Social Development Budget: Hearings

Meeting report

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
14 March 2001
DEPARTMENT OF SOCIAL DEVELOPMENT BUDGET: HEARINGS

Chairperson: Mr E Saloojee

Documents handed out:
IDASA, Presentation on Budget Vote 17 (Appendix 1)
Gender Advocacy Programme, Presentation on Budget Vote 17 (Appendix 2)
Child Health Policy Institute, Presentation on Budget Vote 17 (Appendix 3)

SUMMARY
Although IDASA welcomes the concern for the efficient use of resources by the Department of Social Development, they have a number of concerns about the decrease in the poverty relief allocation. Gender Advocacy Programme said that investment on social spending by addressing poverty should be government's first priority. The Child Health Policy Institute said there needed to be changes to the present legislation to make social security more accessible.

MINUTES
IDASA-Budget Information Service
Ms M Sadan from the Budget Information Service, IDASA, said the real annual growth rate of social grants is 0.8% over the medium term is insufficient and therefore a concern. Furthermore, the capacity constraints in the National Department of Social Development impede the shift to developmental social welfare. At provincial level, service delivery issues need to be addressed for the policies of the Department to have an impact on poor people. See Appendix 1 for the substance of IDASA's presentation.

Discussion
Ms S Rajbally (Minority Front) asked whether IDASA was going to further research the Child Support Grant, considering the grant was not sufficient. Ms Sadan replied that the Ministerial Committee to Investigate a Comprehensive Social Security System had been appointed last year and is expected to report in June 2001. They would be looking at Child Support Grants amongst other issues and would be making recommendations on the grant.

Ms T Tshivhase (ANC) said that most people in the rural areas are not aware of grants that they could qualify for. Had IDASA done any research with regard to rural areas? Ms Sadan replied that there has been collaboration between the Department of Social Development and the Department of Home Affairs to provide access to people in rural areas. Services such as vans had been provided by the Department of Home Affairs to improve access to people in rural areas. However since the surplus Child Support Grant from the previous years [due to poor take-up of the grant] had not been rolled over, these services cannot at present be bought from the Department of Home Affairs.

Prof. L Mbadi (UDM) said the Child Support Grant security net seeks to include three million children. However, the grant applications require information that is not necessarily possessed by people in rural areas. Most children are not even registered at birth. Thus the system does not reach the number of children that it ought to. Ms Sadan replied that the Department is trying to overcome this problem by working very closely with the Department of Home Affairs.

The Chairperson suggested that other than the lack of capacity within the Department there are other problems that impede the process of service delivery. Ms Sadan responded that the National Department has many pilot projects. The funds are flowing from the National to the Provincial Departments. There is, however, a lack of communication between these two levels and this problem needs to be addressed. The Department has to also streamline their projects and see what impact the projects have on the relevant people.

An ANC member said that there are various problems surrounding Foster Care Grants. Families are giving away their children as they cannot care for their children. Many grandparents are giving away their grandchildren, as they cannot apply for Foster Care Grants. What is IDASA's comment on this? Ms J Adams replied that the Social Assistance Act, 1992, allowed grandparents to apply for Foster Care Grants. There is a legal process involved in accessing the grant, but it is definitely available for grandparents that foster their grandchildren.

Ms J Chalmers (ANC) asked whether HIV/AIDS should be included in the present social security structures or whether it should be a separate structure. Ms Adams replied that the Department has already started an HIV/AIDS Directorate.

Gender Advocacy Programme (GAP)
Ms A Mvimbi, the Project Co-ordinator of the Social Policy and Gender Project, said that GAP supports the appeal for an increase from the current 12.2% in the welfare budget to at least 20% as to effect more allocation in social grants as an interim poverty reduction strategy.

Increased allocation on grants like the Child Support Grant should adequately reflect the reality of the situation of the majority of primary caregivers. They are mostly women, poor, illiterate, unemployed and living in largely informal settlements and rural areas.

Income received from restructuring of State assets, which amounts to about R19 billion or ten percent of the country's income, should be redistributed amongst the poor - reflecting the political priority of the government.

GAP supports the Vat zero-rating on paraffin. It also supports the call by SANGOCO to reduce VAT on other basic amenities such as bread and electricity. See attached document for the substance of GAP's presentation.

