The Social Impact of Reform Options in South Africa: The Universal Child Support Grant and The Basic Income Grant

The coverage gaps within South Africa’s social security system combined with the structurally low rate of take-up of the Child Support Grant (CSG) underscore the need for comprehensive reform. The nature of structural unemployment in the face of a changing global economy that marginalises unskilled workers expands the necessary scope of a social safety net. Not only do children, retirees and the disabled need social protection—millions of potential workers are vulnerable to unemployment and the resulting impoverishment.

Using a household-level micro-simulation model, this paper evaluates the social impact of reforming the social security system through the provision of universal grants. In light of the low take-up rates of the CSG, the paper begins by analysing the impact of the extension of the CSG with a universal grant. The second main part of the paper analyses the social impact of a Basic Income Grant.