Is the R10 social grant increase enough?

During the Medium Term Budget Policy Statement (MTBPS) 2016, Minister of Finance Pravin Gordhan announced a R10 increase for child support grants. This is reportedly to keep up with inflation. With the R10 increase, the child support grant will now be R360.

The rising cost of living, coupled with the current tough economic environment means that money is not going as far as it once did. While Treasury has seen fit to increase the child support grant to R360, it still begs the question whether or not a R10 increase will help cover the rising cost of food and living expenses.

Elroy Paulus, national advocacy manager and spokesperson for the Black Sash Trust, believes that this increase does not counteract the impact of inflation. “If one corrects for consumer price index, which is the highest in the MTBPS period at 6.4%, the nominal increase of R10 on the lower grant which is R350 is an increase of 2.8%. The purpose of the adjustment to child support grant of R10 is specifically to address food inflation costs. If you look at the food inflation index it is over 10%.”

An increase in social grants

In a statement released by the Black Sash following the MTBPS, it said: “The increase of R10 in October 2016 for recipients of Child Support Grant’s (CSG) “to keep pace with inflation” is less than three percent, significantly less than this year’s inflation rate of 6.4% - and specifically more than 10% for food inflation, for which the increase was specifically intended to address. At best – the lowest grant, viz. the CSG was increased by a mere 2.8%. At this time it remains imperative for government to assist the most vulnerable and poor with at least, appropriate increases as a minimum support intervention.”

It is important to note that the increase applies to other types of grants as well, the child support grant is simply the lowest value social grant.

Paulus highlighted that at the time the budget was developed, there are increasing demands from higher education with regards to funding. As a result, he pointed out that it is a juggling act for Treasury to meet various needs and demands.

“The importance of social security and the right of access to social security, particularly those unable to support themselves, requires a stronger intervention by the state. It is regrettable that this increase will not keep pace with the real inflation needs of LSM (living standards measurement) one to five, who are the recipients of social grants. And it affects a large number of citizens in our country. Of 17 million grant recipients, roughly 12 million of those are recipients of child support grants,” revealed Paulus.

He added: “The reality is that the quality of life of poor people struggling to survive is going to be far more difficult.”

For more information on how to apply for social grants, click here.