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Covid-19 social distress grants extended until March 2024

Covid-19 social distress grants extended until March 2024

SRD grants will continue to be paid out by the South African government until 31 March 2024, placing further pressure on the country’s already-strained public finances. Social welfare costs already account for over 50% of the national budget.

Covid-19 social distress grants extended until March 2024

To support poor households affected by the pandemic, Finance Minister Enoch Godongwana allocated as much as R36.1 billion in his Budget Speech for the 2023/2024 financial year.

A total of R227 billion will be spent by the South African government over the next three years, primarily to extend the Covid-19 grants.

Godongwana said the grants are the single largest allocation in the government’s additional spending plans for the next financial year, and replacing them without an affordable replacement threatens the South African economy.

Godongwana said National Treasury is working with partner departments to consider options to provide appropriate social protection measures for South Africa’s working-age population.

It may be possible to replace or complement the current Covid-19 SRD grant.

“It will be necessary to balance any permanent increase in expenditures with permanent increases in revenue or reductions in spending elsewhere,” he said.

During a pre-budget press briefing, Godongwana hinted that taxes could be raised to improve or convert the grant into a basic income grant, when asked whether the upcoming national elections affected his decision not to raise taxes.

If there’s more unfunded spending to close that gap, I’m going to raise taxes … like, for argument’s sake, if someone said, “We want to continue with the SRD grant … we want to raise the SRD, or we want to improve it and make it a basic income grant,” you’re also asking me to tax you,” he said.

According to him, the state is constantly discussing options for the grant, and it will make a decision based on its commitment to sustainable public finances.

Compared to last year, the minister allocated R248.4 billion for social grants, an increase of R5.9 billion.Social grants are growing largely due to an allocation of R30 billion used to fund inflation-linked increases.There was a R100 increase in the old age grant and a R105 increase in the disability grant.Child support and foster care grants increased by R60 and R20, respectively.Approximately a third of South Africa’s population will receive social grants in the coming years, up from 18.6 million in the past.

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