Question NW2052 to the Minister of Social Development

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13 September 2017 - NW2052

Profile picture: America, Mr D

America, Mr D to ask the Minister of Social Development

Whether her department has determined the costs of the envisioned universalisation of the (a) old age and (b) child grants; if not, in each case, why not; if so, what will it cost in each case?

Reply:

Yes, the department has determined estimates for the universalisation of the old age and child support grants.

(a) Three universalisation options are being considered for the old age grant to align tax policy with social assistance policy

  1. Universalisation at the age of 60 years aligned to social assistance policy will cost an estimated R23 billion
  2. Universalisation at the age of 65 year aligned to tax policy will cost an estimated R13 billion
  3. Universalisation at the age of 75 (both tax and social assistance have over 75 benefits) will cost an estimated R6 billion.

(b) The estimated cost for universalisation of the Child Support Grant is R23 billion. This is the amount required additional to the expenditure of the grant in its current form.

The Comprehensive Social Security Paper, which is currently in discussion at NEDLAC, suggests that these proposals be done in fiscal neutral manner. In other words, currently poor people below the means test are supported by social grant and wealthier people, above the tax threshold are supported by Tax Expenditure Subsidies and Tax rebates, with a few people in between these thresholds getting neither a grant nor support through the tax system. The principle around universalisation is to unite these fragmented systems and utilise the available funding for the benefit of everyone.

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