Basic Income Grant: Briefing and Economic Feasibility

Social Development

12 November 2002
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Meeting report

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
13 November 2002
BASIC INCOME GRANT: BRIEFING AND ECONOMIC FEASIBILITY

Chairperson: Mr Saloojee (ANC)

Documents handed out:
Briefing by the BIG Coalition on the Taylor Report
Presentation by Black Sash
Presentation by the Community Law Centre
Presentation by Economic Policy Research Institute
Research Review on Social Security Reform and the Basic Income Grant for South Africa (pdf format)
Presentation by ACESS
Presentation by Ms Lundi Rasmeni (Appendix 1)
Presentation by the Federal Council on Disabilities (Appendix 2)
Report of the Committee of Inquiry into a Comprehensive System of Social Security (Taylor Report: Transforming the Present Protecting the Future) [link to May 2002 documents on Social Development website]

SUMMARY
Representatives of a number of civil society organisations, including members of the national Basic Income Grant (BIG) Coalition, briefed the Committee on aspects of the Taylor Report related to the introduction of a universal basic income grant. Presenters made a forceful case for government commitment to the implementation of a basic income grant, and requested more expansive public hearings on the issue early in 2003. Members of the Committee responded with questions regarding the cost and effectiveness of the proposed grant, and critiques of the arguments presented vis-à-vis existing poverty alleviation programmes.

MINUTES
Four representatives of the BIG Coalition briefed the Committee in succession: Ms Karen Kallmann of the Black Sash, Mr Sibonile Khoza of the Community Law Centre at the University of the Western Cape, Mr Neil Coleman of the COSATU Parliamentary Office, and Mr Douglas Tilton of the South African Council of Churches. Ms Kallmann presented a general overview of current social grants, highlighting the inadequacies and fragmentary nature of these income supports. Mr Khoza discussed the constitutional imperatives relevant to social security and how these would be met by the introduction of a comprehensive BIG. Mr Coleman related to the Committee the background of the Taylor Report, its developmental definition of social protection, and the interventions identified by the Taylor Committee. Mr Tilton addressed some of the main objections to the notion of a BIG, as well as alternatives, and described how the government might move forward.

For details of the BIG Coalition presentation, please see the attached briefing document.

Discussion
Mr Masutha (ANC) asked if there was any real space for the questions and comments of Committee members in this presentation.

Mr Coleman (COSATU) explained that, following each presentation, there would be an opportunity for members to ask questions and make comments.

Mr Da Camara (DP) stated that the Democratic Alliance agrees with COSATU on this important issue, but asked about the relationship between the child support grant (CSG) and the BIG. Will the CSG be continued, or will the BIG eventually replace it?

Mr Coleman answered that, in the BIG Coalition platform, the partner organizations state that no South African should receive less than what they did in terms of social grants prior to the phasing in of the BIG. The CSG will be much higher by the time the BIG is introduced. The BIG should also be indexed to take account of inflation.

Ms Chalmers (ANC) noted that the problems around means testing were well recognized, but suggested that, in the case of the BIG, it would still be necessary. She asked where the claw back will occur.

Mr Coleman responded that every South African will receive the BIG, which will be clawed back through the tax system. This should be a progressive process, in which the poor will receive the full benefit, while the grant will be gradually returned through rising tax rates for middle- and upper-income earners.

Mr Tilton (SACC) added that the South African Revenue Service (SARS) would be the agency determining how to claw back.

Mr Mbadi (UDM) said that, in the deep rural area that he represents, many households are headed by young people, who need support. There should be sustainable support for young people to till the land.

Mr Tilton acknowledged that the BIG is not a "magic bullet." It will not solve all of the causes of poverty. Access to land is one component of the poverty problem, and separate mechanisms should be put in place to address it.

Ms Gandhi (ANC) asked whether the BIG really addresses the fundamental issue of inequality. For example, in India, there is a lot of poverty, and despite rising food production, hunger remains because much of that food is produced for export.

Mr Tilton explained that the redistributive impact of the BIG will depend on the financing mechanism. By funding it through the tax system, the BIG will act in a progressively redistributive manner. Insofar as the BIG will spur broad-based consumer spending, it will also have a favourable impact on local economies, especially those in the deep rural areas.

