Wednesday, 23 February 2022

Cape Town: Social grant recipients will heave sighs of relief at the announcement that allocations will from April mostly increase by above inflation rates.

This is a reprieve from the 2021 Budget rates of between 1.0 and 3.4%.

Delivering the 2022 Budget Speech in Parliament on Wednesday, Finance Minister Enoch Godongwana said the Department of Social Development will receive the largest allocation of R58.6 billion over the medium term.

“First, to initiate a new extended child support grant for double orphans. This is to encourage the care of orphans within families rather than foster care. Second, to provide for inflationary increases to permanent social grants.”

From April, old age and disability grants will increase to R1 985 from R1 890 (5%). In the same period, grants for persons over the age of 75 and war veterans will rise to R2 005 from the current R1 910 (5%).

Also with a 5% increase, care dependency will rise from R1 890 to R1 985 (5%). With a 1.9% increment, the foster care grant will see the lowest adjustment, rising from the current R1 050 to R1 070 (1.9%). With a 5% increase, care dependency will go from R1 890 to R1 985 (5%). Child support will increase to R480 from the current R460 (4.3%).

The Minister said the social grants function is allocated R1 trillion over the MTEF period to facilitate access to social grants and welfare services to reduce poverty and inequality, protect children, and empower women, youth and people with disabilities.

Three new allocations are made to social grants, including:

  • R44 billion in 2022/23 to continue the special COVID-19 social relief of distress grant (R350 per beneficiary) for another 12 months.
  • A total of R1.6 billion in the two outer years to initiate a new extended child support grant for double orphans, in order to encourage the care of orphans within families rather than foster care.
  • A total of R13.1 billion in the outer years to offset budget reductions made in the 2021 Budget and provide for inflationary increases to permanent grants.

In the 2022 Budget Review, the National Treasury said the total number of grant beneficiaries will increase by an average annual rate of 1.5%, from 18.4 million in 2021/22 to 19.2 million in 2024/25.

The department said the numbers exclude the 10.5 million beneficiaries of the special COVID‐19 social relief of distress grant in 2022/23.

“Following the once-off allocation of that grant in 2022/23, the function’s baseline will contract by 3% over the period ahead. Over the medium term, conditions for extending this or a similar grant will include improved targeting to ensure that the people who most need this grant can access it, as well as improved linkages with labour market activation programmes.

“The child support and old age grants together account for more than half of total grant expenditure over the MTEF period. These grants will support a total of 17.2 million beneficiaries in 2022/23,” reads the document.

The Budget Review said over the three-year spending period, an annual average of R1.2 billion will be shifted from the Department of Social Development to the Department of Basic Education as responsibility for early childhood development shifts across these departments.

The National Youth Development Agency will receive R1.5 billion to support skills development and youth employment.