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An economic recovery program, to be presented by President Cyril Ramaphosa this week, indicates that the government is considering introducing a basic income grant.
The document of more than 100 pages, which has been viewed by Bloomberg, indicates that the introduction of a basic income subsidy could cost R243 billion a year and would require tax increases.
In July, Social Development Minister Lindiwe Zulu said that South Africa will introduce a universal basic income subsidy as part of a series of packages to help the country’s unemployed.
Zulu did not provide details on how the grant would be financed or its size, but said in a virtual press conference that it would be paid “after October.”
This ad follows a parliamentarian instructions last week in which the Social Development Department noted that the demand for income support will go beyond the six-month period covered by the R350 Covid-19 Social Relief of Distress (SRD) grant.
The pandemic prompted President Cyril Ramaphosa to announce a temporary surcharge on those grants of up to R300, including a R350 unemployment grant, in late March.
The Department of Social Development said that to address this, it is working on a policy proposal on the viability of income support for South Africans between the ages of 18 and 59 who do not have income support.
“This is the result of the introduction of the special Covid-19 SRD grant that has revived the discussion on the feasibility of a Basic Income Grant (BIG) as recommended by the Taylor Report in 2002,” he said.
The ANC has previously said that it will also look at the feasibility of introducing a basic income grant as part of a series of outcomes decided by its National Executive Committee (NEC).
According to a document seen by Bloomberg, the ANC proposes to pay a monthly grant of R500 for those ages 19 to 59 who are not normally eligible for other aid it would cost the state R197.8 billion a year.
Between 50% and 60% of the money could be recovered by applying additional taxes to those who have jobs, he said.
Grant extension
A group of more than 80 civil society groups has asked the government to extend and increase both the Social Distress Relief (SRD) grant R350 Covid-19 and the caregiver grant to R585 per month until the country has
a comprehensive guaranteed basic income plan.
The group said the SRD grant has brought millions of previously excluded people into the social security system, providing crucial support to millions directly and indirectly benefiting many more.
The job losses have hit low paid workers, women, informal workers and those in rural areas the hardest, and the main applicants for the Caregivers grant have been women, he said.
“Without immediate intervention, these benefits will end at the end of October, causing a humanitarian crisis with approximately 6.8 million people sunk below the food poverty line. Therefore, these two subsidies must be urgently extended. “
Based on available estimates and assumptions of 5.6 million and 7.1 million respectively, the extension of the SRD grant and the Caregiver grant to R585 per month will cost a combined total of R37 billion, the group said.
“All available information clearly suggests that the government has decided not to extend the subsidies at the end of October. The Government’s decision to end the relief measures is irresponsible and reprehensible given the socio-economic realities of our country. This decision must be reversed. “
The group asked the government to:
- Extend both the SRD grant and caregiver allowance for at least five months until the end of the financial year (March 2021).
- Increase SRD Grant and Caregiver Grant Grant to Food Poverty Line of R585 per month.
- Reassess the criteria for accessing the SRD grant to support more people and resolve administrative issues urgently.
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