An ANC member noted that the Taylor Report was not only about a universal BIG. Government wanted to look at a comprehensive social security system. Mr Coleman himself has acknowledged that this must be a component of a package—including health, nutrition, moves toward free education, water, and electricity, all areas where the government has made substantial progress. The latest adjustments in the Medium-Term Budget Policy Statement (MTBPS) have increased food security in South Africa. Are these not moves toward a comprehensive social security system? The Department of Social Development (DSD) is also establishing a new social security agency. The member asked why civil society was concentrating on the BIG.

Mr Solo (ANC) stated that the problem of management efficiency is significant, and asked to what extent government and civil society might be able to work together toward achieving the objectives of the Taylor Report?

Mr Coleman replied that the BIG Coalition is not arguing that the government is not moving forward. In some areas, especially health and water, there has been enormous progress, and the coalition does regard these as integral to a comprehensive social security package.

Mr Khoza (CLC) said that the current services provided by the government are fragmented. A BIG system would represent a coordinated effort to fill the gaps and act as a complement to existing services.

Mr Coleman noted expressed his concern that the abdication of responsibility by some civil servants must be dealt with, since civil servants and private institutions have in many cases failed to create effective distribution systems. The abolition of means testing, the development of electronic information systems, and the establishment of a new national social security agency will all be beneficial moves in this regard.

Briefing by Economic Research Policy Institute
Dr Michael Samson of the Economic Policy Research Institute discussed the economic underpinnings of the argument in favour of a BIG. Dr Samson sought to answer three major questions:

(1) How effective is the basic income grant in addressing poverty?

(2) How will the basic income grant affect growth, development and job creation?

(3) Is the basic income grant affordable?

With respect to the social impact, Dr Samson used household surveys and micro-simulation models to evaluate the poverty impact of different policies, and concluded that South Africa's social security system can at best reduce poverty only by a third. The basic income grant would enable the social security system to eliminate destitution and three-quarters of the poverty gap, freeing an additional 6.3 million people from poverty.

With respect to the economic impact, Dr Samson concluded that the BIG is developmental and supports economic growth. The government's HRD strategy identifies how poverty and inequality undermine human capital development and thus constrain higher incomes; the BIG provides income security, promoting productive risk-taking and helping people to break out of the poverty trap. The grant also supports improved nutrition, health, education, and productivity.

Dr Samson explained how poverty acts as a tax on workers, and how the BIG reduces that tax and supports both higher wages and job creation. He also explained that the macroeconomic impact of the BIG supports investment and growth. The government's Medium-Term Budget Policy Statement (MTBPS) recognises that "a more equal distribution of wealth favours higher rates of growth." Providing all South Africans with an economic stake improves social stability and reinforces the foundations for more investment and economic growth. Furthermore, shifting spending power to the poor stimulates job-creating economic activity.

With respect to the fiscal impact, Dr Samson described South Africa's tax burden as relatively low by international standards (in comparison both to OECD countries and to other middle-income economies). Tax effort analysis demonstrates that South Africa can raise taxes by five percent of national income without undermining international competitiveness. The BIG only requires an increase in taxes of two percent of national income. The positive growth and development effects improve the affordability of the grant in the medium-to-long run.

Overall, Dr Samson concluded that the BIG is the most effective policy option for eliminating destitution and reducing poverty. Effective social security reform is developmental, generating a positive growth impact that promotes job creation while improving the effectiveness of social delivery. The cost of the grant is substantial but affordable, requiring an increase in taxes equal to approximately two percent of national income.

Briefing by Institute of Social Development
Prof Pieter le Roux of the Institute of Social Development at UWC addressed some of the frequently asked questions about the BIG, including why a universal income grant is preferable to other anti-poverty measures, such as public works schemes; why a universal grant is preferable to a means-tested grant; whether the BIG would be affordable, and could be delivered effectively; and whether the BIG would create dependency. Prof le Roux concluded that the BIG is affordable, can be delivered effectively, and would act as a springboard for the poor, essentially eliminating destitution and providing a clear incentive to work.

Discussion
An ANC member stated that, while the Committee is aware of the burden of poverty, members must also ascertain whether proposed measures to address poverty will be effective. If tax cuts are abandoned in favour of implementation of a BIG, will this not push some working poor people into higher tax brackets?

Prof le Roux averred that recent tax concessions have actually benefited the better off. There is no question that a BIG would be more beneficial in reducing poverty.

