Even R350 in support from family will disqualify SA's poor from SRD grants

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Elderly grant recipients living in Alexandra township waiting for their social grant payouts. (Sesona Ngqakamba)
Elderly grant recipients living in Alexandra township waiting for their social grant payouts. (Sesona Ngqakamba)
  • The Department of Social Development told Parliament that it only budgeted for 10.5 million beneficiaries for the Social Relief of Distress grant.
  • However, the department is aware that as many as 13.6 million people are classified as not economically active and 18.3 million live below the poverty line.
  • The department crafted a new definition in the regulations to include all forms of income, "even support from family members".

The department of social development says that anyone who receives R350 in financial support from a family member will be excluded from the social relief of distress (SRD) grant this time around, as it aims to target the poorest of the poor.

The department, which briefed MPs on Friday, said that it was compelled to introduce "a means test" for the grant as they feared their budget of R44 billion would not be sufficient to reach all those expected to apply. The budget can provide a monthly R350 to 10.5 million people people until the end of March next year.

However, the department's data showed that 13.4 million people in South Africa had no income, and 18.3 million people were below the food poverty line.

The R350 SRD grant introduced at the beginning of the Covid-19 pandemic in 2020 was extended to March of 2023 in February by President Cyril Ramaphosa. It was introduced to assist the indigent and unemployed in coping with the economic impact of the Covid-19 national lockdown.

A submission by the department and the SA Social Security Agency (Sassa) said that in order to implement the new means test still under development, a new definition for income was crafted in the regulations to include all forms of income, "even support from family members".

"There is a significant implementation risk in that it has not been done at a large scale before. The threshold for the previous iteration was set at unemployed, which was tested against databases listed above, and the food poverty line if people appealed.

"The new iteration will test everybody against a predetermined threshold. Given the limited budget, for the new iteration this will be set at R350, equivalent to the value of the grant. However, it will be reviewed if the 10.5 million target is not achieved."

READ | Means test for R350 grant could be revised, says social development dept

Minister of Social Development Lindiwe Zulu said as "inadequate" as the R350 grant might be in the face of rising expenses, the grant's popularity showed that it helped many suffering households. 

"These regulations that are applicable to the third iteration of the grant come at a difficult time. The duty to preserve these funds and aspects of the regulations had to be strengthened in fraud protection and ensuring they go to those who they are intended for," Social Development Minister Lindiwe Zulu said. 

The written submission said that the previous iteration of the grant ended in March 2022 with 10.9 million approved applicants and approximately 1 million appeals that still need to be assessed.

"The department will thus be providing the grant to less people in the third iteration than what it did in the second iteration." 

READ | Under new rules, fewer people will qualify for R350 grant

Bank on it

The written submission said once the concurrence was obtained from Finance Minister Enoch Godongwana, Sassa entered into an interim agreement with a few banks to begin the process for means-testing.

"The interim agreements with Absa, Standard Bank, Tyme bank and Nedbank are finalised, with Grindrod and FNB still pending. The means-testing process for the historic period August to November 2021 started on 16 May 2022 , with all response files from banks received except for Grindrod bank.

"The plan is to start the payments for approved reconsideration applications from 7 June 2022. The assessments and payments for the historic period December 2021 to March 2022 will resume after the April and May payments are completed," the submission said.

Postal pains

The submission said the SA Post Office (SAPO) has struggled to render services at their branches and cash pay points. However, Sassa clients could still access their money through the National Payment System (NPS) or bank ATMs.

The submission said 95% of clients use the NPS, 4% use Post Office branches, and only 1% use cash pay points.

"In the second iteration, SAPO implemented a digital card system that will relieve much of the challenges faced by Sassa branches, enabling beneficiaries more options – through merchants – to access their grants. This will continue for all Covid-19 SRD payments routed for payment by Postbank in the third iteration," the submission said.

The Sassa delegation told MPs on Friday that as the SRD grant continues, beneficiaries were expected to provide a formal update through available outlets that they would still need the grant every three months.

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