Finance Minister Enoch Godongwana said that R284.7 billion has been allocated for social grants in 2025/26.

The minister noted in the 2025 budget that this allocation means that government can increase the following grants:

The old age and disability grants will increase by R130 and therefore recipients will get R2,315 in April 2025.

The child support grant will increase by R30 and therefore recipients will get R560 in April 2025.

The foster care grant will increase by R70 so recipients will get R1,250 in April 2025.

Godongwana said that the Covid-19 Social Relief of Distress (SRD) grant in its current form will be extended by a year to end by March 2026.

He said that government has set aside R35.2 billion for SRD grants.

“The future form and nature of the SRD grant will be informed by the outcome of the review of the active labour market programmes,” Godongwana said.

The minister acknowledged that nearly 28 million beneficiaries will have access to social grants.

Close call

Earlier in the week, Godongwana said that South Africa must make a difficult decision to raise the Value Added Tax (VAT) or reduce the SRD grants.

Godongwana confirmed that a VAT hike would not be made if the SRD grant was scaled down.

“If you allowed me to cut the SRD, I wouldn’t increase anything. I’m faced with increased expenditures which are not in the budget,” he said.

In the 2025 Budget, Godongwana said that government would only increase VAT by 0.5 percentage points in 2025/26 and 0.5 percentage points in 2026/27.

This will bring the VAT rate to 16% in 2026/27.

This essentially means that the minister and Treasury have decided to increase VAT minimally in order to keep the SRD grant going for the foreseeable future.

IOL BUSINESS