Covid-19 Social Relief of Distress Grants: The case of South Africa

When Covid-19 cases began rising in South Africa in April 2020, the country entered a hard lockdown which resulted in curfews, travel limitations and the closure of restaurants and other public entertainment outlets in an effort to curb transmission. In a country with high levels of unemployment, poverty, and inequality, this worsened an already dire situation.

As part of the government response to the pandemic, a monthly stipend of R350,00 Special COVID-19 Social Relief of Distress Grant (SRD) was implemented, targeted to unemployed people above the age of 18 years-old not receiving any other form of income, including other social assistance/ insurance provisions (R350 equals approximately $24 USD1) (South African Government, 2021a).

The grant, which was instituted in April 2020, was extended twice before finally being terminated in April 2021. Additional measures included top-ups of R250,00 for the Old Age Pension (OAP), Disability Grant (DG), Foster Care Grant (FCG), and Care Dependency Grant for six months from April to October 2020, and a top-up of R300,00 of the Child Support Grant (CSG) for one month in May 2020. A final grant - the Special Covid-19 Social Relief of Distress for Caregivers grant (also known as the CSG Caregiver Allowance) - worth R500,00, was put in place for five months from June to October 2020. The grant was targeted toward adults receiving child support grants on behalf of children in their care (South African Government, 2021a).

Social grants are critical to enable vulnerable people to meet their basic needs, even more so in times of crises. With South Africa’s unemployment rate at its highest in 13 years, and a significant proportion of the youth not in education or training, this small amount of income is still crucial for survival.

 

Socio-economic impact of Covid-19

South Africa implemented a five-tier lockdown strategy, with level 5 being the most drastic in terms of restrictions. While levels were progressively downgraded last year as the economy tentatively reopened, the country returned to Level 4 in June 2020 due to the third wave, and currently sit at level 1 at the current time (September 2021).

When lockdown was first implemented at the end of March 2020, community members and civil society organisations (CSO) rallied. Suburbs and townships formed Community Action Networks (CANs), setting up soup kitchens and organizing food parcel distributions. CSOs too took on the challenge of addressing hunger, although this soon expanded to other needs such as education and healthcare requirements. However, food parcel distribution simply wasn’t enough to meet the dire hunger needs of already food-insecure communities who lost livelihoods due to the pandemic (Seekings, 2020).

Several statistics below illustrate the impact of Covid-19 and the associated lockdown restrictions. They are taken from the National Income Dynamics Study – Coronavirus Rapid Mobile Survey (NIDS-CRAM) (CRAM, 2021), a broadly nationally-representative panel survey of South African individuals. The same people were contacted every few months and asked a range of questions on issues such as income and employment and household welfare, among others. Five of these surveys took place over 2020/2021, and the study is now complete. The data below is taken directly from the 5th and final survey (Spaull, N. et al, 2021), which covered April and May of 2021, unless otherwise indicated.

Hunger

• 35% of respondents reported running out of money for food in the past month
• 14% reported a child going hungry at least once in the past week. (Approximately 1 in 7 households)
• Approximately 10-million people and 3-million children were in a household affected by hunger in the past seven days
• Approximately 400,000 children and 1,8-million household members lived in households affected by ‘perpetual hunger’ (hunger ‘every day’ or ‘almost every day’.)
• Women are much more likely to shield children from hunger than men
• Among those in urban areas, shackdwellers and those in peri-urban areas had the highest rates of reported hunger.

Employment

• Almost 2,2 million people (13% of the workforce) lost their jobs in Q2 of 2020, when lockdown first commenced (StatsSA, 2020c).
• In Q1 2021, the expanded unemployment rate hit 43,2%, the highest it has ever been in StatsSA history (StatsSA, 2021).
• The recovery has been uneven by gender, however, women’s employment in March 2021 remains 8% lower than pre-pandemic levels while men’s employment seems to have fully recovered
• Women have not benefited from either UIF-TERS (Unemployment Insurance Fund) or the COVID-19 SRD at the same rates as men, despite being worse affected in terms of job loss (women make up only about 35%-39% of the beneficiaries of these two grants).

Education

• An extra 500,000 children have dropped out of school during the pandemic. School dropout has tripled from 230,000 prepandemic to approximately 750,000 in May 2021.
• The highest rates of dropout were found amongst the poorest households, those in rural areas and those with high caregiver worry about learners returning to school.

