Aid (GIA). Economic Policy Research Institute. The good, the bad and the ugly facing South Africa after lockdown. Disability Grant. “South Africa’s social grants, along with its tax policies and social spending, have been credited with being strongly progressive, helping to raise the income of the poorest by 10 times and to reduce income inequality by a quarter. The seven social grant categories will increase by between 4 and 4.7%. A universal income grant will ensure that all living in South Africa have an adequate standard of living.” Our client, a 42-year-old domestic worker, applied to the South Africa Social Security Agency (SASSA) as the mother, legal guardian and primary caregiver of her minor son in order to receive a child support grant on behalf of her son. The main report pulls together a number of aspects. On paydays hundreds of people gather in towns and that’s when the rules of social distancing are completely forgotten. In South Africa, ... of social grants and unemployment insurance South Africa … Commissioned by the Directorate: Finance and Economics for the Department of Social Development. The number of people receiving social grants in South Africa has increased exponentially over the years. Racial composition of South Africa’s five social classes, 2008 and 2014/15. Foster Care Grant. In an attempt to minimise the negative economic impacts of COVID-19 on vulnerable households the South African government allocated R50 billion in additional social assistance spending. i Declaration Student number: 357-484-86 I declare that POVERTY REDUCTION STRATEGIES IN SOUTH AFRICA is my own work and that all the sources that have been used or quoted from have been acknowledged by means of complete references. The Mercury: “Social Grant System can’t be sustained”, L. Daniels, August 21st, 2006. In 1994 there were about 4 million people receiving grants … Cash grants and free basic services lift the incomes of some 3.6 million individuals above $2.50 a day (PPP). When President Jacob Zuma was delivering the Dr Alfred Batini Xuma Memorial Lecture last week at … Tel: +27114893650. At the time, the stats provided clues about South Africa's economic state and the effects of … War Veteran’s Grant. The nation-wide lockdown has had a negative impact on the revenue of municipalities at a time when the demands on them are increasing. The results show that social grants are well-targeted and have significantly reduced poverty levels in areas with high poverty rates such as the Eastern Cape and Limpopo provinces, among the African population, in female-headed households and in rural areas. ATMs will be restocked in time for the payment cycle which starts on 30 March. Social grants doing more harm than good? History of social grants in South Africa with specific reference to the Child Support Grants (CSG) 15 2.1.3. The effects of climate change are already evident in South Africa and the wider sub-Saharan Africa region, manifesting in more droughts and more intense, but less frequent, rainfall. Pretoria, 24 August 2020 – South Africa’s overall GDP is expected to decline by at … Recent reports show an increase in the number of South Africans who rely on state funds in order to make ends meet. Economic Policy Research Institute. South Africa: Covid-19 and Rural South Africa - The Good, the Bad and the Ugly. The programme is one of the tools we have for addressing a long history of inequality and assisting the most vulnerable people in our country. A few years ago, hippo.co.za wrote an article about South Africans' growing dependence on social grants. Except for the foster child grant and the grant-in-aid, social grants are “means tested”. The economy of South Africa is the third largest in Africa. “The social grants are inadequate to cover basic food, energy sources and transport, as well as the additional cost of complying with hygiene protocols during the pandemic. Social grants remain the most effective form of poverty alleviation in South Africa as millions of South Africans benefit from the social grants administered by the the South African Social Security Agency (SASSA). The media’s focus as COVID-19 has washed over the globe has largely concentrated on … The child support grant has grown significantly, increasing from just under 22 000 beneficiaries in … And so by the time the COVID-19 inflection point arrived, the country’s socio-economic stability was already in a fragile state of affairs. Consumption inequality is very high and has increased since the end of apartheid 43 B. Persons over the age of 75 and war veterans will now receive R1 880, up from R1 800. The state has developed a number of grants for payment to vulnerable members of society like children, the disabled and the elderly to reduce poverty and better manage economic and social risks. 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