Latest news with #socialrelief
News24
17-07-2025
- Business
- News24
Does the targeted social relief grant punish work and perpetuate poverty?
The introduction of the targeted social relief grant (TSRG) on 1 June 2025 has been accompanied by quiet satisfaction in circles that believe government transfers are the solution to poverty. At R720 per month, the new scheme replaces the basic income grant (BIG), which had ballooned into a costly and unsustainable experiment. The TSRG is being marketed as more focused, affordable and efficient. But policies must be judged by their incentives, not their intentions. The design of the TSRG discourages initiative. Any unemployed person who attempts to earn even a modest income – through part-time work, informal trading or entry-level employment – risks immediate disqualification. The reward for productive effort becomes the loss of support. This arrangement fosters passivity, not upward mobility. Many recipients, acting rationally within the rules provided, will choose to remain idle rather than risk becoming ineligible. When the state creates a condition in which individuals are penalised for trying to lift themselves out of poverty, it arrests their development and saps their self-respect. A population so managed becomes compliant but not empowered. South Africa cannot afford such policies. The 2024 Fraser Institute Economic Freedom of the World Report placed the country firmly in the bottom quarter of nations globally. The reasons are clear: inflexible labour laws, an overextended state and punishing regulatory burdens. These are not abstract academic rankings – they are direct indicators of economic failure. Unemployment remains structurally high, especially among young people, and entrepreneurship continues to be stifled under layers of bureaucracy. Successful countries have taken a different route. In Singapore, the emphasis is on education, skills and enterprise, not permanent grants. Switzerland keeps welfare limited and locally administered, with strong expectations of personal responsibility. For decades, Hong Kong allowed markets to allocate labour and capital with minimal interference. The result in each case was widespread prosperity. Financing the TSRG will impose real costs. Treasury officials have signalled the inevitability of new taxes. In practice, this means punishing those who are already carrying the burden of employment creation, capital formation and tax compliance. These are the very citizens and businesses on whom recovery depends. A policy that extracts more from the productive to fund inactivity cannot produce long-term stability or growth. The motives behind the TSRG warrant scrutiny. It is difficult to avoid the conclusion that the ruling party is seeking to secure votes through dependency rather than expanding opportunity. That approach is not merely fiscally reckless – it undermines the moral basis of citizenship and distorts the relationship between state and individual. There are alternatives. The job seekers' exemption certificate (JSEC), long proposed by the Free Market Foundation, would allow unemployed individuals to opt out of harmful labour legislation that prices them out of the job market. Freed from minimum wages, centralised bargaining and race-based hiring requirements, young South Africans could finally be allowed to trade their willingness to work for real, lawful employment. Moreover, the state can find the means to assist the truly destitute without expanding dependence. It need only reduce waste. End cadre deployments. Liquidate bankrupt state-owned enterprises. Deregulate the informal sector. When government spends less and interferes less, private initiative thrives – and poverty recedes. South Africans do not lack energy, talent or ambition. What they lack is permission to act freely in the labour market. The TSRG does nothing to remove the barriers holding them back. On the contrary, it strengthens them. The path to prosperity does not run through a growing welfare roll. It runs through employment, trade and the free exercise of one's talents. If the government truly wishes to serve the poor, it should dismantle the obstacles to self-reliance – not deepen them.
News24
30-06-2025
- Business
- News24
R370 grants: Faulty bank account scans cause ‘catastrophic' rejections
South African street vendor and widow Brenda Mtshali is furious that an automated message on her phone means she will have to skimp on food for her six children. She is one of an estimated 10 million eligible South Africans excluded from welfare payments due to administrative obstacles, including problems with an algorithm-based income verification check, recent research has found. Mtshali, who sells tomatoes in the Soweto township, had her online application for a Social Relief from Distress (SRD) grant rejected more than half a dozen times, receiving an automated message that said "means income source identified." She said the automated means test - which scans bank accounts for a poverty line threshold of R624 - likely took into account money she was occasionally loaned by family members, which does not qualify as monthly income. But sometimes she was rejected when she had no extra funds in her bank account. She has travelled to her local branch of the South African Social Security Agency (SASSA) several times to query her rejection, only to be told to lodge her appeal online. "We don't want to speak to a computer or an automatic message ... it's like shouting into an empty room and only hearing your echo," Mtshali, 58, said. Responding to emailed questions, SASSA said people who were rejected could appeal online to the Department of Social Development (DSD). DSD did not respond to requests for comment. From Britain to Togo, algorithms are being used to help distribute social grants and welfare payments, but digital rights experts warn they can be inaccurate and biased in some cases. The SRD grants are vital in South Africa, where unemployment stands at about 33%, one of the highest rates in the world. "We know the extent and depths of poverty in the country," said Kelle Howson, a social scientist at the Institute for Economic Justice and co-author of the research on SRD grant exclusion. "There needs to be a move from this restrictive poverty targeting to a system that's much more inclusive," Howson said. 