As global debates on the necessity of a Universal Basic Income (UBI) intensify, South Africa finds itself at the forefront of this critical discussion. Here, the debate has moved beyond theoretical discussions and is now firmly on the policy agenda. The implementation of a Basic Income Grant (BIG) has become vitally important for the country as it grapples with deepening poverty, inequality, and unemployment.
The court case: A crucial moment for social justice
A pivotal legal challenge is now underway regarding the Social Relief of Distress (SRD) grant, a lifeline grant that was introduced during the COVID-19 pandemic to address the urgent needs of millions of South Africans. Initially intended to be temporary, the SRD grant has remained in place as the crisis of poverty, unemployment and hunger persists, leading the government to acknowledge that the grant cannot be removed without a replacement mechanism and that that mechanism should take the form of a BIG.
However, there are significant injustices in the way the SRD grant is currently administered. The Institute for Economic Justice (IEJ) and #PayTheGrants (#PTG) have initiated legal action against the South African government, challenging the exclusionary regulations surrounding the SRD grant. These flaws have left many eligible South Africans without the support they desperately need. This case is not just about addressing those exclusions but about ensuring that any future grant, including the government’s own evolving policy direction towards a more permanent form of income support, does not carry over the same rights violations.
The future of social protection
The government has indicated its intention to evolve the SRD grant into a more permanent solution, with both the President and the Department of Social Development having committed to the introduction of a Basic Income Grant (BIG). This court case is critical to ensuring that the foundational principles of fairness and accessibility are upheld in evolving social protection policy. If the exclusions and shortcomings present in the SRD grant are allowed to persist, there is a real risk that these issues will undermine future social assistance programs.
The legal challenge thus presents a pivotal moment – not only in rectifying current flaws, but in safeguarding the rights of all South Africans in the transition towards a more inclusive and comprehensive system of social protection.
Key legal challenges and demands
The legal challenge brought forth by IEJ and #PTG highlights several critical issues that undermine the SRD grant’s effectiveness and fairness:
- Barriers to access: The SRD grant can only be applied for online, which excludes those without digital access or literacy. This online-only application process disproportionately disadvantages the most vulnerable populations, making it difficult for those most in need to apply [https://www.iej.org.za/wp-content/uploads/2024/02/IEJ-SRD-court-case-policy-brief.pdf].
- Means-test based on all inflows: SASSA’s assessment of ”insufficient means” relies on a means-test that takes into account all inflows into an applicant’s bank account, including irregular or ad hoc payments, loans and even repayments on loans the applicant has extended to others. This overly broad approach to defining income and financial support has unjustly excluded many eligible individuals from receiving the SRD grant. [Read more]
- Inaccurate and outdated verification processes: The reliance on erroneous government databases and flawed bank verification processes has resulted in the exclusion of eligible applicants. These processes are not employed for other social grants, making the SRD grant uniquely inaccessible. [Read more]
- Narrow appeals process: The current appeals process does not allow applicants to submit new evidence, leading to an extremely low success rate for appeals. This severely limits the ability of those wrongly excluded to rectify their situation. [Read more]
- Systemic payment delays and barriers: Although defunct systems like Post Bank and cash send methods were previously significant causes of non-payment, systemic delays persist due to unfit-for-purpose fraud detection and identity verification processes introduced by SASSA. These issues have left many approved beneficiaries without the financial support they rely on, exacerbating their financial instability. In addition, a recent amendment to the regulations allows SASSA to cancel payments pending over 90 days, further compounding the problem and effectively absolving SASSA of accountability for unresolved payment delays. [Read more]
- Unconstitutional retrogression: The failure to adjust the SRD grant value for inflation and the static income threshold, which has not been updated since 2020, represents an unconstitutional retrogression (or rolling-back) of social assistance, because fewer people in need can access the grant than previously could, and because the grant has a lower purchasing power than it previously did. This undermines the principle of progressively realising social rights as mandated by the South African Constitution. [Read more]
- Arbitrary budget caps: The SRD grant is subject to a budget cap, which arbitrarily excludes millions of qualifying applicants from receiving the grant since Regulations are used to keep the number of beneficiaries within a budget which is inadequate to provide for all those who should be receiving the grant. [Read more]
The constitutional and legal framework
The call for an expansive social protection system is deeply rooted in South Africa’s constitutional and international obligations. Section 27 of the South African Constitution is particularly pertinent:
- Section 27(1): “Everyone has the right to access sufficient food, water, and social security, including appropriate social assistance if they are unable to support themselves and their dependents.”
- Section 27(2): “The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of these rights.”
This section mandates the state to take reasonable measures to advance social assistance to those individuals who are unable to support themselves and their dependents. The failure to uphold this commitment, as argued in the court case, constitutes a breach of constitutional obligations.
Additionally, South Africa is bound by international agreements such as the International Covenant on Economic, Social and Cultural Rights and the International Labour Organisation Recommendation 202 (2012). These agreements reinforce the need for comprehensive social protection and a robust social security system. The IEJ and other advocates argue that this means working towards finding ways to advance social assistance which may be in the form of a Universal Basic Income (UBI), and the IEJ believe that this is the fairest and most effective way to give effect to these constitutional rights in South Africa.
The role of the Institute for Economic Justice (IEJ)
The IEJ is at the forefront of this legal battle and the broader fight for economic justice in South Africa. The IEJ’s mission is to advocate for progressive economic policies that address systemic inequalities and promote inclusive growth. The Universal Basic Income Grant (UBIG) is central to this mission, serving as a transformative policy that not only alleviates poverty but also catalyses radical social transformation. The IEJ argues that UBIG can disrupt entrenched economic paradigms, paving the way for a more equitable society by ensuring that everyone has a financial safety net.
