The allocation for the one-year extension of the social relief of distress (SRD) grant has been reduced by R3bn for 2024/25 as the government further tightens its purse strings amid rising spending pressures and weak growth.
The National Treasury has allocated R33.6bn in 2024/25 down from R36bn in 2023/24, as the Treasury and the social development department prepare to amend the qualifying criteria for the grant.
“For the extension of the grant beyond March 2025, the social security policy reforms, together with the funding source, will be finalised,” finance minister Enoch Godongwana said in his budget speech on Wednesday.
The grant, which reaches about 8.5-million beneficiaries, was extended several times until March 2024 thanks to a tax windfall from mining companies that allowed finance minister Enoch Godongwana to pay down debt and provide personal tax relief in 2022.
The monetary allocation of the SRD grant will remain at R350, though fewer individuals are expected to qualify for the grant. The draft amendments published in the Government Gazette come as the Treasury moves to decrease spending amid the rising cost of living and persistent load-shedding.
The draft amendments allow the department to cancel approved applications when beneficiaries do not update 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 April 1, state that if the beneficiary dies “the grant will be paid until the end of the month in which the beneficiary died”.
“Work is currently under way to improve the Covid-19 social relief of distress grant by April this year. National Treasury will work with the department of social development in ensuring that improvements in this grant are captured in the final regulations,” Godongwana said.
The SRD grant was introduced by the government in 2020 to cushion poor households against the hardship caused by the lockdowns it imposed in response to the Covid-19 pandemic.
It was initially intended for unemployed adults and later extended to adults with little or no income.
The grant is widely expected to form the basis of a basic income grant, should it be introduced in the future.
“Any extension of the 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,” the Treasury said in its Budget Review.
Expenditure on social grants (excluding the Covid-19 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.
Increases in social grants include:
- R100 to the old-age, war veteran, disability and care dependency grants. This amount will be divided into R90 from April and R10 October 2024.
- A R50 increase to the foster care grant.
- R20 increase to the child support grant.
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