Discussion
An ANC member said the Committee would have appreciated GAP mentioning some of the successes of the Government rather than only focus on where Government's commitments have been reversed. "Our people do not want hand-outs, they want to work," she said. Thus there is a need to view social development together with economic growth. Ms Mvimbi responded that Government should match its policy commitments with the relevant budgetary allocations.

Prof Mbadi wanted to know from where the street children came. Ms Mvimbi replied that there is a trend for people to leave rural areas and live in informal settlements. Some children choose to leave the informal settlements and live on the streets. This is an indication of how bad the situation is in the rural areas and in informal settlements.

Ms E Ghandi (ANC) said the issue raised by IDASA and GAP was that the Child Support Grant was not sufficient. By placing emphasis on the amount, are they content with the age requirement of the grant which is 0 to seven years? Is the age not a problem, because if it were increased, there would be budgetary implications that would follow? Ms Mvimbi replied that the age was a concern for GAP, as an increase in the age requirement would impact positively on the lives of many women and children.

Child Health Policy Institute (CHPI)
Ms T Guthrie ,a representative of CHPI, said that certain amendments should be made to the Social Assistance Act and Regulations:
- The criteria for being a grant recipient should be changed.
- There should be a needs-based assessment.
See attached document for the substance of CHPI's presentation.

Discussion
Ms Chalmers asked whether CHPI had communicated with the tertiary institutions to provide the institutions with relevant changes and information that affect social security and development. Ms Guthrie replied that although CHPI is part of the University of Cape Town they do not make any presentations at the University.

Ms Ghandi asked whether CHPI had considered day-care centres as an alternative to the Child Support Grant because if there were enough day-care centres for children in need then the Child Support Grant would not be needed that urgently. Ms Guthrie replied that CHPI is calling for day-care centres as they realise the importance of such centres. CHPI has done no specific research on children on the "ground level".

Ms Tshivhase asked how far was CHPI's research on women and children. Ms Guthrie replied that the CHPI focuses mainly on policy and legislation and their research is conducted in these areas. Their research does not extend on the "ground" or at 'grass-roots level".

Ms P Cupido (DP) asked what should the amount be for Child Support Grants.
Ms Guthrie said that the CHPI is not an economic organisation. There are NGOs and community-based organisations that are gathering information together to arrive at an acceptable figure. In CHPI's view the correct amount should be at least a minimum of R250. See the attached document for the substance of CHPI's presentation.

The meeting was adjourned.

Appendix 1
IDASA
Consolidated National and Provincial Social Development Budget 2001/2002 - 2003/2004
Introduction
The Department of Social Development, formally known as the Department of Welfare and Population Development, aims to facilitate sustainable human development through the following programmes, social security and developmental social welfare services and poverty relief programmes.

The National Department of Social Development
The National Department of Social Development is responsible for policy making and monitoring. The total allocations to the national department have fluctuated over the past few years. This is largely due to 'special allocations' such as the Poverty Relief allocations and a number of conditional grants, which flow to provinces.

Table 1. National Department of Social Development Medium-Term Expenditure Estimates 2001/02-2003/04

Source: Department of Social Development, 2001 and own calculations.

The Child support Grant increased from R100 to R110. This reflects a real increase of 4%, which translates into R4.00. The 4% increase in the Child Support Grant for this year is not adequate, as it does not take into account that the value of the grant has been eroded by inflation since its introduction in 1998.

The Foster Care grant increased from R390 to R410. This reflects a real decrease in growth rate of -0.45%, a decrease of R2 per month.

The Minister of Finance in his budget speech announced that grants would be inflation linked over the medium term. However, the allocation to Social Development over the medium term only indicates an increase of 0.8% annual average growth. The increase does not adequately take into account the inflation linked increases since grants constitute on average 90% of social development's budget. Given that the take-up rate will increase over the medium term, the 0.8% real increase is insufficient.

Service Delivery Problems
Whilst the inflation linked increases to most grants are welcomed, the impact of social security transfers are minimised by service delivery problems in provinces.

