The country’s Finance Minister, Enoch Godongwana, has said that the Covid-19 social relief of distress grant (SRD Grant) will continue until March 2025, while it considers social security policy reforms and a funding model.
The minister said that R34 billion had been allocated to extend the grant by another year.
“Over the medium term, a provisional allocation is retained while a comprehensive review of the entire social grant system is finalised. The 2023 Budget indicated that the Covid-19 social relief of distress grant was only funded until March 2024.
“Government proposes that the fiscal framework make provision for funding for the grant for 2024/25. Beyond this, a comprehensive review of the entire social grant system by the Department of Social Development and the National Treasury is required,” Godongwana said.
The Treasury said over the 2024 medium‐term expenditure framework (MTEF) period, 61% of consolidated non‐interest spending goes to the social wage – combined public spending on health, education, housing, social protection, transport, employment, and local amenities.
“Of this amount, R945.9bn will be spent on social protection transfers, including the old-age grant, the child support grant, the disability grant, and the Covid‐19 Social Relief of Distress Grant,” it said.
According to the Treasury, the social grant baseline included inflation‐linked increases in 2024/25 and 2025/26.
“The 2019 MTBPS noted that by 2040/41, social assistance beneficiaries – excluding the temporary Covid‐19 social relief of distress grant – were projected to increase to 22.5 million, necessitating spending on social grants amounting to 3% of gross domestic product (GDP) annually.
“This is in line with current grant spending, excluding the temporary grant. If that or a similar type of new grant is made permanent, beneficiaries are projected to expand from 27.3 million in 2023/24 to 40.4 million in 2040/41, which will cost 3.8% of GDP in 2040/41 and require a corresponding permanent source of funding, such as additional revenue measures,” the department said.
The minister said the health sector was aiming to maintain service delivery amid budgetary constraints.
“While additional funding is provided to cover wage increases, baseline reductions are being implemented as part of fiscal consolidation. To minimise negative effects, the sector will need to improve efficiency in areas such as overtime payments, medical supplies and security services, and to delay infrastructure projects.”
“To address funding fragmentation for oncology services, allocations will be shifted from the national health insurance grant to the national tertiary services grant.
“A single grant is also proposed to consolidate the existing personal and non-personal services components of the national health insurance indirect grant. Funding is also redirected towards the Office of Health Standards Compliance to strengthen the Health Ombud,” the minister said.