Dr Samson added that, using data from SARS, EPRI has determined that tax cuts have not benefited the poor. People in the lower and middle tax brackets would not see their tax burdens increase after implementation of the BIG.

Mr Masutha acknowledged that a consensus has not been reached in South Africa around the issue of the BIG. The Taylor Report moves in the direction of incremental gains in social transformation policy. It recognizes that full employment would reduce to eliminate poverty, and that the main culprit for unemployment is structural problems in the economy. The rolling out of public works programmes would enhance access to basic services, as well as tackle unemployment. What are the most important ways of pressing this debate forward?

Dr Samson explained the poverty trap: structural poverty blocks people's access to the services that government is seeking to provide, and it also locks poor people out of the labour market. While public works schemes are important in the broader package of social security policies, the BIG attacks poverty directly.

Prof le Roux expressed his hope that the BIG would not become a party issue. There must be a debate to achieve consensus. Prof le Roux stated his concern that the government is rejecting the implementation of the BIG on the basis of incorrect information.

With respect to alternative approaches, Prof le Roux declared that, on most other issues, the government is moving in the right direction. Yet there has been no progress on the BIG, which is why the coalition has focused on it.

An ANC member stated that the BIG will not eliminate poverty, unless it is integrated into existing poverty alleviation programmes. She asked if the BIG Coalition had been able to look beyond the BIG. At what stage will the existing grants be phased out?

With regard to an integrated approach, Dr Samson articulated the position of the BIG Coalition that adoption of a universal grant is a vital step toward a comprehensive social security system. Implementation of the BIG will create purchasing power channeled to remote rural areas.

Ms Gandhi referred to Mr Samson's slides, and noted that members of the coalition were also advocating the expansion of the CSG. Given the very large number of 8-18-year-olds in South Africa, would this result in a higher takeup rate? She also requested the coalition to speak on issues of cost of living and food prices, as they relate to taxation.

Dr Samson explained that 52% of poverty in South Africa would be eliminated by extending the CSG to all those under the age of 18. This is an important intermediate step toward a comprehensive social security system.

An IFP member expressed his conviction that all South Africans must be wisened to what it will take to eliminate poverty.

Mr Solo acknowledged the serious problems surrounding means testing. The lack of information and manipulation of information leads many to incorrect conclusions. The South African media plays a major role in shaping public opinion, and one of the principal problems is the negative attitude of that media.

Dr Samson emphasized with Mr Solo's remarks, and praised the BIG Coalition for its superior management of the issue in the media.

Ms Ramotsamai (ANC) noted that an earlier question regarding when the CSG would be phased out had not been answered.

She went on to compliment the excellent presentations, and reiterate the position of the government that eliminating poverty was one of its key priorities. She stated that ANC members, more often than not, know poor people; some members were educated on the basis of grants, and know hunger, have lived with it on a daily basis. People want jobs, not handouts. When they see the government making new grants, they feel as though their hands are being tied. There are substantial administrative problems with delivery of the CSG. Presenters might have briefed the Committee on other aspects of the Taylor Report.

Dr Samson agreed that jobs were preferable to handouts, but explained that many poor people cannot access jobs or public works programmes. The BIG can complement these existing programmes to affect a holistic approach.

Dr Samson also agreed that bureaucratic bottlenecks were a significant problem. In this sense, the BIG represents a tremendous efficiency: the money, political will, and policies are all in place, but there is a dearth of administrative capacity. The BIG is economical with administrative capacity. Furthermore, corruption feeds off of means testing, and would be restricted by the implementation of a universal grant clawed back through SARS.

Ms Kasienyane (ANC) repeated that there was no consensus as of yet on the issue of the BIG, and asked if the coalition had made plans for implementation. How might implementation be driven?

Dr Jassat (ANC) expressed his concern that many in rural areas entitled to grants cannot access them, and asked what sort of impact it will have on the work time available to poor rural people if they have to reach BIG paypoints. Dr Jassat also responded to an earlier aside, stating that diabetes is not so much a disease of malnutrition as it is one of excess.

Ms Chalmers stated that, in many rural constituencies without substantial infrastructure, electronic delivery will be difficult.

Prof le Roux assured the Committee that electronic money could become a reality in South Africa quickly. Each citizen would have an individual, fingerprinted card; money would be transmitted in a cashless system, utilizing cellular communications networks. Shops would also need to have the system, and roll out the entire scheme would require a few billion rand. Namibia may convince its foreign donors to finance this system first, but South Africa could move on it soon. Current problems with the CSG revolve around security issues relating to cash and bureaucratic obstacles, both of which are eliminated by electronic money.