Currently approximately 644 565 disabled persons are recipients of the disability grants. Nonetheless, disability grants are not well targeted. The Financial and Fiscal Commission has recently estimated that only 56% of eligible disabled people receive grants. Furthermore, coverage of the grant is skewed as the majority of the current beneficiaries are in the Western Cape and the Northern Cape. The low coverage is a result of historical imbalances created by apartheid and the lack of infrastructure in poorer provinces. For instance the Western Cape and the Northern Cape have take-up rates of 60%, while the take-up rate in poorer provinces is generally below 30%.

Presently only 30 737 disabled children receive the Care Dependency Grant (paid to parents of children with severe physical and intellectual disabilities). Whilst the increase in the grant is positive, the impact is limited, given that the number of disabled children who benefit is low. A number of factors contribute to the low take-up rate. The grant was introduced in December 1996 and many parents of children with disabilities do not know about the grant or if they do, they have difficulty in accessing the grant.

With regard to the Child Support Grant, in March 2001 only 998 156 children were accessing the grant, this translates into 33% of the total 3 million poor children targeted.

Conditional Grants
Financial Management and Improvement of Social Security System
The allocation for 2001/02 is R10.2m; each province will receive R642 000, with the exception of the Northern Cape, which receives R5.1m. For 2002/03 the allocation is R10.8m, each province receiving R1.2m.

Child Support Implementation Grant
The Child Support Implementation Grant was introduced in 1998. The purpose of the grant was to assist provinces with the introduction of the Child Support Grant.
Currently approximately 1 million children of the targeted 3 million children receive the Child Support Grant. Provinces therefore still require resources to increase accessibility.

Concluding remarks
Whilst we welcome the increases in social grants, the real annual average growth rate of 0.8% over the medium term is a concern, given that social grants will be inflation linked and the upward pressure on grants due to the impact of HIV/AIDS.

The capacity constraints in the National Department of Social Development impede the shift to developmental welfare.

At the provincial level service delivery issues need to be addressed for the policies of the Department of Social Development to have an impact on poor people

Appendix 2:
Submission to the Portfolio Committee on Social Development -By Ayanda Mvimbi, Project Coordinator: Social Policy & Gender Project (GAP)

Introduction
The Gender Advocacy Programme is an independent advocacy and lobbying organisation. We seek to bridge the gap between women in civil society and structures of governance. Through this process we aim to increase women's participation in decision-making at all levels of government.

We currently work on five key projects in our organisation: Reproductive Health, Social Policy, Domestic Violence, Women and Governance and Local Government Gender. Our main focus is gender advocacy and lobbying. We inform our lobbying through research and training/capacity building. By empowering women with advocacy and lobbying skills we hope to increase their capacity to participate in decision making processes. Our main aim is to impact on legislation and policy formulation processes to ensure that these are gender -sensitive and actively promote equity between women and men in all spheres of South African society.

GAP, welcomes the opportunity to input on this very critical budget process. We are however concerned that a number of important role players have not been consulted to input. Citizen participation, transparency, accountability, equality of all citizens, the protection of human rights and most importantly rules of the law are principles fundamental to a true democracy. We want to appeal to the committee to uphold and protect the constitutional rights of, in this instance the voiceless and marginalised groups, children and women by creating another opportunity for public participation. This will enhance the perception that we live in true democracy where opportunities and not barriers, are created to consult with all stakeholders on critical issues, which will have a direct bearing on the quality of their lives. The spirit of the request is that of cooperation in the struggle toward social and gender justice. We trust on your favorable consideration for the request.

Why Social Policy and Gender?
Poor black women still suffer the worst forms of discrimination and marginalisation as result of the legacy of the apartheid system. The project seeks to ensure that policies and programmes developed and implemented by the government addresses the needs of poor women. GAP 's definition of poor black women is:
- Unemployed or economically inactive
- A high illiteracy rate
- Poor access or no access to basic services, i.e., health, welfare, housing, clean water etc.
- No or limited access to any form of income

GAP wants to ensure attainment of wellbeing of all citizens which is translated to proper and adequate access to welfare services, comprehensive social security and eradication of poverty. This should be achieved by matching policy commitments with appropriate budgetary allocations. This can be easily done if the government puts its priorities in the correct order in terms of who is targeted by budgets and who benefits.

