MIDTERM BUDGET | R33bn set aside for social relief grant to be extended to 2025

01 November 2023 - 14:09
South Africa has nearly 19-million people who rely on social grants. File photo.
Image: ANTONIO MUCHAVE South Africa has nearly 19-million people who rely on social grants. File photo.

Finance minister Enoch Godongwana has set aside R33.5bn to extend the social relief of distress grant (SRD) until 2025, but nothing beyond that period.

This is according to the National Treasury’s medium-term budget policy statement that was tabled by Godongwana in parliament on Wednesday.

The SRD grant, worth R350 per month for recipients, was introduced at the height of the Covid-19 lockdown in 2020 to cushion unemployed people who were not part of the social security net from adverse economic conditions.  

Godongwana announced the extension to end of March 2025 amid a strong push by several civil society organisations and labour unions for the grant to be made permanent or be improved towards a basic-income grant.

In the February budget, Godongwana had only extended the SRD grant until March 2024.

On Wednesday he reiterated the message he made in the February budget that a “comprehensive review” of the government’s entire social security system was required.

“The grant was introduced to support low-income individuals affected by the lockdown. No policy decisions have yet been made on the grant and no funding solution has been agreed to. For this reason, the 2023 budget reiterated that any extension of the grant, or any replacement thereof, needs to be funded by a new revenue source or reprioritisation of other spending items,” reads the statement.

It stated that current “fiscal space” was too constrained to extend the SRD beyond 2025 without additional funding.

“Government proposes that the fiscal framework make provision for funding for the grant for 2024/25. Beyond this, a comprehensive review of the entire social grant system by the department of social development and the National Treasury is required.”

The government’s spending on the social wage will take up 61% of its total revenue in the next three years, including spending on education, health, housing and public transport systems.

Social grants will cost R945bn over the medium-term expenditure framework or the next three years.