Budget2017: Inflationary increase for welfare grants

Author: Nicola Mawson (IOL).

As s government clamps down on spending, welfare grants are only being increased to compensate for inflation.

Parliament The 17 million people who rely on government for welfare grants will have minimal relief from April.

This is because the grants are being increased marginally to compensate for inflation.

Inflation is currently 6.6 percent, down from the 6.8 percent recorded in December.

Presenting his Budget to Parliament on Wednesday, Finance Minister Pravin Gordhan noted social assistance grants provide income support to the most vulnerable in our society.

However, as government clamps down on spending, the grants are only being increased to compensate for inflation.

  • The old age grant will increase by R90 to R1600 for pensioners over the age of 60, and R1620 for those over 75.
  • The disability and care dependency grants also increase by R90 to R1600 a month.
  • Foster care grants increase by R30 to R920 a month.
  • The child support grant increases by R20 to R380 a month.

Social grants account for 94.3 percent of the Social Development’s total budget allocation of almost R160 billion, and the number of those benefiting will continue to grow.

By the end of 2019/20, it is expected that 18.1 million South Africans will receive grants.

The number of beneficiaries receiving the child support grant is expected to grow from 12.3 million in 2017/18 to 12.8 million in 2019/20 as the child population grows and efforts are made to sign up those who are eligible but currently are not receiving the grant, it notes in its Budget vote.

In addition, the number of beneficiaries receiving the old age grant is also expected to grow, from 3.4 million in 2017/18 to 3.6 million in 2019/20, as the elderly population grows.

As a result of these increases in beneficiary numbers and inflationary adjustments to grant values, expenditure on grants is expected to increase at an average annual rate of 8.2 per cent over the medium term, reaching R175.6 billion in 2019/20, it says.

Spending on grants is also expected to increase as the department works towards providing a higher child support grant to orphans who are in the care of extended family members. This will bring the social protection provided to these orphans closer to parity with that of those in foster care, it adds.

These proposed changes to the child support grant are contained in the Social Assistance Amendment Bill, which was submitted to Cabinet for approval in 2016/17 and will go to Parliament in 2017/18.