Government Policy Commitments
As outlined in the Constitution, Policies and Legislation must adhere to the following:
- Promoting well being of all citizens
- Addressing alienation and the economic and social marginalisation of majority of people who are living in poverty
- Inter- sectorial response within government and between government and civil society organisation
- Improvement and attaining of socio-economic rights as a basic human right
- Setting up a comprehensive social security system
- Advancement of women's quality of life and status in society

It is noteworthy to say that in 1996 the government made a commitment to reallocate funds to address poverty as it was then viewed as a critical area of concern.

Reality check
The situation in the country currently reflects the following: - 18 million households live the poverty line (at an income of R353)
- Africans constitute 57,2% of the poorest compared to 2,1 % whites
- About 56, 5% of women are unemployed
- Poorest household citizens remain African, female and largely in informal settlements and rural areas
- Female headed households remain at the bottom of the bottom quintal translating 31% of African female headed households compared to 19 5 African male headed household

The gap between poor and rich has increased emerging new black elite who are mostly men and the poorest of the poor being black women.

The role of Social Development
Social development remains one of the government critical areas for socio-economic transformation. Women especially are at the bottom list of the poorest of the poor and provide primary care for their families and society has left the responsibility of the upbringing for children and to provide basic services like food, health care, education etc. sa the sole responsibility for women. This is unacceptable but even more so if the state is not going play a meaningful role in improving the lives of women. This can be done by providing public provision of social services and adequate safety nets and other specifically targeted sustainable developmental programmes.

Gaps between policy and implementation of policies
Government's budgets are a key political tool for the implementation of social, political and economic policies. The pressure that has been put by global markets has created a tension between our social policy and the economic policy. GEAR remains hostile to poor women, as we are more impoverishment of women on a daily basis. This puts into question the government political will to change for the better the lives of poor people, more especially women in informal settlements and rural areas. The government prides itself for the increase in the Gross Domestic Product (GDP) but this in actual fact, does not reflect the quality of life and the gap between rich and poor as it does not even take into account women's unpaid labour. The increasing gap between rich and poor is indicative of policies' failure to bring about change and feminisation of poverty which is on the rise because of policy reliance on women's unpaid labour, i.e., caring and raising children, cooking etc.

Gaps in Budget Analysis
- The macro economic policy lacks gender analysis, clearly indicating how much money is specifically targeting women with aim of improving their status of life. - The priorities of the budget are skewed, more money goes to the servicing the apartheid debt instead of addressing women's poverty
- The need to balance budgetary constraints with providing for the well being of poor people.
- Budgets are not pro-poor and not redistributive. The trickle down approach has been ineffective thus far.
- The budget lacks a developmental focus of investing on social upliftment
- Lack of valuable participation by the civil society organisation in budget reform process
- No established link between human and gender development indicators and economic indicators
- Investment on social spending not viewed as a priority and thus not inflation-linked increase on social grants, i.e., The Child Support Grant (CSG) was introduced in 1998 at R100 per child, it has not increased since then. Although GAP welcomes the increase of the CSG by R10 and the promise of linking it with inflation in future we however want to state unequivocally that this increase is insignificant because it does not take into consideration the cost of living and inflation which is at 5,6% currently.
- A government stance of limited resources or financial restraints indicates lack of commitment to address social problems facing the country as there are various creative ways of ensuring redistribution of income that the government should use.
- We question the criterion that is used for increments in budgets, whether it has a bearing on the bigger picture. Allocation of funds to provinces remains flawed as there is no proper analysis of the socio-economic situation.
- According to COSATU there are about 13,5 million people who live below the poverty line, who do no qualify for any form of assistance in the current social security system. GAP would want to question the feasibility of the comprehensive social security system in the form of the Basic Income Grant within current budget allocations

