The Social Relief of Distress (SRD) grant is the only financial support available to unemployed adults living in South Africa. With an unemployment rate of 32.6%, the SRD grant is seen as a critical intervention for people without work.
The South African Social Security Agency (Sassa) revealed that approximately 8,5 million people are benefiting from the SRD grant. However, Sassa is not using all the money it receives from the government to provide financial support to unemployed people.
In the past financial year, a staggering R4.3 billion meant for social relief of distress grants was returned to the National Treasury. This development raises critical questions about why these funds, intended to alleviate the financial strain of eligible beneficiaries, went unclaimed.
An amount of R4.3 billion was returned to the National Treasury due to the lower-than-expected uptake of the SRD Grant.
The Department of Social Development (DSD) says the primary reason for the significant return of R4.3 billion was the lower-than-expected uptake of the SRD Grant. In other words, the government expected more people to benefit from the grant and budgeted for this, however, the number of SRD Grant applications received was less than expected.
Despite its potential to assist those in need, a considerable portion of the allocated funds remained untouched.
The DSD believes the intricate assessment process for SRD Grant applicants plays a pivotal role in the returns. Recipients are evaluated monthly to ensure they meet all the eligibility criteria for the grant.
How Sassa Determines Who Receives SRD Grant
The process of eligibility verification is done in collaboration with various state entities, government departments and banks.
Sassa collaborates with the Department of Home Affairs to verify the identity numbers and citizenship status of applicants. Additionally, the applicant's bank account details are shared with the Department of Treasury, and subsequently with the bank chosen by the applicant for income verification.
Other government entities including the Unemployment Insurance Fund (UIF) and National Student Financial Aid Scheme (NSFAS) are contacted to ensure SRD grant applicants are not double dipping in government support.
If an applicant has more than R624 in their bank account their application for the SRD Grant will be rejected.
While some grant applicants may initially be approved for grant payments, If financial circumstances improve to the extent that they no longer meet the eligibility criteria, they will not receive grant payments
Sassa also revealed that some people no longer submit applications for the SRD.
All applicants for the SRD Grant are assessed on a monthly basis. When their financial situation improves and no longer meet the eligibility criteria or they voluntarily stop applying for the grant, there are significant savings on the fiscus.
While the returns of money to the treasury indicate efficiency in the assessment process and a commitment to fiscal responsibility, they also highlight potential challenges in reaching the intended beneficiaries.
Understanding the reasons behind the lower uptake is crucial to refining the SRD Grant programme and ensuring that deserving individuals receive the financial support they require.
SRD Grant Extension
In November 2023, Finance Minister, Enoch Godongwana announced the extension of the SRD grant which was previously set to end in March of 2024. The recent extension allows beneficiaries can collect their SRD grant until March of 2025.This extension is set to cost R34 billion.
The news of the grant's extension came as a surprise to many, considering that the minister had previously warned about rising debt levels, which were exerting pressure on government services, leading them to be overshadowed by debt servicing costs.
President Cyril Ramaphosa says the grant has provided support for millions of vulnerable people and kept them out of extreme poverty.
"The special SRD Grant known as the R350 grant, which we introduced in 2020, has kept millions of people out of poverty and continues to provide much-needed support for those who are unemployed."