Researchers advise social development department to increase child support grant

It would take increasing the child support grant (CSG) to the upper bound poverty line (UBPL) to possibly see an end to child food poverty in South Africa.

If it's increased to match the food poverty line (FPL), child food poverty can be “substantially reduced” from 33% to 25%.

This is according to researchers from the Children's Institute who authored a report, “Reducing Child Poverty: A review of child poverty and the value of the child support grant”, on behalf of the department of social development. The Children's Institute is based at the University of Cape Town.

The report was in response to social development minister Lindiwe Zulu's acknowledgment in 2020 of “the pressing need to review policy around the CSG”, according to the department.

The report was commissioned a year later and its findings presented on Friday at the Nelson Mandela Foundation's offices in Houghton. Its aims to:

• assess the state of child poverty in SA;
• document the policy process in the development and expansion of the grant;
• review the value of the CSG in the “context of child poverty and the cost of raising a child”; and
• identify options of increasing.

The report also calculated the budget implications of increasing the grant and assessed each option “based on cost, impact for children as well as police, legal and administrative implications”.

Researchers Katharine Hall and Paula Proudlock presented the findings and proposed modelling options to increase the grant. Debbie Budlender is also one of the report's authors.

They reflected on the three official poverty lines published annually by Stats SA and the poverty rates between men, women and children.

The country's FPL currently sits at R760, the lower bound poverty line (LBPL) at R1,058 and UBPL at R1,558.

The R500 child grant is provided to nearly 13-million children and is the lowest state paid grant after the social relief in distress (SRD) grant.

Researchers found that “poverty rates are higher for women than men and higher for children than adults” and that “child poverty remains racially and geographically distorted”.

“African children, and those living in former homelands, are most likely to be poor. While the national food poverty rate was 33% in 2019, it was 37% for African children and 51% for African children living in rural areas in the former homelands.

“Of the nearly 8-million children in the former rural homelands, just over half (4-million) are in food poverty and three quarters (6-million) are below the UBPL,” researchers found.

They also looked at modelling options to increase the value of the grant, using the current CSG value and uptake as a “baseline for comparison”.

The grant currently reaches 66.3% of all children, or 12.9-million, and 34.7% of all households, or 5.9-million.

They found that if it is increased to the FPL, it would reach 69% of all children, or 13.4-million, and 40% of all households, or 6.8-million.

Raising it to match the LBPL would reach 72.5% of all children, or 14.1-million, and increasing it to match the UBPL would ensure it reaches 76.4% of all children, or 14.9-million.

On the budget impact of these proposed increases, researchers said: “The 2022/2023 CSG budget was R77bn [and] increasing it to the FPL for all poor children would have required a further R23bn. Increasing it to the UBPL would have added R161bn to the existing budget.”

The report suggested a phased approach to increasing the grant, saying that “phasing in the increase using a top-up mechanism will avoid a one-off 'shock' to the budget”.

It also suggested implementing it for children under six in the first year and then reaching full coverage by “increasing the age cohort by three years in each of the following years”.

Using this method would require an additional budget allocation of R10bn in the first year, R17bn the following year and finally R24bn. This is if the grant is raised to the FPL.

Raising it to the UBPL would require an additional R50bn in the first year, R85bn in the second year and R124bn in the third.

Receiving the report, Zulu praised the “hard work” of the Children's Institute researchers and assured it would not become like the many reports that often gather dust.

“This work falls under a very important unit in the department of social development,” she said.

“Understanding [the report] has made it easy to dance with the minister of finance ... and other cabinet members who have to appreciate this,” she said in reference to the battle her department would have in motivating for the proposed models.

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