GAP's Recommendation
- We support the increase from the current 12,2% in the welfare budget to at least 20% as to effect more allocation in social grants as an interim poverty reduction strategy.
- Increase allocation on grants like the Child Support Grant should adequately reflect the reality of the situation of the majority of primary caregivers whom are mostly women, poor, illiterate unemployed and largely informal settlements and rural areas. We therefore call for adequate budgets, which will affect comprehensive social security for poor families.
- A clear gender analysis of the budget as to how much is being spent on poor women and children. At this stage there is no clear information as to how much actually goes on these groupings.
- An integrated government policy approaches and financing policy to address the race, class and gender inequalities.
- Introduction of clear targeted indicators of gender inequality which is supported by the budgets
- Income received from restructuring of state assets which amount to about 19 billion or 10% of the country's income should be redistributed amongst the poor reflecting the political priority of the government
- Budgets must have a developmental approach and thereby investing more on social upliftment as to improve the lives of poor people by providing safety nets for the poor.
- The government needs to restructure their priorities and allocation of budgets in line with political commitment they have made
- We support the VAT zero -rating on paraffin however GAP also support the call by SANGOCO to reduce VAT in other basic amenities, i.e., bread, electricity, water etc.

Conclusion
In conclusion GAP would want to emphasize that investment on social spending by addressing poverty should be the governments' first priority. This will contribute to social upliftment and economic stability of the country. Lastly I want to reiterate that poverty and budgets are a political issue in South Africa. Transformation cannot take place whilst the majority of poor women and children are swamped into unacceptable living conditions with lack or no access to basic welfare services, health, education, clean water and electricity. If we are all committed to improving the lives of poor people and changing their lives we should be making bold political decisions that are reflected by how we spend our country's finances.

Appendix 3
SOCIAL SECURITY BUDGET FOR CHILDREN IN SOUTH AFRICA
Presentation to the Portfolio Committee on Social Development by the Child Health Policy Institute, UCT-Teresa Guthrie

Children & Poverty in SA
¨ There are 17 million children under 18years in South Africa. 60% to 70% of these children live in extreme poverty. 3.2 mill poor 0-5yr olds. 10.2 mill poor 0-18yr olds (IDASA)
¨ Infant Mortality Rate (IMR) 49 per 1000 (higher than Cuba, Vietnam & Botswana) (to increase to 100 per1000 - HIV/AIDS)
¨ 25% of children under 5 have severe to moderate stunting
¨ Estimated 10 000 children live or work on the streets.
¨ 9% live in households without parents or grandparents
¨ 65.4% of all HIV+ people are adolescents (15-19yrs)

The Right of the Child to Social Assistance
¨ The Convention on the Rights of the Child
- State parties shall provide appropriate assistance to the child and carers, subject to available resources (23:2)
- Every child has the right to benefit from social security, including social insurance (24:1,2).
- A mentally or physically disabled child should enjoy a full and decent life - dignity, self-reliance and participation (23:2)

The Right of the Child to Social Security and Social Assistance
¨ South African Constitution:
- Every one has the right to have access to social security and where appropriate, social assistance. Section 2:27(1)(c).
- Children have the right to shelter, basic health care services and nutrition-Section 2:28(1)(c).

Social Security
¨ A wide range of public and private measures that provide cash or in-kind benefits or both. (White paper for Social Welfare 1997)
¨ Includes:
- Social Insurance - usually private, contributory, for formally employed eg. Compensation for Occupational Injuries and Diseases Act (COIDA) Road Accident Fund (RAF)
- Social Assistance - state provided, non-contributory benefits, cash & in-kind (free or subsidized services, nutritional schemes, health services, transport, vouchers)

Aims of Social Security
¨ Poverty alleviation - providing basic needs, adequate standard of living
¨ Protection & compensation for social risks/ contingencies - sickness, unemployment, death, disability, poverty/ loss of income
¨ Rehabilitation, development, integration
¨ Solidarity
¨ Enable full enjoyment of human rights for all
¨ Cash transfers, free/ subsidised services, voucher systems, support programmes, fee reduction, tax reductions, public work programmes, IGPs, transport, energy, housing subsidies.

Current Social Security Expenditure
¨ Social security budget increased from
- R16 000 mil (96/7) to R21 00 mil (99/00) = +4.2% in expenditure but -2.7% per capita (after inflation)
¨ Jan 2001 = R1,500 million
¨ = approx. 90% of total welfare budget
¨ = approx. 8% of govt. spending
- 61% of social security budget is spent on pensions
- 25% on grants to people with disabilities, of which 2% is for children
- 10% on children from poor families (CSG & foster grants)
- The CDG = 0.5% of total social security budget.
¨ Thus the First Call to Children is not reflected in the budget
¨ UN CRC Committee have called on govt. to increase the allocation to children.

