Massive changes in unemployed people’s grants: Informal sector to be forced to contribute to SASSA

The Department of Social Development plans to make a number of changes to South Africa’s grant system in the coming year  – including a formal move towards a Basic Income Grant.

The changes are outlined in the department’s annual performance plan for 2022/2023 which was published this week.

Basic Income Grant

The severe impact of the pandemic on the economy and its ability to create jobs in South Africa has raised new questions about the reliance on economic growth to address unemployment and poverty, and revived interest in the prospect of a basic income grant as another lever to tackle poverty and inequality, and engender a more inclusive growth path, the department said.

It now plans to initiate a feasibility assessment of a basic income grant during this financial year.

“The Department will continue to contribute to processes that stimulate discussions around the resource modelling and implementation of the basic income grant (BIG),” minister Lindiwe Zulu said in an accompanying statement.  “The BIG promises to be a major policy engagement that we will be part of during the 2022/2023 financial year,” she said.

Mandatory contributions and other changes 

The department aims to complete the extensive policy proposals on social security reform, including:

• Extending social assistance coverage to all,
• Introducing mandatory contributions for retirement, death and disability,
• Creating a platform for informal sector workers to participate in social security coverage
• Developing an appropriate institutional architecture for a coherent, efficient and sustainable social security system in the long term.

These policy proposals will be consolidated into a single Green Paper during this year, and subjected to extensive consultation with all stakeholders, the department said.

“Because of their wide scope and the significant impact they are likely to have on every single person in the country and the economy, it will be essential to consult widely on all aspects and develop a social compact between business, labour and civil society regarding the proposals.”

Extended coverage 

“Ongoing policy development will continue, particularly address very specific social security coverage gaps in relation to pregnant and lactating women, and institutional mechanisms and the cost thereof, to crowd in all government interventions to address the social protection needs of children, using the social grants as an entry point,” the department said.

New laws 

The department aims to amend the Social Assistance Act, SASSA Act and the Fund-Raising Act to address existing gaps and inconsistencies in the legislation.

Specifically, the amendment to the Social Assistance Act aims to introduce a provision to empower the Minister, with the concurrence of the Minister of Finance, to augment the child support grant benefit provided to orphaned children residing with relatives.

This is intended to reduce the demand on the foster child system, by reducing the number of children entering the foster care system purely to access the foster child grant due to the large differential in value between this grant and the child support grant, it said.

The Act will also enhance access to administrative justice, by reducing the time it takes for appeals to be adjudicated from 180 days to 90 days. The Department expects the workload of the Tribunal to increase once the Act is passed since all the appellants will be able to come directly to the Tribunal without first approaching SASSA.

When proclaimed, the Act will also pave the way for the establishment of an Inspectorate for Social Assistance, which is tasked with ensuring and promoting the integrity of the social assistance framework.