Caught in the 'black tax' bind and unable to create wealth
Wealth creation is elusive when one earner supports many
A Johannesburg professional's mother stopped speaking to her for months when she could no longer dole out thousands of rands in "black tax" to support her.
"No-one believes me when I say I don't have money. My mother didn't talk to me for a few months and I could feel she resented my child. She just forgot about my child. It was a very sad period," she said.
The woman started paying "black tax" - a colloquial term for financially assisting ageing parents, siblings and other relatives - when she started working as an intern.
A decade later, when her annual salary was at its peak of about R800,000, she
contributed R15,000 a month towards her mother's property bills and household and her siblings' education.
But she dropped the amount to R7,500 last year after she suffered a loss of income and is now contributing R6,000 because of tougher economic times.
She sold her own home to start afresh as her mother refused to move into a cheaper, renovated family property.
Financial experts say that working adults are trapped in the sandwich effect, caught between financially supporting parents, younger siblings and other relatives, and their own children.
This week University of KwaZulu-Natal media and cultural studies graduate Nokubonga Komako released research that found that the age-old cultural practice of "black tax", which has its roots in apartheid, is mainly perceived as a responsibility and not a burden.
However, Komako found that most black South Africans experience financial strain because their families expect the payment.
And economists said more and more families are going to be reliant on this income as the economy slumps.
"From the research conducted, the majority did not mind looking after their family," said Komako. "However, the financial strain came when families expect more than they can afford."
Komako's research - motivated by her brother's financial support of her studies - found that the respondents saw the money as "just something that you must pay".
Nondumiso Ngcobo said "black tax" was a responsibility that she fulfilled without pressure or regret.
"I can't let my late brother's daughter suffer, and my cousin's kids deserve a chance to be better individuals since my cousin can't afford the basics," she said.
But there are elders who realise that paying up every month is a financial burden.
Ladysmith pensioner Lulu Duma refuses financial assistance from her two daughters.
"I am a single mother and worked as a teacher to ensure that my two children were educated. It was tough but I would never use my hardships to get money from them. They must first take care of themselves," she said.
South African Savings Institute acting CEO Gerald Mwandiambira said "black tax" is a misnomer.
"In the African construct of a family, we originally had a common wealth. Families lived together and their wealth was shared. This was disrupted by colonisation and apartheid, which compartmentalised and pulled people apart.
"It was no longer possible to share each other's common wealth. It made it more
expensive to survive. So now people have to spread the available wealth much thinner," he said.
Family responsibility is part of most cultures - but not always as far-reaching.
"In the European or Afrikaner family it's a nuclear family system that includes parents and children. It doesn't go beyond first cousin," said Mwandiambira.
"The tentacles of an African family extend to even fourth or fifth cousins, or even sometimes sharing a surname is enough reason to declare responsibility."
He said it becomes a burden when people don't have the financial literacy to draw the line about what they can afford.
"When someone ends up being indebted, it's not because of the family. In many instances they don't themselves understand the limit of their finances.
"Someone who knows their limit regardless of family pressure will not go over their limit," he said.
Old Mutual head of financial education John Manyike said if the current generation does not save, especially for their own retirement, the "black tax" phenomenon will likely be passed to future generations - and wealth creation through savings will prove difficult.
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