 

Social Relief of Distress grants: Analysis

Overall, almost 10 million applications for the SRD grant were received, with just over 6 million approved for payment, totaling around R24 billion (for reference, the current South African population is around 60 million).

The initial grant of R350 was limited to South African nationals and permanent residents who were not receiving any other social support grant or unemployment insurance. Furthermore, they had to register for the grant online or at a SASSA (South African Social Security Agency) or at a SASSA office, of which there are only a set number. This posed significant limitations in a country where the people most in need of grants often do not have access to mobile phones or computers, cannot afford airtime or data, live too far away from a service centre and/or in an area with no cellphone reception. Oftentimes they cannot afford to take off work to stand in a long SASSA queue for assistance. Finally, the online platforms were all in English, which increased the difficulty in applying for a grant for those not fluent in the language.

An identity number was also required in order to apply for the grant, and claim the grant payments at the Post Office. However, at the same time, Home Affairs Offices shut down or had limited office hours due to Covid-19, making it even more difficult to solve this issue. While the initial ID application is free, a temporary document costs R70 and a replacement R140, additional expenses that many could not afford.

Overall, almost one third of grant applications were rejected, largely due to conflicting information in outdated government databases which falsely showed applicants already receiving another grant (Senona, Torkelson & Zembe-Mkabile, 2021.) Applicants were not given the opportunity to prove otherwise. Further reasons for rejection included having submitted a tax return in the past, or having simply applied for the National Student Financial Aid Scheme. 

Accessing the grant proved another challenge. The grants were paid out via ATMs, certain retail outlets and selected Post Offices with PostBank capabilities. This resulted in long queues on payday, and certain outlets ran out of cash. Those who elected to receive their payments via a bank account deposit with subsequently subject to withdrawal fees and other bank charges. Payments were also inconsistent and there was no set schedule – some people had to wait weeks before their payments were processed, others had their payments skipped or suddenly terminated. This often meant recipients had to make multiple trips, which compounded costs. While people were supposed to receive a text message with a date for payment, this was only a viable option for those actually in possession of a phone (Bam, 2021).

The grant was also exclusionary to many of those in need – asylum seekers and special permit holders only became eligible for the grant after the matter was taken to court and ruled on in September 2020. However, SASSA then had to build a special digital platform to accommodate their identification numbers, and Home Affairs had to verify their migrant status. These processes delayed the issuing of the grants, and by the end of the 2020 this vulnerable group still had not received any financial relief (Senona et al, 2021).

A second vulnerable group excluded from the initial SRD grant were caregivers, the majority of whom are women. This was due to the fact that they were already receiving the CSG Caregiver Allowance which as mentioned ran from June – October 2020. However, once the Caregiver Allowance was terminated on 31 October 2020, they still did not qualify for the Covid-19 SRD Grant. This was incredibly problematic, as over 97% of caregivers are poor women, likely to be unemployed or casually employed without unemployment benefits (Senona et al, 2021.)

Finally, the amount of R350 per person per month was still insufficient to meet basic needs, and lay below the following poverty indicators (StatsSA, 2020b):

• The food poverty line of R585 per person per month. This refers to the amount of money that an individual will need to afford the minimum required daily energy intake.\
• The lower bound poverty line of R840 per person per month. This refers to the food poverty line plus the average amount derived from non-food items of households whose total expenditure is equal to the food poverty line.
• The upper bound poverty line of R1268 per person per month. This refers to the food poverty line plus the average amount derived from non-food items of households whose food expenditure is equal to the food poverty line.

 

Future outlook

Mounting pressure from civil society actors along with the implementation of tighter lockdown restrictions amidst SA’s third wave of Covid-19 led to the reinstatement of the SRD grant in August 2021, set to run until March 2022. This time around the grant does not exclude caregivers, which will go some way in relieving the uneven gender dynamics of grant distribution. 