Social Provisioning for children
¨ The Child Support Grant 0-7 years, poorest groups (30% poorest vs 70% in poverty)
- Jan 2001 = 700 000 receiving (=7% of ALL poor children, 33% of targeted children)
- Inadequate amount
¨ The Care-Dependency Grant for children with severe disabilities for permanent home care
- Jan 2001 = 30 000 receiving (approx 25% of eligible children)
¨ The Foster grant - for children legally placed in foster homes.
- Jan 2001 = 50 000 receiving
¨ It is assumed that the OAP & other grants benefit children within those households with a recipient.

Gaps
¨ Children 7 - 18yrs
¨ The remaining of children living in poverty (approx. 50%)
¨ Children with no adult supervision - streets / child-headed households / AIDS orphans
¨ Children with HIV/Aids, other chronic illnesses & moderate disabilities

Recommendations (from 2 national workshops)
¨ Immediate Amendments to Social Assistance Act & Regulations:
¨ Child Support Grant:
- Extend coverage of CSG to 18yrs
- Increase amount - determined by objective poverty measure & linked to inflation
- Abolish means-testing - provide universal access
- National must ring-fence amounts
- OR Phased in approach -
- Raise threshold income of means-test to target at least 50% of population
- Improve accessibility to children without Primary Care Givers (PCGs) - use NGOs, CBOs, Community structures to administer
¨ Care-Dependency Grant:
- Purpose should be to meet the extra needs due to the health condition, to promote the child's survival, development, protection and participation.
- Eligibility should be based on need due to the health condition.
- Extend provisioning to children with moderate disabilities and chronic illnesses, including HIV/AIDS.
- Remove clause referring to permanent/ 24hr care
¨ Foster Grant
- Subsidised adoptions
- Simplify process of accessing, especially for family members
- incentives for fostering HIV/AIDS orphans: tax rebates, free health & education for foster & biological children, coverage of the funeral costs of the HIV+ foster child.

Longer-term transformation
¨ OPTION 1: Universal provisioning of a Basic Income Grant for all adults and - children, with recognition of extra needs of child
- Households would benefit
- All children would benefit
- Simplified admin - increases accessibility
- improved general economy though greater spending power
¨ There must be an Additional amount & services for children with special needs due to health conditions or compromised home circumstances.
¨ OPTION 2: Universal Basic Support Grant for all children to meet their basic needs, alleviate poverty and to provide an adequate standard of living for their development
¨ There must be an Additional amount & services for children with special needs due to health conditions or compromised home circumstances.
¨ Inter-sectoral collaboration & commitment to providing other subsidized services (health/ transport/ education/ housing

Administrative reform
¨ Needs-based assessments
¨ Provide NEW assessment tools, with guidelines & training for Assessors.
¨ Assessment by a multi-disciplinary team, or at least health/social community-based worker
¨ Simplify & speed up application & assessment process. Methods for fast-tracking applications by children affected by HIV/AIDS. Make use of community structures & CBOs/NGOs to administer.
¨ Improve system of review & appeal

Financing
¨ BIG for adults & children = R40 billion (COSATU)
- increases in progressive taxes - personal income tax
- Increase in government borrowing
- More efficient use of govt. expenditure
¨ CDG for HIV+ children = R1.2 billion (approx. 6x current cost) (CHPI)
- Weigh against cost of non-provisioning (health costs etc). - Providing antiretro-viral treatment to pregnant women would decrease the number of HIV+ children by 50%

Further research / Action required
¨ Accurate prevalence data of HIV/AIDS, disability & chronic illnesses among children
¨ Needs analysis of these children
¨ Development of Needs-based assessment tool
¨ Evaluation of effectiveness & impact of existing CSG & CDG & means-test
¨ Macro-economic analysis of costs of proposal
¨ Economic analysis of costs of NON-provisioning
¨ Structures through which children without PCGs can access grants

Conclusion
¨ It is the Constitutional and International obligation of the State to provide social security to children.
¨ Providing Social Assistance is one form in which the State can and must attempt to improve their standards of living.
¨ There must also be concurrent development of services and development programmes.
¨ The First Call must be to Children & recognized in budgetary decisions.