The battle for the future of the R350 grant


First published by Business Day on 31 March 2022.

With the National State of Disaster ending imminently, there is a practical and ideological conflict playing out at the heart of Government, over whether all of the most vulnerable people in South Africa should receive social assistance to meet their basic needs.

This conflict is visible in the draft regulatory framework which will govern the provision of the social relief of distress (SRD) grant beyond the state of disaster. Below is a summary of the Institute for Economic Justice’s comments on the regulations.

In the President’s State of the Nation Address last month, two announcements had particular importance for the millions of South Africans shut out of employment and in need of social assistance.

First, the extension of the Social Relief of Distress grant (SRD—also known as the “COVID-19 grant”, or simply the “R350”) until March 2023. Second, the imminent end to the National State of Disaster imposed during the pandemic, reiterated in an address on 22 March 2022.

The connection between these announcements might not be obvious, but together they have sent officials at Treasury, the Department of Social Development (DSD) and the South African Social Security Agency (SASSA) scrambling. 

That’s because the SRD grant has so far been implemented under the National State of Disaster. New regulations need to be adopted by Parliament in order to transition the grant under the auspices of the Social Assistance Act. This needs to happen fast. DSD is under pressure to finalise these changes. While this is necessary to ensure beneficiaries continue to receive their entitlements, it severely constrains the ability of the public to comment on and participate in the process. 

This process has also exposed fundamental tensions between the different visions for social protection held by Treasury, and the Department of Social Development, and their respective Ministers.

While Treasury has grudgingly gone along with the President’s announcement of the time-limited extension to the SRD grant, they have effectively imposed their own conditions on how DSD can administer it. They have done so by allocating the bare minimum amount of funding which would allow the grant to continue to be paid only to the same number of people who have received it in the past, at its current level, which has not even been adjusted for inflation. They have also indicated that continued funding for the grant after March 2023 is by no means guaranteed. 

These conditions have complicated and confused the process of inserting the SRD grant into the permanent social assistance framework. DSD and SASSA have recently released drafts of the amended regulations, as well as a draft “Procedure Manual”, which will govern how SASSA administers the grant.

These documents reflect the practical and ideological conflict playing out at the heart of Government, over whether all of the most vulnerable people in South Africa should receive social assistance to meet their basic needs. They show that ending the State of Disaster is not straightforward. Nor can it be seen as a declaration of victory over the pandemic, when our slow-moving crisis of poverty has yet to reach its peak.  

The IEJ’s concerns with the draft regulatory framework—expressed in verbal and written submissions to DSD – boil down to three main points.

  1. It’s a lucky dip: Some people who need (and qualify for) the grant will just…miss out

In the new procedure manual if your income is below the food poverty line (FPL) of R624 you qualify for the SRD grant on the basis of having “insufficient means”. An estimated 15 million people are living below the FPL—determined as the income level you need to buy enough food. This corresponds almost exactly to the number of applicants for the SRD as at February 2022, totaling 15.15 million. Yet the grant has so far been paid to only 10.5 million people. Research suggests that up to one third of applications were rejected erroneously, due to SASSA’s use of incorrect or out-of-date databases to verify eligibility (for example, UIF and SARS databases which incorrectly list people as being employed or having other forms of income). 

The cost of providing the R350 to all those with incomes below the FPL has been estimated at R71 billion. However, despite the data on the number of people who likely qualify, Treasury has only allocated R44 billion, which would only cover the number of people who have already received the grant—10.5 million, with no provision to cover those who have had their applications rejected unfairly, or those who might fall below the FPL in the next year. 

Both the draft regulations and the Procedure Manual include clauses that say that DSD can only provide the grant within available funding, and that once funding is depleted, DSD will be forced to stop providing the grant. 

Here we clearly see the contradiction between DSD’s policy position, which is to pay the grant to everyone living below the FPL, and Treasury’s position, which is to arbitrarily cap the number of recipients at 10.5 million, regardless of whether more people qualify for and need this assistance. 

If you are within the lucky first 10.5 million to have your application approved, great! If you are not… there is no help for you. 

We have submitted to DSD that, in our view, these provisions allowing the grant to be arbitrarily capped would not sustain a legal challenge. They discriminate between equally eligible applicants. We have called for them to be removed, and for the government to meet its obligation to provide social assistance to all those who need and qualify for it, including into future years.

  1. Vulnerable people may be coerced into work

The draft regulations stipulate that a person doesn’t qualify for the SRD grant if they “unreasonably refuse to accept employment or educational opportunities”. This is potentially dangerous and harmful to vulnerable grant applicants. We note however, that mention of this condition is not included in the Procedure Manual—is that because Treasury wants it in the framework but DSD doesn’t?

It is a fundamental principle of fair and functioning labour markets, as well as basic rights, that workers must be able to refuse work. If workers are unable to refuse work, this gives predatory employers license to engage in exploitative behavior.  

This clause has been inserted into the regulations based on the fallacious and prejudiced assumption that people who receive a grant will be disincentivised to seek work opportunities.  

There is no evidence to suggest that a person living below the FPL, who receives temporary assistance of R350 per month (totalling a maximum possible income of R973 per month), would be disincentivised to seek work or educational opportunities. This person will still be living in poverty—below the upper-bound poverty line of R1335—and well below the National Minimum Wage which amounts to roughly R4500 per month.

Thus this clause in the draft regulations runs the high risk of distorting the labour market and encouraging exploitation, for no evidence-based policy purpose. It should be removed from the regulations. If this is not done, DSD at the very least would need to define what constitutes an “unreasonable” refusal to accept work and educational opportunities, and to elaborate on how this clause will be implemented. 

  1. There is still a high risk of unfair exclusions 

Applications for the SRD grant on the grounds of insufficient means can only be made electronically. Although there will be assistance to navigate electronic systems, the nature of this assistance is unclear, including whether people will need to travel to access it. This introduces a digital divide—disadvantaging those who cannot access or use electronic systems (for instance due to cost, connectivity, or English and digital literacy).

Likewise, the Procedure Manual seems to suggest (though clarity is lacking) that the SRD, if approved on the grounds of insufficient means, can only be paid into a bank account in the recipient’s name. If this is the case, it discriminates against those who, for many reasons, may not have their own bank account—and this is likely to include a disproportionate number of women.

One possible reason for this condition is that DSD and SASSA are placing a high emphasis on their ability to verify applicants by accessing their bank account records. In fact, even though the SRD will be approved for three months at a time, SASSA has the power to access recipients’ bank accounts (as well as aforementioned databases) every month, to check if they are still eligible, and suspend payments if there are “suspected irregularities”.

This is unreasonable surveillance of beneficiaries, and likely to cost the taxpayer as much, if not more, than it saves. Asking people to reapply every three months is in itself onerous, but the monthly verification process will result in unfair exclusions, especially when it uses inaccurate databases, many of which are updated every two months. This reveals a level of distrust and suspicion towards grant applicants who have been shut out of economic participation due to South Africa’s structural economic conditions.

We believe these unreasonable conditionalities and mechanisms of exclusion remain in place due to the pressure from Treasury to reduce the official number of eligible recipients. 

The 2002 Committee of Inquiry into Comprehensive Social Security found that South Africa’s social safety net has a “very loose weave”. As the political fight to save the SRD grant continues, not much has changed in that regard.   

Kelle Howson is a social security and workers’ rights research consultant with the Institute for Economic Justice.