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Institutionalise and extend Covid-19 grant, says panel of experts

13 December 2021 - 16:56
Social development minister Lindiwe Zulu says expanding social assistance is key to inclusive economic participation, reducing inequality and lifting many out of poverty. File photo.
Social development minister Lindiwe Zulu says expanding social assistance is key to inclusive economic participation, reducing inequality and lifting many out of poverty. File photo.
Image: Gallo Images/Herman Verwey

A more sustainable intervention is needed to provide income support to “chronically” poor and structurally unemployed South Africans, even after Covid-19 lockdowns are lifted.

This is according to a report on basic income support for 18 to 60-year-olds which was launched on Monday by the social development department in collaboration with the International Labour Organisation (ILO) and the UN Sustainable Development Goals (SDG).

The department and the two entities appointed a panel of experts to conduct economic and social research.

Social development minister Lindiwe Zulu said the report was part of an “important” element of the department’s efforts to institutionalise basic income support.

“Owing to the interdisciplinary investments by all our partners in academia, civil society and multilateral institutions, the report provides persuasive guidelines with which we must respond to the questions of the appropriateness and feasibility of extending basic income support to our citizens between the ages of 18 and 59,” Zulu said.

She said the expansion of the social assistance framework was key to common and inclusive economic participation, the reduction of inequalities, and lifting a large number of South Africans out of poverty.

“Implemented side-by-side with employment creation and entrepreneurship support initiatives, the expanded social assistance framework can positively affect an individual’s life as much as it can support households towards the levels of resilience with which they can protect themselves against social ills,” she said.

According to the report, about 70% to 80% of SA’s population lives in precarious and insecure conditions with little prospect of relief in the foreseeable future.

“Consistent with our terms of reference we reviewed the current socioeconomic position of SA for a complete understanding of the plight of income-compromised adults and whether a sustainable system of income support can be implemented to mitigate their circumstances,” the report reads.

“Through our work, we confirm that income poverty in SA is so pervasive that more than half of the households live in poverty, with low incomes also extending into deciles 6 and 7.”

According to the experts, while Covid-19 has worsened some of the conditions most South Africans find themselves in, their evidence indicates that these features are endemic and long-term in nature and have not responded to government interventions to date.

“It is within this context that we examined the appropriateness and feasibility of direct income support for adults who fall outside the existing systems of income support.

“While some form of support exists for children until their 18th birthday, and for adults over the age of 60, no income support exists for adults from the ages of 18 to 59 unless they have a disability,” the research found. 

The experts recommend that the existing Covid-19 social relief of distress grant be institutionalised and form the platform for an expanded system of basic income support which can be improved over time.

“While the social affects are quite moderate for lower values of the grant when introduced at the level of R1,300 per month, poverty measured at the FPL [Food Poverty Line] and LBPL [Lower Bound Poverty Line] is almost eliminated. In these scenarios income inequality also improves dramatically from 0.65 to 0.55.

“While we accept that the widespread income poverty prevalent in South African society cannot be eliminated overnight, we recognise the urgency of the situation and recommend that a policy framework be implemented that places the value of the BIS [Basic Income Support] at the UBPL [Upper Bound Poverty Line] as soon as is sustainably possible.”

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