The paper was co-authored by the IEJ and the Social Policy Initiative (SPI) and published by the Global Coalition for Social Protection Floors.
The emergency Covid-19 Social Relief of Distress (SRD) grant has sparked an intense debate in South Africa over expanding comprehensive social assistance for the working-age population. On one side, the National Treasury, backed by conservative economists and international financial institutions, argues for reducing coverage through strict targeting, conditionality, and automation, in the name of fiscal consolidation. On the other side, civil society groups, labour organisations, progressive political parties, and the Department of Social Development are advocating for a rights-based universal income-support system.
The Case for a Universal Basic Income
South Africa’s unemployment rate stands at a staggering 42.6%, with a significant gap in social assistance for working-age adults. The SRD grant, introduced during the pandemic, provided critical support but has proven inadequate. Currently valued at only 46% of the food poverty line (FPL), its reach has also diminished due to a restrictive means test and high exclusion errors caused by ineffective digital systems.
The underfunding of the grant reflects a macroeconomic framework prioritising austerity over rights, despite constitutional guarantees. Recommendations from entities like the World Bank and IMF have reinforced calls for conditional, limited social protection. For meaningful change, the SRD grant must be transitioned into a permanent basic income grant, pegged to national poverty lines to ensure adequacy and expanded progressively to reach universal coverage.
Key Policy Recommendations
- Consultative Structures: Establish inclusive frameworks involving beneficiaries, civil society, and experts for ongoing policy development and assessment.
- Adequate Funding: Expand social protection using non-regressive financial measures, such as wealth taxes, avoiding VAT hikes that disproportionately affect the poor.
- Digital Safeguards: Ensure transparent, secure, and equitable digital systems to prevent beneficiary exclusion and data misuse.
- Accountability: Strengthen democratic oversight of fiscal policies to align with social protection commitments and prevent undue Treasury influence.
South Africa must pivot to a growth-focused, redistributive economic model to support universal basic income, protecting fundamental rights and fostering economic stability.