Register now for Fin24 Dashboard and get access to portfolios, watchlists, financial comparison tools, and a whole lot more to help you achieve your financial goals.

Data provided by McGregor BFA
All data is delayed
Loading...
Where am I? Home
 
Prices are delayed by 15min.
Join the Fin24.com conversation about JSE-listed stock by using every time you tweet.

SA world's biggest welfare state

Feb 21 2010 15:06 Svetlana Doneva

Related Articles

World's 'biggest welfare state'

Budget 'neglected graft'

Budget in a nutshell

Gordhan lifts govt spending

Job creation promises 'faltering'

Tito: Consolidate social grants

 

Top Stories

Xstrata shuts furnaces to aid Eskom

Feb 13 2012 12:15

Miner Xstrata says it has brought forward maintenance on two furnaces to assist Eskom to save power.

SA economy adds 80 000 jobs in January

Feb 13 2012 10:43

Although jobs were created, the economy is still 420 000 jobs short of the peak employment level before the 2009 global financial crisis, says Adcorp.

Greece at last approves austerity measures

Feb 13 2012 07:58

Greek lawmakers have approved a new round of drastic austerity measures after a long day of street battles between police and protesters left dozens injured.

 
Share Share line Print

Johannesburg - Social grant expenditure is estimated at R89bn in the current fiscal year, a figure large enough to prompt some commentators to call South Africa the "biggest welfare state" in the world.

The 2010/11 allowance for social grants represents a 12% increase year-on-year.

State pension, disability allowances, child support, foster care, care dependency, war veterans and grant-in-aid number the available grants in the country.

Johannesburg - Social grant expenditure is estimated at R89bn in the current fiscal year, a figure large enough to prompt some commentators to call South Africa the "biggest welfare state" in the world.

The 2010/11 allowance for social grants represents a 12% increase year-on-year (y/y).

State pensions, disability allowances, child support, foster care, care dependency grants, war veterans and grants in aid number the available grants in the country.

The state pension, available to South Africans over 60, increased 7% y/y to R1 080 per month.

The same amount is paid in a monthly disability grant, available to adult female South Africans below the age of 59 and under-62 males. Applicants for these grants have to provide a medical certificate and not be maintained at a state institution.

The child support grant, worth R250 per month, increased just 4% over the past year.

Interestingly, Finance Minister Pravin Gordhan decided in last week's National Budget to extend this grant to include 18-year-olds, up from its previous age limit of 15. The additional cost to the state of this extension is R12.2bn.

To qualify for this grant, both applicant and child must be South African residents. Applicants may not request grants for more than six non-biological children. Children cared for by state institutions do not qualify.

The foster care grant allows foster parents R710/month - a 4% increase on 2009/2010 levels.

Dependency ratio 'unsustainable'

Additional grants include the war veterans' grant, aimed at disabled South Africans over the age of 60 who fought in the Second World War or the Korean War. This grant has a monthly value of R1  100, a 7% increase on last year.

The care dependency grant is for parents who care for children with a confirmed permanent and severe disability. The grant is worth R1 080/month, up 6% from last year.

Finally, the grant in aid is for older citizens who need full-time attendance by another party due to mental or physical disability. This grant is worth R250/month, up 4% from last year.

A treasury representative said grant increases come into effect on March 1. Applicants can qualify for more than one grant at a time.

News agency Sapa cited economist Mike Schüssler as being critical of the grant system.

"Look at South Africa's dependency ratio - it's three people to one taxpayer and it's unsustainable," Schüssler reportedly said.

Andile Sokomani from the Institute of Security Studies said that the extent of state support is unlikely to discourage low-income earners from being self-reliant.

"That danger is not real at this point," said Sokomani, a senior researcher in corruption and governance at the Sub-Saharan non-profit organisation.

"Nearly half of the South African population is living on under $1/day, but only half of those people are receiving monetary support from the government."

Sokomani estimated that about 12 to 13 million South Africans are reliant on social grants.

He added that the government is attempting to approach social welfare from a sustainable perspective, opting to build skills and protect basic health, as opposed to merely resorting to hand-outs.

- Fin24.com

 
 
Comment on this story
5 comments
Add your comment
Comment 0 characters remaining
Facebook still a closed book in China
Feb 08 2012 16:59

Mark Zuckerberg wants to ''friend'' China's massive market but how far is he prepared to go, and against what competition?

NicolaaSmith

What would happen if Greece leaves the European Monetary Union What would happen if Greece leaves the European Monetary Union The Euro would become a foreign currency like the US Dollar in Greece. Very little would actually change. It would be illegal for the Greek monetary authority to overprint a... Read their blog...

Recently updated
Podcasts
The Sishen saga

Legal expert Peter Leon on the increasingly complex legal wrangle over the Sishen Iron Ore mine. Time: 8:17 Listen Here...

Before you list

Is the clarion call of the JSE calling? Listen to Fin24’s expert panel discussion before you list your small business. Time: 17:29

Compare and Buy

Compare and apply for hundreds of financial products from many suppliers.

Credit cards Medical aid Current accounts Think Money

Money Clinic

Money Clinic Do you have a question about your finances? We'll get an expert opinion.
Click here...

Loading...