Government Hits Potential Financial Roadblock For SRD Grant

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The National Treasury of South Africa has been hinting that it may hit a financial wall when it comes to disbursing the Social Relief of Distress (SRD) grant. The grant has been a lifeline for millions of South Africa's poorest citizens, with the grant's payout amount recently gaining an increase.


The National Treasury of South Africa has recently been hinting that it may have to scale back on the Social Relief of Distress (SRD) grant. 

The government department could potentially no longer be financially viable enough to continue disbursing the SRD grant (also known as the R350 grant). 

For millions of citizens across South Africa, the SRD grant has been a leg of support when it comes to surviving poverty and unemployment, especially after Covid-19, which is one of the main reasons the grant was implemented. 

Recently, the income threshold for the SRD grant has been gazetted to be increased to the food poverty line, going from R350 to R624, thus allowing more people to apply, qualify and receive some financial support. 

The long-time discussion of implementing a permanent Basic Income Grant (BIG) also recently became a reality, meaning it would provide income support for individuals between 18 and 59 years old who are struggling and don't have any social assistance. 

South Africans are now impatiently waiting for the changes that come with both grants to officially take flight.

However, although these promised changes are somewhat welcomed, the National Treasury reminds South Africans that these plans require funding, which the country may not have. 

While the recipients of the original SRD grant are grateful for whatever financial support they can get, the threshold increase (to R624) would be even more of a godsend. 

Living only on R350 a month is not enough, especially as South Africa grapples with a high cost of living.

Although the implementation of a Basic Income Grant would definitely assist in alleviating poverty, the amount of money it would cost the economy to sustain it could range from R20 billion a year, to R2.5 trillion a year. 

National Treasury has suggested that the SRD grant was unsustainable as there are other matters that it would rather be budgeting for, such as public employment programs and managing debt, says Carol Paton, a Fin24 journalist. 

In response to the growing calls for the official threshold increase and the BIG, the Minister of Social Development, Lindiwe Zulu stated that although they are currently working on making the SRD grant’s increase possible, the Department currently cannot afford it and will have to find the funds, which could put strain on Treasury and the National Budget. 

In order to provide the grants to South Africa's poorest citizens, "solutions" such raising taxes, increased borrowing and reducing public expenditure may have to be implemented.



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