There has also been a collective, concerted push from civil society organisations over the past year to turn the Special Covid-19 Social Relief of Distress grant into a permanent form of basic income. This message seems to have resonated with some of the relevant government officials – indeed, during her speech announcing the reinstatement of the SRD grant, former Minister of Social Development, Lindiwe Zulu said:

We have also highlighted that the Special COVID-19 SRD grant should ideally be a stepping stone to a Basic Income Grant. We are currently working on the Policy aspects surrounding this, including the implementation and resource mobilisation aspects related to this Grant, working with various stakeholders through a series of consultations and will provide updates on same accordingly (South African Government, 2021b, n.p.).

However, there has been persistent pushback from Treasury, and the new Minister of Finance, appointed in early August 2021, has stated that “handouts” create a cycle of dependency, and that funds should rather be used to upskill unemployed black youth. This “dependency” concern is a common misperception that has repeatedly been proven to be untrue (Chitiga-Mabugu & Mabugu, 2013).

For now, the extension of the grant until next year has provided some welcome relief. The numerous issues associated with the application process and distribution of funds have been well documented, and it remains to be seen whether these problems are ironed out in this second iteration of the SRD grant.

Meanwhile, the calls from civil society to eventually transform the emergency COVID-19 grant into a permanent form of basic income has been receiving much attention in South African media over the past several weeks2, with even the president floating it as a possibility to alleviate the country’s shockingly high poverty levels. Sustained civil society pressure led to the reinstatement of the COVID-19 grant earlier this year - whether they can replicate this success to implement some form of basic income will make a significant impact on the lives of those excluded from the current system of grants.

                                                                                         

References

• Bam, B. (2021, March 23). “New Covid-19 grant, old Sassa problems”. Mail & Guardian. Retrieved from: https://mg.co.za/news/2021-03-23-new-covid-19-grant-old-sassa-problems/
• Chitiga-Mabugu, M. & Mabugu, R. (2013). Are social grants a threat to fiscal sustainability?. HSRC. Retrieved from: http://www.hsrc.ac.za/en/review/hsrc-review-november-2013/social-grants-fiscas
• CRAM. (2021). Coronavirus Rapid Mobile Survey. Retrieved from: https://cramsurvey.org/
• South African Government. (2021a). Social grants - Coronavirus COVID-19. Retrieved from: https://www.gov.za/covid-19/individuals-and-households/social-grants-coronavirus-covid-19#grants
• South African Government. (2021b, August 4). “Minister Lindiwe Zulu: Re-introduction of special COVID-19 SRD grant”. Retrieved from: https://www.gov.za/speeches/minister-lindiwe-zulu-re-introduction-special-covid-19-srd-grant-4-aug-2021-0000
• Seekings, J. (2020). Failure to feed: State, civil society and feeding schemes in South Africa in the first three months of Covid-19 lockdown, March to June 2020. CSSR Working Paper. Retrieved from: http://www.cssr.uct.ac.za/sites/default/files/image_tool/images/256/WP455Seekings.pdf
• Senona, E., Torkelson, E., & Zembe-Mkabile, W. (2021). Social Protection in a Time of Covid (Lessons for Basic Income Support). Black Sash, Cape Town. http://blacksash.org.za/images/0541_BS_-_Social_Protection_in_a_Time_of_Covid_Final_-_Web.pdf
• Spaull, N. et al. (2021) NIDS-CRAM Wave 5 Synthesis Report. Retrieved from: https://cramsurvey.org/wp-content/uploads/2021/07/1.-Spaull-N.-Daniels-R.-C-et-al.-2021-NIDS-CRAM-Wave-5-Synthesis-Report.pdf
• StatsSA (2020b). National Poverty Lines. Statistics South Africa, Pretoria. http://www.statssa.gov.za/publications/P03101/P031012020.pdf
• StatsSA. (2020c). Quarterly Labour Force Survey (Report Q2:2020). Statistics South Africa, Pretoria. http://www.statssa.gov.za/?p=13652
• StatsSA. (2021). Quarterly Labour Force Survey (Report Q1:2021). Statistics South Africa, Pretoria. http://www.statssa.gov.za/publications/P0211/P02111stQuarter2021.pdf

Footnotes

[1] Currency conversion as of September 2021

[2] Learn more at: Fin24, Basic income grant for SA not 'radical' but necessary, says ex Goldman Sachs CEO; Mail & Guardian, Income grant: Big bang for a few rand; Financial Times, South Africa moves closer to basic income in wake of civil unrest; SABC, Ramaphosa hints that R350 grant will be extended beyond March 2022.