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R350 Grant Might Become Basic Income Grant In Future

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Experts have called on the government to consider implementing the Basic Income grant as the country struggles to lower its poverty levels. The Special Covid-19 grant is now in it’s second round and will come to an end in March.

When the Special Covid-19 R350 Social Relief of Distress (SRD) grant was first introduced at the beginning of the hard lockdown in South Africa, many saw it as a stepping stone to the introduction of the basic income grant.

The City Press reports that there have been increasing calls for the basic income grant to be implemented.

At the virtual report launch by the Department of Social Development, Wits School of Governance economist and social security expert Alex van den Heever said that 70% to 80% of South Africans lived in dangerous and insecure conditions.

He says that most of these people have no hope of finding financial relief in the foreseeable future, he adds that 12 million people currently live below the food poverty line.

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 aged between 18 and 59, unless they have a disability.

He says that income in the form of a basic income support grant is necessary and that there are no alternative measures that could reasonably address the urgent income support needs of adults.

Recently, the Department also launched a report written by experts in which they described the appropriateness and feasibility of institutionalising basic income support for South Africa.

They have proposed that the government slowly introduce a Basic Income grant for unemployed people.

Van den Heever also says that the number of SRD grant beneficiaries should be increased from the current 9,5 million to 13,4 million initially, and eventually this should be increased to a maximum of around 18,3 million.

“That will be determined by affordability,” he said.

Should the R595 Basic Income grant be implemented it will cost the government R56,2 billion a year for 13,4 million people and R78,8 billion for R18,3 million people.

van den Heever says that these findings will be taken to the Department of Finance as motivation for the implementation of basic income support, based on its necessity and feasibility.

The American credit rating agency, Fitch Ratings says that while they assume the R350 grant will be made permanent, they think it is unlikely that the basic income grant will be implemented given the fiscal constraints.

National Treasury has declined to comment on whether the R350 SRD grant will continue or whether the basic income grant will be implemented.

In response to queries by the City Press, National Treasury said, “This is a decision of government and will probably be announced in the state of the nation address or the budget speech. National Treasury will ultimately find the money if the president says it should do so… Also, Cabinet would need to approve this”.

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