The number of unemployed young people with tertiary qualifications seeking access to the social relief of distress grant has increased by nearly 20% in the past five months.
Figures released by the department of social development during a parliamentary portfolio committee meeting on Wednesday painted a grim picture of the face of unemployment in SA.
South Africa’s ‘temporary’ relief grant is costing the country R2.7 billion a month
More than 716,000 graduates apply for R350 grant.
Roughly 8 million grant applications were approved for the social relief distress grant (SRD) in January alone, says the Department of Social Development.
“As of the end of January, the South African Social Security Agency (Sassa) received over 13.5 million applications for the SRD. Of this number, between 7.4 million and 7.8 million clients are approved every month,” said the minister of social development Lindiwe Zulu.
At R350 a grant, and 7.8 million recipients, this equates to R2.7 billion spent from the national budget to assist cash-strapped South Africans every month through one of the many initiatives built into the overall social wage.
In terms of social security, more than 25 million South Africans receive some form of income support. According to the department of Social Development, around 60% of the government’s budget is spent on social wages.
Other initiatives are currently in place to also assist with free housing, utilities, education, disability and health.
During a parliamentary committee meeting, the minister Lindiwe Zulu said, in response to concerns over late payments in recent months, that all payments and statements are now up to date and valid.
As far as payments are concerned, about 95% of approved applicants were paid for the early months. Subsequently, this coverage dropped to about 90% in August 2022. We experienced a further drop to 85% in the more recent months,” said Zulu.
Over recent weeks, the SRD grant has become a particularly sore point for economists and analysts alike – noting that it is simply unsustainable given the economic status of the country.
The SRD grant was initially introduced in 2020 as a temporary measure to assist households in dealing with the pressures of the pandemic – it has now, however, become a likely permanent feature of the social wage.
In president Cyril Ramaphosa’s latest State of the Nation Address (SONA), he mentioned that the grant would continue to be extended.
This sentiment echoes the fiance minister, Enoch Godognwana, who, in late 2022, during his medium-term budget, announced that it would extend until March 2024.
The continuation of the grant is placing increasing pressure on the national budget, reported Momentum Investments.
As a result of the budget being stretched thinner by each month, the Bank of America suspects that the government will be forced to stop extending the grant and link other grants to inflation.
Who can qualify
In August 2022, the department gazetted changes to the regulations governing the payout of the R350 grant.
The threshold for the means test income was raised from R350 to R624 per month, which was the food poverty line.
Previously, those with an income of more than R350 a month were ineligible to receive the grant. However, with the modification, the bar was raised to R624, resulting in an increased number of people who could qualify for the grant.