New social grant on the cards for South Africa

The door has now been fully opened for the social relief of distress (SRD) grant to be used as a blueprint for a permanent basic income grant in South Africa.

Regardless of when this will be implemented or what form it will take, it has become clear that the SRD grant is likely here to stay.

A policy to introduce a basic income grant is currently in the works, with progress expected as soon as October or November this year.

Efficient Group chief economist Dawie Roodt recently shared his views on the SRD grant following the tabling of Finance Minister Enoch Godongwana’s 2026 Budget.

In this Budget, funding for the SRD grant was extended for the 2026/27 fiscal year, with no more funding allocated over the Medium-Term Expenditure Framework.

This is in line with what President Cyril Ramaphosa announced in his 2026 State of the Nation Address.

“As a transformative instrument to improve the lives of the poorest and most vulnerable people, this grant will be continued,” he said.

“This year, we will redesign the grant to more effectively support livelihoods, skills development, work opportunities and productive activity.”

Introduced in 2020 as a temporary lifeline to struggling households, the SRD grant has been extended every year since.

Roodt said this is not surprising, saying “there’s nothing as permanent as a temporary state expenditure item”.

According to Roodt, this grant is likely to become a permanent fixture of the national Budget, and will be included in state expenditure for the foreseeable future.

“I cannot see how it is possible for the Minister of Finance to stop this Covid grant,” he said. 

“And although officially it’s going to stop next year, I cannot see how that is going to happen. It will become a permanent fixture on the Budget, and next year it will be included in the expenditure as well.”

In the 2026 Budget, the SRD grant was allocated an additional R36.4 billion to extend payments until 31 March 2027. 

Around 7.77 billion people received this grant in 2025/26, with this figure expected to reach 8.21 billion in 2026/27.

The government has long promised to use the SRD grant as a blueprint for introducing a basic income grant in South Africa, with plans already underway.

South Africa’s basic income grant

The 2026 Budget Review included comments from Parliamentary portfolio committees on various budgetary issues, including the SRD grant.

The Standing and Select Committees on Finance tasked the Treasury and the Department of Social Development (DSD) to table, ahead of the 2026 Budget, a comprehensive policy paper on the future of the SRD grant and possible basic income support options.

“This paper should quantify the fiscal costs and macroeconomic effects of alternative grant values and coverage (including values at or above the food poverty line) and set out clear financing options, including progressive tax measures,” the committee said. 

The committee also recommended immediate steps to improve SRD administration and reduce wrongful exclusions.  

In addition, it said the policy should ensure that any move towards a more permanent income-support mechanism is accompanied by a credible funding strategy.

In response, the Finance Minister said the DSD is the lead department in this process, working closely with key partners such as the Department of Employment and Labour, the Presidency and the National Treasury. 

“The extension of the SRD grant for another year until 31 March 2027 was specifically intended to provide government with sufficient income to complete this policy work,” he said. 

“As a result, a paper is not yet ready for tabling ahead of the 2026 Budget.” 

However, he noted that, while no fixed timelines have been agreed on, the intention is to complete the policy refinement before the 2026 Medium-Term Budget Policy Statement, which is usually delivered in October or November.