Govt considering basic income grant, job seeker allowance to help close poverty gap

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Treasury has commissioned research from UCT on options to close the poverty gap.
Treasury has commissioned research from UCT on options to close the poverty gap.
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  • National Treasury has commissioned research from the University of Cape Town to consider ways of closing the poverty gap.
  • The research considers interventions such as the continuation of the R350 grant, the introduction of a basic income grant and the extension of the presidential employment programme.
  • The researchers are also considering a "Brazilian" model for social grants for poor households and families, according to a Treasury official.

National Treasury has commissioned research that looks into introducing a basic income grant, or continuing the R350 social relief of distress grant, among other measures to potentially close the poverty gap in the country.

Treasury official Dr Mark Blecher briefed the Select Committee on Appropriations on Wednesday on these and other steps being taken by government, but more specifically in the short term, on the special appropriations bill to make available funding linked for settling unrest claims, as well as social relief.

When it comes to a long-term solution for South Africa's poverty challenge, Blecher said that research has been commissioned from the Southern Africa Labour and Development Research Unit at the University of Cape Town. The unit, which has done work on social grants before, is looking at several options to reduce the poverty gap.

The unit is considering several options - these being the continuation of the R350 or social relief of distress grant, the introduction of a basic income grant as well as considering a 'Brazilian' model of social grant which is directed to the poorest households or families, instead of to individuals. Similar grants are in place in Mexico and the Philippines, Blecher explained.

Treasury has also asked the unit to consider the extension of the presidential employment programme and a job seeker allowance. These options are being modelled and a report is due soon, he said. The Presidency is doing its own work on an anti-poverty strategy, he added.

Following the unrest in July as well as the implementation of lockdown level 4 restrictions, government decided to reintroduce the social relief of distress grant to support households with no income as a result of the Covid-19 pandemic.

In the previous iteration of the grant, there were about six million beneficiaries.

Blecher said with the second iteration - which will be rolled out until March 2022 - it is anticipated 9.4 million will be able to draw from the grant. Currently caregivers who draw the child support grant will also be able to apply for the social relief of distress grant.

Most recently, President Cyril Ramaphosa said that nearly 13 million applications had been received, and 8.3 million applications approved.

The total allocation of R26.7 billion will cater for people in distress and R500 million will go toward the South African Social Security Agency (Sasria) to enhance its system.

Blecher said that the allocation would largely be funded by tax overruns, particularly corporate income tax. Tax revenue for the first five months of the year is R70 billion above the target. About half will go toward the special appropriations bill, which also makes available R3.9 billion for state insurer Sasria to pay out unrest claims. The remaining monies will be used to pay down debt, Blecher said.


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