Scores of people queue outside the South African Social Security Agency building in the Capricorn district of Limpopo to collect their grants. Picture: ELIJAR MUSHIANA
Scores of people queue outside the South African Social Security Agency building in the Capricorn district of Limpopo to collect their grants. Picture: ELIJAR MUSHIANA

Despite the tough budget environment, the Treasury has protected welfare grants from the effects of inflation, in line with the government’s commitment to protect SA’s most vulnerable citizens. Most grants will increase by an average of 5% in 2019.

One in three South Africans is currently the recipient of a welfare grant, which reach 17.6-million people — considerably more than the 16-million people who have jobs.

The government’s spending on social grants is projected to rise from R162.6bn in 2019/2020 to R202.9bn in 2021/2022, growing at an average rate of 7.6% a year over the medium-term expenditure framework. Over this period the number of social grant recipients is expected to rise from 17.6-million people to 18.6-million.

The vast majority of these grant beneficiaries are children: the child support grant, which will rise from an average R405 a month in 2019r to R425 a month in 2019/2020, currently reaches 12.5-million children.

Recipients of the old-age grant, which reaches 3.5-million beneficiaries, will get an extra R85 a month on average during the year, to take their grants to R1,780, and to R1,800 for those older than 75.

The war veterans and care dependency grants will also increase by an average of R85 a month, rising to R1,800, while the care dependency grant rises by a similar amount to reach R1,780.

The foster care grant gets a relatively modest 4.2% increase in 2019, despite new laws proposing higher grants for children who have lost both parents, being delayed.

It rises R40 to an average monthly value of R1,000. The Social Assistance Amendment Bill is intended to improve the social protection of orphans and relieve pressure on the foster care system, but has yet to be processed by parliament. The Treasury said it has consequently shaved R1bn off the social protection budget between 2019/2020 and 2020/2021.

The Treasury said it expected grant administration costs, which include the costs of the services provided by the SA Post Office, to grow from R8.4bn in 2018/2019 to R8.8bn in 2021/2022, an average annual increase of 1.8%. “Future savings are expected as pay points are consolidated and more recipients are paid through the national payment system,” it said in the Budget Review.

The administration costs of providing grants at pay points, such as supermarkets, are about 10 times higher than through the banking system, according to the Treasury’s chief director for health and social development, Mark Blecher.

The Treasury continues to provide funding for early childhood development (ECD) through a ring-fenced grant administered by the department of social development. The ECD conditional grant will support about 60,000 poor children and upgrade between 600 and 800 ECD centres over the next three years. The budget allocation for the grant rises from R518m in 2019/2020 to R553m in 2020/2021, and to R593m in the outer year.

kahnt@businesslive.co.za