Basic Income Grant on the cards for South Africa

The National Treasury and the Department of Social Development are investigating the possibility of introducing a universal Basic Income Grant (BIG) for South Africa.

Until it can find the most responsible and sustainable methods of financing this grant, the current Social Relief of Distress (SRD) Grant will be extended for another year in the 2025/26 fiscal year.

The government has been toying with the idea of introducing BIG in South Africa for years.

At the 2022 ANC policy conference, the ANC announced its intention to implement a BIG, financed through a wealth tax, closing tax loopholes, addressing base profit shifting by corporates, and a transactions tax.

President Cyril Ramaphosa reiterated this plan in his 2023 State of the Nation Address, saying work is underway to develop a mechanism for targeted basic income support.

However, these promises of a BIG have yet to lead to any concrete proposals or plans.

Many experts believe the government will use the current SRD grant as a basis for a permanent BIG.

The SRD grant currently acts similarly to a BIG but was introduced as a temporary measure to provide relief to struggling households during the Covid-19 pandemic.

Despite still being considered temporary, this monthly grant has been extended yearly since its introduction. In 2024, it was also increased from R350 to R370 a month.

The 2025 Budget Review, which was published on Wednesday, 12 March, included recommendations that the Select Committee on Appropriations made to the National Treasury on the Adjustments Appropriation Bill.

The Adjustments Appropriation Bill provides for increases or decreases to allocations set out in the main Appropriation Act, including shifts in the anticipated economic classification of this spending.

The committee explained in its recommendation that the National Treasury and the Department of Social Development are still investigating the most responsible and sustainable methods of financing the mooted universal BIG.

However, it said that until these methods are established, it believes the current SRD Grant should be extended beyond March 2025 as a temporary measure to cushion grant beneficiaries in the absence of jobs.

The National Treasury noted this recommendation and confirmed that funding for the Covid-19 SRD Grant will be extended for another year in 2025/26 while the government continues to explore sustainable interventions to address poverty and unemployment. 

“It should be noted that the grant is part of the social wage, which accounts for 61% of consolidated non-interest spending over the medium term,” the National Treasury said.

The 2025 Budget allocated R35.2 billion to extend the SRD Grant until March 2026.

An amount of R35.2 billion is allocated to extend the payment at the current R370 per month per beneficiary, including administration costs.