At the beginning of this year, President Cyril Ramaphosa indicated that the government wants to change and expand the Social Relief of Distress (SRD) grant to form part of a basic income grant (BIG). The Department of Social Development is pushing for the introduction of a permanent BIG.
The SRD grant of R350 a month was introduced during the Covid-19 pandemic as a support mechanism, initially for the unemployed and then to include adults with little or no income. It was supposed to be a temporary measure but has been extended several times.
On Wednesday, Finance Minister Enoch Godongwana said the government has provisionally allocated funding for the SRD until March 2027.
National Treasury has allocated R33.693 billion to the SRD grant for 2024/25. This is some R3bn less than the R36.07bn allocated for 2023/24 in last year’s Budget. The 2024 Budget Review, however, revised the SRD expenditure for 2023/24 to R33.893bn.
The provisional allocations for the 2025/26 and 2026/27 financial years are R35.169bn and R36.756bn, respectively.
But Godongwana was silent on how or when the SRD grant will be transformed into a BIG.
“National Treasury will work with the Department of Social Development in ensuring that improvements in this grant are captured in the final regulations. These improvements will be within the current fiscal framework. For the extension of the grant beyond March 2025, the social security policy reforms, together with the funding source, will be finalised.”
The “improvements” to which Godongwana referred are proposals to amend the qualifying criteria for the grant. It is expected that the amendments will reduce the number of people who will qualify for the grant.
The draft amendments will allow the Department of Social Development to cancel approved applications when beneficiaries do not update their personal and banking details within 90 days of being notified to do so, and “any monies due will be forfeited to the state”.
The draft amendments, scheduled to take effect on 1 April, state that if a beneficiary dies, “the grant will be paid until the end of the month in which the beneficiary died”.
In the 2024 Budget Review, Treasury states that any extension of the SRD grant, or any replacement thereof, needs to be funded by a new revenue source or reprioritisation of other spending items. “Government is still discussing options for a replacement grant and the balance between policy options to support higher employment.”
National Treasury expects that grant beneficiaries, excluding those receiving the SRD grant, will increase from 18.8 million in 2023/24 to 19.7 million in 2026/27.
There are some 8.5 million SRD grant beneficiaries.
Expenditure on social grants, excluding the SRD grant, will increase from R217.1bn in 2023/24 to R259.3bn in 2026/27 to keep pace with inflation and increase access for the eligible population, Treasury said.
