Cape Town – In South Africa, social grants have surged over the past few decades, with the number of recipients now far surpassing the number of taxpayers, according to a report.
The 2025 Budget allocates R284.7 billion for social grants, including increases in the old age and disability grants, child support, and foster care grants.
Additionally, the Covid-19 SRD grant will be extended to March 2026, with R35.2 billion allocated.
The grant increases this year include:
- Old age grant will increase from R2185 to R2315
- War veterans grant will increase from R2205 to R2335
- Disability grant will go up from R2185 to R2315
- Foster care grant rises from R1180 to R1250
- Care dependency grant will increase from R2185 to R2315
- Child support grant will go up from R530 to R560
- The grant-in-aid will increase from R530 to R560
“As announced by the President in the State of the Nation Address, the SRD will be used as a basis for the introduction of a sustainable form of income support for unemployed people.
“The future form and nature of the SRD will be informed by the outcome of the review of active labour market programmes. This is expected to be completed by September 2025.
“The truth is that ours is one of the most comprehensive social safety nets among emerging economies. This reflects our commitment to addressing poverty and inequality, while keeping our spending sustainable,” Finance Minister Enoch Godongwana said while delivering the Budget Speech in Parliament on 12 March.
According to Daily Investor, despite these increases, the number of social grant recipients has risen by 1,020% since 1994, placing significant strain on the country’s finances.
“This places an unsustainable burden on the fiscus and can only be reduced by creating a climate for higher economic growth and more job opportunities,” the report quoted Momentum’s Head of Financial Planning and Advice, Bertie Nel, as saying.
While the grants provide relief for low-income households, the shrinking tax base — just 1.6 million individuals contribute 76.2% of personal income tax — raises concerns about sustainability.
“The number of grant recipients continues to grow as unemployment and poverty rates rise, with 28.3 million people projected to receive a grant in 2024/25. This means that for every taxpaying citizen, four are reliant on state support,” Policy Writer and political analyst Tara Roos said, according to the report.
Tara emphasised the need for structural reforms, job creation, and economic growth to reduce the dependency on social grants.
“What is required is a concerted effort to stimulate economic growth – through structural reforms, improved infrastructure, job creation, and a focus on expanding the economy’s productive capacity.”
Follow African Insider on Facebook, Twitter and Instagram
Picture: X/@tndaba
For more African news, visit Africaninsider.com
Compiled by Betha Madhomu
