Increase in old age, disability grants

Wednesday, February 23, 2011
Chris Bathembu

Cape Town - The State's old age and disability grants will rise by between R20 and R60 to up to R1 160 a month while the child support grant will increase from R250 to R260 in April.

Finance Minister Pravin Gordhan, delivering this year's Budget Speech in the National Assembly, said revisions are also proposed in the means test threshold, which will benefit households with modest incomes that reduce their grant entitlement.

Close to 15 million South Africans receive social grants from the government and the number is expected to increase as an extension was made to the child support grant to cater for older children.

Gordhan said on Wednesday that revisions to the means test threshold were being proposed, which will benefit households with modest incomes that reduce their grant entitlement.

"Social protection also includes unemployment insurance, occupational injury and the Road Accident Fund. Proposals are now well advanced for the alignment and consolidation of these social security arrangements together with the introduction of a mandatory basic retirement plan," he told MPs.

In a country with millions of people dependant on social grants, government projects that the social security budget will grow from R132 billion in the next year to R146.9 billion the following year and up to R171 billion by 2014. Research shows that strong increases in the social protection budget have enabled income support to poor households to be extended sustainably over the past decade, mainly through expansion of the child support grant. While the country's economy continues to grow, government acknowledges that the economic climate remains challenging and employment has not yet recovered.

Gordhan revealed that over R9 billion a year was currently spent on administering the country's "fragmented" social security system, saying an integrated and better coordinated social security system will offer better protection to vulnerable households.

Over the next three years, the South African Social Security Agency (SASSA) will receive R870 million for the implementation of a new grants application process that government hoped will reduce waiting times and reduce fraud.

Indications are that over the past year SASSA reduced its deficit from R884 million to a projected R460 million. It is hoped that the agency will clear its operating deficit in the next financial year.

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