Briefing by 5-in-6 Project
Mr Lundi Rasmeni of the 5-in-6 Project of Catholic Welfare and Development (CWD) spoke on his personal experience of poverty: supporting dependents on his own income as well as grants received by members of the family, and advocating a BIG for its capacity to provide poor people with a better standard of living and access to employment.

Briefing by ACESS
Ms Paula Proudlock of the Alliance for Children's Entitlement to Social Security (ACESS) briefed the Committee on the recommendations of the Taylor Report, and specifically the proposed BIG, with particular reference to children's issues in South Africa. She concluded with recommendations for further hearings.

For details of the ACESS presentation, please see the attached briefing notes.

Briefing by SA Federal Council on Disability
Ms Petronella Linders of the South African Federal Council on Disability (SAFCD) spoke on the BIG with special reference to the needs of disabled people. The SAFCD supports the notion of the need for a universal form of income support which would be provided as an entitlement without means testing to all persons in South Africa. Many adults with disabilities cannot access employment, not due to their disability, but rather due to the structural unemployment and limited opportunities, and thus live below the poverty line. SAFCD believes that a basic income support through a cash transfer would greatly enhance the standard of all adults and children with disabilities, many of whom cannot access the disability grant (DG) or care dependency grant (CDG).

However, regarding the relation of the BIG to existing grants, the Taylor Report is somewhat unclear and even contradictory. The Committee initially states that the BIG would only go to those persons currently not receiving any form of social security, therefore excluding persons receiving the DG or CDG. At a later stage, it implies rather that these "de facto" poverty grants would be rationalized, but does not elaborate. What does this mean and what is the impact on the lives of people with disabilities? The Report's chapter on disability states clearly that the DG and CDG must be maintained at their current levels, if not increased, and then suggests that persons with disabilities would first receive a BIG and then an additional "top up" for their additional needs.

SAFCD expressed its opposition to the suggestion that the BIG only be for those currently not receiving any other form of social grant. Rather, SAFCD believes that all persons have the right to a BIG, and that those persons with additional and specific needs due to disability or chronic illness should still be able to access the DG and CDG. The existing social assistance disability benefits must be retained until such time as a comprehensive package of social services are in place that are easy to access.

In the absence of basic free health, rehabilitation, assistive devices, inclusive education, accessible public transport and accessible housing, the person with a disability should receive a BIG to provide minimal income. In addition, the person would still require the DG to cover the costs of the additional expenses due to the above services not being available.

Ms Linders stressed that the DG was not intended to be a poverty alleviating grant, but rather to provide for the additional needs due to the disability that caused inability to work. It has only become a poverty grant because the high levels of destitution within households and the lack of jobs available to all people, irrespective of disability. So it must be recognized that the social grants (DG and CDG) and the BIG would be serving different purposes. Thus the introduction of a BIG would not reduce the need for the social grants, and therefore should not replace them but complement them.

Discussion
Mr Masutha stated that it is important to understand the context in which the Taylor Report approached the issue of disability. When you introduce measures to reduce poverty, you are also reducing the incidence of disability and increasing the capacity of society to respond to the needs of its most vulnerable citizens. The BIG would reduce the burden on disabled people who, through the care dependency grant (CDG) and other grants, become the de facto family breadwinners.

An ANC member asked for clarification on whether Ms Linders represented the SA Federal Council on Disability or Disabled People SA.

Ms Linders explained that she represented the SA Federal Council on Disability.

An ANC member stated that government, business, and civil society must strengthen their partnership. The report of ACESS took no broad view, and no NGO in the children's sector has come forward to assist the government on the issue of the CSG. NGOs must work with government, no point fingers.

Another ANC member acknowledged the presentation by 5-in-6. She had worked in rural areas, and recognized how rural people suffered; she stated that the government is committed to helping people, and must come up with solutions.

Ms Ramotsamai noted that only organizations in favour of the BIG had presented, and stated her preference for more balance in the future.

Mr Saloojee (ANC) explained that public hearings would be held early in 2003, at which a more diverse range of opinions would be articulated.

Ms Ramotsamai said that the Committee should have heard other perspectives.

Mr Coleman delivered a few closing remarks on behalf of the BIG Coalition. He stated, for the record, that the coalition does not question the commitment of the government to end poverty. Secondly, with respect to the much-discussed notion of a comprehensive package for social security, Mr Coleman promised that the coalition would present a broader view at the public hearings.

Mr Coleman said that time is running out for the BIG, since Cabinet will take a decision in January 2003 on the Taylor Report. There is an urgent need to establish a committee with representatives of civil society and the relevant government departments to grapple with the details of practical questions around the implementation of the BIG, so that Cabinet has the logistical details when it sits down to take a decision.

Ms Isobel Frye (Black Sash) thanked the Committee for its time, and noted that all of the presenters would be eager to engage in further debate with members.

The meeting was adjourned.

Appendix 1:
Presentation by Ms Lundi Rasmeni
Please find the report I presented herewith. I would like to emphasise that the report was based on my own personal experiences, as I've mentioned it in my presentation. The views that are mentioned in this are not representing Five in Six position.


I'm Lundi Rasmeni and I've been in the western cape for the last 15 years. I now support 11 people with my salary of R3000.00. I can't save for my retirement and the education of my children because I have all these dependants. Does any of you send money to the rural areas, when and how much?


I don't know how much each of you earns but it might be four or five times my salary. Who are these eleven (11) people . My wife, my sister in law, her child, mother in law, my four kids, my mother, my pephew and my sister. That is my immediate family, the people that stay with my mother who benefit from my contribution I wouldn't want to include them because it would be like making a fairytale during the day and I grew up being told you don't tell fairytales during the day because you will grow horns.


My mother is 51yrs and my mother in law is 50yrs and both are unemployed. My mother stay with her sister , her three (3) children and two grandchildren. My aunt's grandchildren get child support grant (R280) and yesterday my sister in law told me she got R150 for her child. When my cousins receive the money it is no more a child support grant, it becomes a family support grant. Because they add groceries to the ones they bought with my R400 or R300 some other months. I laugh when my sister in law tells me how she spends her money, she says its finished before you use it. She has an eighteen month old boy.

She buys
Pronutro
Wheatbix
Vaseline
Milk
Soap
Chicken Piece
Roll-on

The food that she buys for the child lasts only one week, the father is nowhere to be seen he's in one of the SANDF camps around the country he cannot be traced or some government structure doesn't want to find him. I had to support this family with my salary.


That is why I always say to people if the government wants to deal with crime effectively they have to ask themselves how are we contributing to the status quo and how can they change it. People whom were involved in the liberation armed forces were given demobilisation money and people whom are over 35 years whom were in prison were also given some kind of remuneration. The majority of your young lions whom were involved in the struggle inside country didn't receive anything.


What is the government thinking about the youth of the 1980's whom contributed to the liberation of this country, sacrificed their education and their childhood. Some of these young adults didn't finish their high school and some of them had the opportunity to go to university or technicon but dropped out due to financial difficulties. Some of them were employed but retrenched and now are unemployed because companies are downsizing to make more profits.


The taxes that those companies pay to the government benefit mostly the haves. They are looking for work but it is not available, the public works programmes employ some of them and underpay them its also not sustainable. That is why you have a high crime rate in this country because the only way out of poverty is to do crime. Common people steal food and small things for survival (I'm not condoning crime). These people once arrested are normally kept for a long time awaiting trial in prison. How much money is wasted on them? Is it not easy to provide the BIG so as to alleviate some of these problems.


Because of the unemployment and no other thing to do, the only other thing they could do is to keep on making babies whom are not having a brighter future. These young people know what to do and they know what they need to accomplish it. They need money to start small businesses, to start small businesses they need training and to be able to access training they need money for transport and food. Because there is no time in this country where you could ride a train for free because you are unemployed.


I'm going to make an example. There is a rural town in the Eastern Cape, the municipality is building these nice RDP houses and allocating them to people. Nice colours too. They occupy the house today and the following week they are selling it for R500 or R600 because they can't afford to have their own house. People need a regular income run their homes sufficiently and have food on the table. It is better to go back to the room they previously occupied because they know at least they will receive supper at the end of the day. Some of these houses become hives of criminal activities. People commit crimes and they know they have a place to hide their stash and themselves.


The majority of time people are living in poverty. Has any of you gone without food for a few days, not because you are dieting because there is nothing to eat. If the neighbour gives you mealie meal to cook, you are asked not to do it well but to half cook it so as to fill you for a longer period of time. Has any of you done that.


If the government could introduce the basic income grant, that would help me to save for the education of my children and save money for my retirement, not be like my parents. It would also fill the stamochs of a lot of people whom are getting hungry in the urban and rural areas of this country of ours. My question to the Law makers would be, is this how you repay people after their have entrusted you with their destiny?


Have you heard of the young girls from rural areas, who risk contracting HIV by becoming prostitutes in trucks? They do this because of poverty. Some people in rural areas do anything to contract TB, get a grant and so as to feed their families. People tie a button to a string and they swallow it so as to show a mark on their lungs so as to receive a grant, they eat high blood treatment so as to have high blood symptoms and after six months of treatment they are eligible for a disability grant. People don't need to go through all this to feed their families, what they need is assistance from the government which is not forthcoming. Even here in Cape Town there are people who live in abject poverty.


You come to Makhaza and see the abject poverty people live in. The woman whom some of you bring from rural areas employ as domestic workers and underpay, deserve to get the basic income grant. What I'm also asking you is not to be PRO's of your laws; you say South Africa is a democratic country please let people challenge you on these issues. Don't go to public meetings asking people not to fill in petitions and telling them you are going to deal with these things in your conferences.


There are also people who are saying the poor can't manage finances. I would like you to think where you come from. Some of you are coming from homes where one or both parents drank but their first priority was their children. Also remember the previous government said. They said die kaffers kan nie regeer nie. Who is ruling now . The majority of poor people which I'm one of them, are positive about this country and if people could get this money they will use it positively and in a multiplying effect. Make a law that will secure their and their children's future.

Appendix 2:
Presentation by SA Federal Council on Disabilities
SA Federal Council on Disabilities: Presentation to The Portfolio Committee on the Recommendations of the Taylor Committee


By Petronella Linders
Div Coordinator: Economic Empowerment

SA Federal Council on Disability

40 Campground Road

Rosebank

7700

CHAPTER 5: Poverty, Social Assistance and the Basic Income Grant

5.4.1 What is the Basic Income Grant?

The Basic Income Grant

The SAFCD and the CI support the notion of the need for a universal form of income support, and therefore the Commission's call for a Basic Income Grant (BIG), which would be provided as an entitlement without means-testing to all persons in South Africa. Many adults with disabilities cannot access employment, not due to their disability, but rather due to the structural unemployment and limited opportunities, and thus live below the poverty line. We believe that a basic income support through a cash transfer would greatly enhance the standard of living of all adults and children with disabilities, many of whom cannot access the Disability Grant (DG) or Care Dependency Grant (CDG).

However, regarding the relation of the BIG to the existing grants, the Report is somewhat unclear and even contradictory. The Committee initially states that the BIG would only go to those persons currently not receiving any form of social security (p.61), therefore excluding persons receiving the Disability Grant or the Care Dependency Grant. At a later stage it implies rather that these 'de-facto' poverty grants would be 'rationalized', but does not elaborate. What does this mean and what is the impact of this on the lives of people with disabilities? The Chapter on Disability states clearly that the DG and CDG must be maintained at their current levels, if not increased (10.4.7.2 p105), and then suggests that persons with disabilities would first receive a basic income support, and then an additional "top-up" for their additional needs (10.4.7.3.p105).

The Disability Sector wish to state that we do not support the suggestion that the BIG only be for those currently not receiving any other form of social grant (p.61). Rather, we believe that all persons have the right to a BIG, and that those persons with additional and specific needs due to disability or chronic illness should still be able to access the Disability Grant and the Care Dependency Grant. The existing social assistance disability benefits must be retained until such time as a comprehensive package of social services are in place that are easy to access.

In the absence of basic free health, rehabilitation, assistive devices, inclusive education, accessible public transport and accessible housing, the person with a disability should receive a BIG to provide minimal income. In addition the person would still require the DG to cover the costs of the additional expenses due to the above services not being available.

We would like to stress that the DG was not intended to be a poverty alleviating grant, but rather to provide for the additional needs due to the disability that caused inability to work. It has only become a poverty grant because the high levels of destitution within households and the lack of jobs available to all people, irrespective of disability. So it must be recognized that the social grants (the DG and the CDG) and the BIG would be serving different purposes. Thus the introduction of a BIG would not reduce the need for the social grants, and therefore should not replace them but complement them.

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