South Africa

South Africa’s Covid grant set to be hiked to R370 

Finance Minister Enoch Godongwana announced that – starting in April – the government’s Social Relief of Distress (SRD) grant is set to be hiked by R20 per month.

Godongwana told the National Assembly on Wednesday that the Social Development Minister would soon be publishing a “comprehensive social security programme” for public comment.

This plan would include regulation changes, including changes to the SRD grant, pending approvals to regulations.

“I am pleased to say that, subject to the finalisation of the comprehensive social security plan, we will increase the R350 to R370 by 1 April this year,” he said.

“That is part of the progressive realisation of the basic rights of our people.”

In his 2024 Budget earlier this year alluded to “improvements” being made to the grant at the start of the new financial year.

“Work is currently underway to improve the Covid-19 Social Relief of Distress Grant by April this year,” he said.

“National Treasury will work with the Department of Social Development in ensuring that improvements in this grant are captured in the final regulations.”

“These improvements will be within the current fiscal framework. For the extension of the grant beyond March 2025, the social security policy reforms, together with the funding source, will be finalised.”

The R350 SRD grant was introduced during the Covid-19 pandemic as a temporary lifeline for struggling households and has since been extended every year.

Technically, the SRD grant has not been officially extended beyond March 2025. However, the National Treasury has provisionally allocated funding for the grant through March 2027.

The introduction and consequent extension of this grant led many to believe it would be used as the basis for introducing a permanent BIG.

The ruling party has mentioned the implementation of a BIG for years, but little action has been taken to realise their promises.

President Cyril Ramaphosa previously said that the SRD Grant will be extended and amended to form part of the BIG.

In an interview with SABC News earlier this month, Godongwana said the question is not whether South Africa should have a BIG but rather how it will be funded.

He said that, if properly managed, South Africa can afford to roll out a basic income grant.

However, many are concerned about how the government would be able to afford this grant, as the 2024 Budget revealed a deficit of R347 billion in 2023/24, and the government’s debt continues to grow.

An Intellidex study from July 2022 found that, while the grant will improve inequality, “any attempts to expand the budget with the status quo environment will damage debt dynamics further”.

It will increase the unsustainability of the budget and shorten the runway to a fiscal or economic crisis. The study estimated that the cost of a BIG could range from R20 billion a year to R2 trillion. 


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