Govt ‘must seriously consider extending SRD grant or start a basic income grant’

Cyril Ramaphosa. Image credit: Facebook/MyANC

The government must give “serious consideration” to extending the R350 COVID-19 social relief of distress (SRD) grant or establishing a basic income grant (BIG).

This is according to the governing ANC, which concluded its extended National Executive Committee (NEC) Lekgotla on Monday (6 September).

‘Significant demand’ for income support

In his closing address to the Lekgotla, President Cyril Ramaphosa said there was “significant demand” for the government to continue providing income support measures for South Africans living in poverty.

“Further work needs to be done towards the achievement of comprehensive social security to ensure that all South Africans live in comfort and dignity,” Ramaphosa said.

“This necessarily requires better alignment and linkages between social security policies and labour market policies so that beneficiaries of social support can move more rapidly into employment.

“Subject to long-term affordability, serious consideration should be given to extending further support to the unemployed and to those who are structurally marginalised, possibly in the form of an extension of the COVID-19 SRD grant, targeted food-poverty-line support or a basic income grant. [The government] should consider a combination of all these with mass employment.”

SRD grant reinstated

Ramaphosa announced the reinstatement of the SRD grant in July. It will run until March 2022 after the government ended its first phase in April this year.

The government first introduced the grant in May 2020 to shield society’s most vulnerable from the COVID-19 pandemic’s impact. Nearly seven million applicants have been approved to receive the grant in the second phase so far.

The NEC Lekgotla’s decision could mean a further extension of the grant beyond March 2022 or an introduction of a basic income grant, which may be universal or targeted.

The proposal for a BIG gained momentum last year, with Social Development Minister Lindiwe Zulu publishing more details about it in a green paper on social security in August.

However, she has since withdrawn the paper, citing a “misunderstanding” about its proposals. Her Department will re-publish it once it has clarified its contents, she explained.

The paper had argued that a universal BIG would be the “fastest route” because it would reach almost all South Africans “in a matter of months.” It cited how the government was able to reach around five million people with the SRD grant.

“While a means-tested BIG may prove onerous since it is only provided to those with incomes below a certain threshold, a universal benefit is one that would be provided to everyone within a particular category,” the paper argued.

“Microsimulation for universal income support at the level of the food poverty line suggest that the financial cost will be approximately R200 billion and will require a 10-percentage point increase on income taxes.”

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