The Social Relief of Distress (SRD) grant continues to serve as a lifeline for many South Africans. However, significant underspending on the grant during the 2022/23 financial year has raised concerns, as the country’s high unemployment rate points to an urgent need for social support.
Parliament member, Mazwikayise Blose recently questioned the Minister of Social Development about the R4 billion underspending on the SRD grant.
In response, Social Development Minister Sisisi Tolashe explained that the Department of Social Development, National Treasury, and Sassa are collectively responsible for managing the SRD grant funds.
While there was no mismanagement of funds, Minister Sisisi assured Parliament that steps are being taken to improve future projections and minimise underspending. These steps include refining data collection methods and streamlining application processes.
Reasons for Underspending of the SRD Grant
According to Minister Sisisi, the primary cause of underspending on the grant was the difficulties in accurately predicting the number of beneficiaries that would need the grant.
She explained that the SRD grant was introduced during a unique period of economic distress, and there was limited data to make an accurate projection on the number of people who needed the SRD Grant. The grant was initially rolled out during the Covid-19 pandemic, when lockdowns severely restricted unemployed individuals' access to work.
With regards to the projection teams, given the limited amount of data available and that the grant was new, thus lacking administrative data (1st year of implementation in its current form), the slightly larger margin of error is expected.
Sisisi added that while statistical data is helpful, the limited availability of reliable historical information made it challenging to estimate the number of eligible beneficiaries accurately.
Minister Sisisi highlighted that, due to the fact that the SRD grant was "new" and a lack of administrative data (as it was in its first year of implementation in its current form), a slightly larger margin of error was to be expected. Another contributing factor is the stringent eligibility criteria and the bureaucratic hurdles involved in the application and approval process.
Sisisi explained that Sassa cannot change the SRD grant eligibility criteria to accommodate more beneficiaries, even when funds are available. They added that changes to legislation which could expand eligibility and allow more people to qualify are time-consuming and impractical to implement in the short term.
If Sassa becomes aware of potential underspending it does not have the ability to change legislation, etc to enable more people to qualify. Similarly, DSD while able to amend legislation, this is not a process that can happen within a short space of time.
Minister Sisisi said although underspending is a valid concern, it is important to note that no mismanagement or corruption occurred. They added that projections ell within acceptable levels of error.
No mismanagement of funds occurred. Projections were within acceptable levels of error.