Learn more about why South Africa needs a Basic Income Grant
The importance of BIG in South Africa
South Africa’s socio-economic challenges are starkly reflected in the following key statistics:
- Poverty levels: As of 2015, over half (55.5%) of all adults in South Africa were living below the Upper Bound Poverty Line (UBPL), struggling to support themselves. Additionally, 25.2% were living below the Food Poverty Line (FPL), unable to meet basic nutritional needs.
- Unemployment: By the second quarter of 2024, the unemployment rate, including discouraged work seekers, was at a staggering 42.6%. Among those actively seeking employment, 76.2% were long-term unemployed, indicating chronic and entrenched joblessness.
- Working poor: A significant proportion of employed individuals earn incomes below the UBPL, highlighting the prevalence of low-paid, precarious employment.
- Food insecurity: In 2023, more than 23.1% of South African households were food insecure, with many resorting to begging to meet basic needs.
Given these challenges, the implementation of BIG is crucial for several reasons:
- Alleviating poverty and hunger: BIG provides a financial safety net for millions of South Africans living below the poverty line, ensuring they can meet basic needs like food, shelter, and clothing.
- Addressing inequality: South Africa is the most unequal society in the world. BIG can help to redistribute wealth in our economy by leveraging taxes which wealthier people contribute to more, to provide a guaranteed income to the most marginalised.
- Economic stability and growth: By boosting the purchasing power of the poor, BIG can stimulate demand for goods and services, leading to economic growth, and increased employment, particularly in impoverished areas.
- Social security and dignity: BIG offers a sense of security and dignity, allowing individuals to live with greater autonomy and reduced dependency on irregular income sources.
- Empowering vulnerable groups: BIG is particularly crucial for women, who are often disproportionately burdened with unpaid care work, limiting their access to income compared to men.
The Universal Basic Income Coalition (UBIC) and its key demands
The Universal Basic Income Coalition (UBIC) is a collective of South African civil society organisations, including the IEJ, dedicated to advocating for the implementation of a Universal Basic Income (UBI). UBIC envisions a universal, unconditional, and dignified basic income for all South Africans aged 18-59.
The coalition’s key demands are as follows:
- Basic income as a universal guarantee: UBIC demands that all individuals aged 18-59 in South Africa be eligible to receive a basic income, so that no one falls through the cracks in the social safety net.
- Progressive realisation of universality: While immediate universal implementation may be challenging, UBIC calls for a binding plan to progressively expand social assistance to achieve universal coverage within a clear timeframe.
- Unconditional basic income: The coalition insists that the basic income should be free of any conditions tied to recipient behaviour, such as job-seeking requirements or restrictions on how the income is spent.
- Redistributive basic income: UBIC advocates for the basic income to be financed through progressive taxation on the wealthiest, ensuring that it effectively reduces inequality and contributes to economic growth.
- Dignifying basic income: The income should be set at a level that allows recipients to meet their basic needs, ideally pegged to the Upper Bound Poverty Line (UBPL) and adjusted for inflation over time.
- Individual basic income: UBIC calls for the basic income to be provided to individuals rather than households to avoid exacerbating intra-household inequalities and to ensure each adult has control over their own financial resources.
- Accessible, equitable, and dependable basic income: The income support system should be designed to be easily accessible to all, with minimal barriers, clear communication, and reliable payment schedules.
- Basic income as part of a broader well-being policy framework: UBIC emphasises that the basic income should be integrated into a broader policy framework that includes job creation, social protection, and other complementary services to maximise its impact.
[Read the UBIC position paper here]
South Africa’s global position on basic income
South Africa is increasingly recognised on the global stage as a key player in the debate on Universal Basic Income. While many countries are still in the early stages of exploring or piloting basic income schemes, South Africa’s experience with the SRD grant and its broader social assistance framework positions it uniquely to implement a national-scale UBI.
The COVID-19 pandemic highlighted the urgent need for comprehensive social protection measures worldwide. In South Africa, this has accelerated discussions about the feasibility and necessity of a Universal Basic Income. The national elections earlier in 2024 brought this issue to the forefront, with growing support from political figures, including President Cyril Ramaphosa, who has voiced support for such a system. This potential shift aligns with global movements advocating for UBI as an intervention to mitigate increasing economic disparities.
South Africa’s leadership in this area could set a precedent for other countries, especially in the Global South, demonstrating how a developing economy can implement a Universal Basic Income to address deep-seated inequality and foster inclusive growth.
The road ahead and the court case
The legal battle spearheaded by the IEJ and #PTG marks a significant challenge to the South African government’s administration of the SRD grant. The case is set to be heard in the Pretoria High Court on the 29th and 30th of October 2024, where the IEJ and #PTG will present their arguments against the government’s defenses. This case could set a crucial precedent for the future of social assistance in South Africa, potentially leading to broader reforms in the country’s social grant system.
South Africa stands at a critical juncture in its social protection history. The ongoing legal challenges, including the SRD grant case brought by the IEJ, highlight the urgent need to address flaws in the country’s social assistance system. While the SRD grant was initially introduced as a temporary measure, it has become a de facto permanent lifeline for millions, but deep systemic issues have been revealed in its implementation. The coming months will be crucial as the government navigates these challenges and works toward ensuring that future social assistance programs are fair, inclusive, and effective in meeting the needs of all South Africans. For more information, you can read the full details in the referenced articles: