Social Relief of Distress Grant progress report by Minister

NCOP Health and Social Services

23 August 2022
Chairperson: Ms M Gillion (ANC; Western Cape)
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Meeting Summary


The Minister of Social Development, along with the Department of Social Development (DSD), gave a progress report on the third Covid-19 Social Relief of Distress (SRD) grant that started from 1 April 2002 ending 31 March 2023. The briefing outlined the implementation timeline by the South African Social Security Agency (SASSA), the application and screening process, data and bank checks, proxy means testing, the amended regulations and appeals process. It also provided a profile of the grant recipients. It was found that most recipients have been using their grants for food and electricity.

Committee Members asked questions about measures for when the grant expires on 31 March 2023, current difficulties with payments, food insecurity in the country, the appeals process for rejected applicants, alternatives to reliance on grants, and prognosis for the Basic Income Grant.

Meeting report

The Chairperson noted it was still Women’s Month and the meeting was dedicated to all women, especially single moms, who are doing a brilliant job in raising their children. The Committee appreciates that in this sector the Minister and the Deputy Minister are both women.

Minister input
Ms Lindiwe Zulu, Minister of Social Development, introduced the report on the third iteration of the Social Relief of Distress (SRD) grant. The impact of COVID-19 and its lockdown measures had deeply impacted both social and economic activities of South African citizens. Under the leadership of President Ramaphosa, the COVID-19 SRD grant was introduced in May 2020 to be implemented by the Department of Social Development (DSD) through the South African Social Security Agency (SASSA). The first iteration of the grant ended in April 2021 and the second iteration ended in March 2022. In the 2022 State of the Nation Address, President Ramaphosa announced the third iteration of the SRD grant.

There are three primary factors underlying the continued implementation of this grant of which one is the ongoing impact of COVID-19 on the economy and the slow economic recovery. The grant also positively impacted poverty and inequality in South Africa, especially food insecurity among the needy. In 95% of cases, recipients use their grants for food and electricity.

The Minister shared an inspiring story of a young woman who started her own business with her R350 grant. After enquiring about old farm tunnels, she researched and turned them into a vegetable farm to benefit her family and the community.

Ms Brenda Sibeko, Deputy Director-General: Comprehensive Social Security, DSD, added that this woman participated in the workshops on developing, finalising and strengthening the DSD basic income support proposal.

Minister Zulu noted that the third iteration of the grant was announced after lifting the National State of Disaster in March 2022. The Department had to develop new regulations by which they could continue to implement the grant under the Social Assistance Act. By implementing the third iteration of the grant, R44 billion has been allocated to serve 10.5 billion people until the end of March 2023. The allocation fell short of the 10.9 billion qualifying beneficiaries. The Public Finance Management Act (PFMA) requires the department to stay within the allocation, so the Department introduced additional qualifying criteria for the grant. This included the introduction of a means test threshold of R350 for all applicants. This was implemented by checking the bank account of each applicant monthly to assess whether their monthly income is R350 or more. This assessment was very difficult as DSD had to negotiate with the banks to perform these means tests and banks always choose to protect their clients’ accounts. In the first three months, serious challenges were faced, resulting in a two-month delay in grant implementation.

The most serious challenge faced is the low uptake of the grant, which is lower than the budgeted amount. Unfortunately, the unspent money must be returned to National Treasury, despite the growing number of hungry and distressed people in the communities. DSD and SASSA will have to review policy and legislation positions in collaboration with National Treasury as policy and legislation create difficulties for implementation.

DSD notes the public’s frustration about the qualifying criteria as the court has been approached to declare these criteria unlawful. On 16 August 2022, the amended regulation was published which simplified some uncertainties on the qualifying criteria. The biggest amendment made was the increase of the means test from R350 to R624, which is the estimated food poverty line for 2022 as agreed upon by the Minister of Finance. DSD hopes that this will increase the uptake of the grant and already, by the beginning of August 2022, SASSA had received just under 12 million applications. With the means test threshold being increased, it created misunderstanding as people thought that the grant payment had been adjusted upwards but this was not the case.

In June 2022, there were 11 million applications, of which 6.6 million were approved and almost 4 million received their grant payments. The assessment for July 2022 had some delays because the previous regulations required people to reconfirm their grants every three months. June 2022 was the third month from April and many people failed to reconfirm their grants.

Under the new regulations, July assessments will be done soon, but there are still challenges as applicants are not providing correct banking details. Applicants were encouraged to provide correct details and SASSA will conduct ongoing communication and publicity to increase grant uptake. The Minister said that DSD should develop a fluent grant system in the interest of those without income, employment, and the vulnerable. The Department understands that the majority of South Africa prefer to be employed compared to receiving a grant, but until the economy has grown, it cannot helplessly watch people lose their dignity.

SRD grant provision and interventions
Ms Sibeko acknowledged the importance of the SRD platform in building a fluent social assistance system for people between 19-59 years old. DSD hopes this grant and its success can be used as a foundation to implement longer-term support.

Mr Brenton van Vrede, Chief Director: Social Assistance, DSD, reported on the timeline of the third iteration of the COVID-19 SRD grant, the application and screening process, data and bank checks, proxy means testing, the amended regulations and appeals. The profile of the R350 SRD grant applicants was presented according to gender, province, age, educational profile as well as applications by non-citizens.

Mr van Vrede drew attention to the DSD appeals website hosted by the Department, which makes the appeal process easier.

He provided information on the challenges faced with payments, especially because of the new regulations and other challenges. Additional statistics were presented.

Mr E Nchabeleng (ANC, Limpopo) was concerned about double dipping and duplication with the SRD grant. The Department of Sports, Arts, and Culture (DSAC) gave relief to artists affected by the lockdown. Is there a possibility that people already receiving relief from DSD can double dip and receive payment from SASSA as well?

Ms N Ndongeni (ANC, Eastern Cape) wanted certainty on previously approved grantees to receive their payments in April 2022. Will these recipients still receive their April 2022 payment regardless of whether their application is approved or not under the new framework? How many applications are still pending? What is the duration of the appeal process? Clarity is also needed on the appeal application as practical difficulties are faced by agents when implementing the provision.

Ms D Christians (DA, Northern Cape) recalled that the R350 grant expires in March 2023. What is basic income support for those in need after March 2023? Are there talks of extending the SRD grant or is the Basic Income Grant still being considered? She acknowledged that the grant is very much needed by the community, especially after COVID-19 and the economic and financial climate that is currently being experienced. Are there plans to assist recipients in being less reliant on social assistance and in assisting poorer communities with business development and other ways of income?

Ms Christians observed that food security has recently become a huge issue in South Africa. Children are on street corners begging for food out of hunger. She heard that prisoners are busy developing gardens and growing their food in certain prisons. Are there any collaborations with these prisons? She heard that these prisons are giving their food to the needy. Can this be clarified as it was not seen anywhere? If so, have these prisons been working with DSD and what were the results? Most importantly, what interventions are done by DSD to ensure food security in the country and for children on the streets begging for food?

The Chairperson said she had received many inquiries from the public. People are receiving SMS messages with dates when their grant payment will be in their account but when they go to the Post Office or bank, no money was deposited into their account. This still happens two weeks after the dates given. Is DSD experiencing difficulties when it comes to messages being sent to recipients with no agreement for payout? If there are problems, can DSD explain why it is happening?

Ms Sibeko replied about previously approved applications for April 2022. She explained that April applications would be in line and under the new regulations. It will be paid out and should have already been paid as SASSA has approved it. Should recipients be experiencing problems, it is most likely due to difficulties at their banks. April applications were dealt with in June 2022. Those who applied in the previous iteration, including those who have appealed, were already addressed.

On the duration of the appeal process, Ms Sibeko replied that appeals are not done by SASSA but by an Independent Appeal Tribunal. Many of the appeals from rejected applicants are because of people reflecting on the UIF and SARS database even when they are no longer active on the database. A certain time frame exists before someone is removed from the UIF database. The appeal tribunal assesses the updated data to ensure that those who were excluded by error because they were wrongly reflected on the UIF and SARS database are then included. The updated data ensures that assessments are more accurate. Appeals can only happen once SASSA provides all the information of those who applied on appeal. Then the tribunal requests updated data from the UIF and other institutions to run the assessments. The appeals tribunal has a 90-day time frame in which they must review the information and for the database to be updated. However, waiting for the information creates a two to three-month waiting period.

Ms Sibeko replied that DSD is busy working on a solution for when the SRD grant expires in 2023 The Department is engaging with other departments, including National Treasury, on how to address the continued need for income after 31 March 2023. The Department is considering introducing a basic income support programme and this also forms part of the work that DSD is currently doing, but no decisions have been made yet. Even if the policy is approved, legislation must still be drafted, which takes a lot of time. DSD proposes that the current grant be extended after March 2023 while the policy and legislation are implemented. DSD is working on how to extend the SRD grant. Once legislation is in place, basic income support will be introduced.

Ms Sibeko replied that DSD has done a lot of work on interventions to make people less reliant on grants over the years. The Department is busy strengthening its work to make people less reliant by making sure that grant beneficiaries are linked to economic opportunities. Work on sustainable livelihoods is also being done, and the Presidential Employment Stimulus ensures people are assisted to access job opportunities. It also engages with the Department of Small Business and Development to help those who want to start their own business. All these interventions are important, but they will not cover all 10.5 billion people who are currently in the grant programme. DSD is continually working on solutions and is expected to work with other government departments to enable people to grow their incomes and not rely on the R350 grant. This is also the reason SASSA is collecting information on grant recipients. By doing this they can see if someone is qualified with either a degree or matric and link job opportunities to them.

Ms Sibeko replied that food security is a big problem that DSD is facing. The child support grant is in place, but it is not enough as it is below the food poverty line. There are other ways that DSD has been working on this issue to ensure that people can access food. DSD has different Community Nutrition and Development Centres (CNDC) across the country that provide additional food to food insecure households.

Ms Sibeko said she is not aware of work done in collaboration with the Department of Correctional Services (DCS) and DSD would respond to this question in writing. She is only aware of the collaboration with the Department of Agriculture.

Mr van Vrede answered the concern about double dipping. In the previous iteration of the grant when other departments including DSAC and the Department of Agriculture provided relief to farmers, spaza shop owners, and small businesses, DSD had all this information on their database. Since the country is no longer under the National State of Disaster, many of these forms of relief were taken away and DSD is no longer updated with that information. DSD only checked that information in previous iterations to prevent double dipping.

Mr van Vrede replied that they do experience difficulties when it comes to payments. It is important to note that the Post Office is no longer used for payments. The payment system has been expanded through Post Bank to a network of merchants. Previously recipients would go to the Post Office to withdraw their money but there are now thousands of merchants that are linked with Post Bank where recipients can withdraw their money.

One of the main challenges experienced is recipients not updating their details on the system. To withdraw money from a merchant, an SMS is sent, and it is needed together with the Identification Document to make the transaction. Recipients change their cell phone number and they do not update that on the SASSA system, so the SMS is sent to the old number that is no longer in use. Mr van Vrede advised to always keep contact details updated on the system. A delay after updating details on the system should also be expected as the system updates monthly.

Load shedding was also responsible for some difficulties at Post Bank because some generators were faulty over the past months. When the main system is down it becomes difficult to maintain function, but most of those challenges have been resolved.

Problems are also faced when people withdraw more money than what they have in their account. They receive an SMS that they have insufficient funds for the transaction to take place. Merchants continue to assist recipients on how to check their account balance.

The Committee adopted the minutes of a prior meeting and the meeting was adjourned.

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