'Failing to reach those in need' The SRD grant programme was rolled out to support unemployed and working-age South Africans during the COVID-19 pandemic in May 2020. It is worth R370 per month. In April 2022, a formal means test was introduced that involved monitoring potential beneficiaries' bank accounts to see if they had more than the minimum threshold of R624. After the new means test was introduced, some 8 million beneficiaries were approved, down from 10.9 million in 2020, according to the IEJ report. This is despite there being an estimated 17 million to 18 million eligible people, the report said. The IEJ surveyed 900 people and found only 10.3% of eligible respondents received the grants - an erroneous exclusion rate of 89.7%. Eighty percent of all rejections were based on the bank verification test, which the IEJ said should only cover 24% of cases. It said all financial inflows - including child maintenance, loans, one-off donations, funds held for others - were incorrectly classified as "means." In May, the national treasury made SASSA's operating budget conditional on the means tests being applied to all social grants, including child support and pensions, the IEJ said. The Ministry of Finance in emailed comments said: "In the age of large data, it is increasingly necessary to build social security registries and cross-checks across multiple databases to avoid incorrect payments and double dipping where it is inappropriate." It also said no grant rejection is permanent, and clients are called in to "verify their income and explain the situation" to ensure public funds are appropriately spent. Applying the means tests so broadly could cause "catastrophic harm to vulnerable groups," the IEJ said, describing bank account surveillance, flawed government data and biometric profiling as "invasive" verification methods. The IEJ report also found only 5% of those surveyed had successfully appealed over two years. Data from SASSA shows 98% of 10 million appeal applications were unsuccessful in the 2024 financial year. With the SRD grant system fully online, "even if you walk into an office for help, you will be redirected to use their online system to appeal," said Kgothatso Sibanda, a helpline manager with the Black Sash human rights charity that assists grant applicants. Surveillance and survival Howson said data collection was also a rights concern as regulations stipulate that any grant applicant must allow government agencies to verify eligibility through algorithmic checks. This means government agencies can cross-check personal information with credit bureaus or banks, said Howson. "So basically you sign away all your rights to privacy and data protection by applying for a grant," she said. SASSA said its actions were governed by the Social Assistance Act and that "checks and balances are a prerequisite to ensure that we safeguard (the) public purse." The IEJ report said applicants should be allowed to submit supporting documents and means tests should be done over a longer period to rule out inconsistencies. Sibanda said "beneficiaries do not fully understand what they are consenting to" and argued that a hybrid system - online and in-person - would help people with limited digital literacy. "Yes to digitisation, but no to leaving people behind, and this system is leaving people behind," said Sibanda. In January, the High Court in Pretoria ruled that some SRD regulations were unconstitutional, but the government has lodged an appeal. In the meantime, Mtshali, her brother and her working-age children, all of whom were rejected, are stuck. They cannot afford to travel to job interviews or print their CVs. When funds are low, Mtshali feeds her family from her stock of tomatoes. "It's now just about getting food on the table, it's about survival," she said.
News24
12-06-2025
- News24
Social grants unpaid as beneficiaries struggle with Sassa's online verification system
Beneficiaries of the R370-a-month social relief of distress grant are struggling to access the grant because of failures in the online biometric verification system. Many have to verify their identities to receive the grant, but cannot do so without an online link, which is often delayed or never sent. Activists say the system is unreliable and excludes applicants who do not have smart ID cards. Beneficiaries of the R370-a-month social relief of distress (SRD) grant are battling to verify their identities online - a requirement to access the grant. Black Sash helpline manager Kgothatso Sibanda said the organisation was receiving up to 35 calls a week from beneficiaries who had not received the verification link the SA Social Security Agency (Sassa) sends during the verification process. Most of the complaints were from people who had just turned 18 and discovered that their IDs had been fraudulently used by other people to apply for the grant, GroundUp reports. She said many grant recipients didn't have smartphones or could not get data, making it impossible to access the links. And calling the Sassa helpline often led nowhere, she said. Asked for comment, Sassa told GroundUp it was unaware of any problems with the SRD verification system and requested the names of those affected. A week after we sent Sassa their details, the agency said the responsible official was on leave. We are yet to receive a further response. Around nine million people rely on the SRD grant, although this number fluctuates monthly due to means testing. Earlier this month, Sassa announced that all new applicants must now complete biometric identity verification. READ | Cops, witnesses in the Sassa card fraud scandal intimidated, court hears Beneficiaries who still have a green ID book, have a higher chance of failing the biometrics due to the low quality of the photo on the Home Affairs data system. Dalene Raiters from Eldorado Park in Johannesburg told GroundUp she got her grant in 2023. A few months later, her account was flagged when Sassa suspected she was a victim of fraud and her grant was placed on hold until she completed the online biometric verification. To complete this process, she applied for a smart ID card. 'I had to pay for transport [to home affairs] and then R140 to get the ID. The taxi fare was more than the ID itself. My taxi fare totalled R320,' she said. She began receiving payments in July 2024 but was blocked again in May 2025 for 'identity verification'. She requested the online link to complete the biometric process, but her account is still blocked. Without the grant, she has had no choice but to turn to a loan shark. She added: I must go again to the mashonisa in June. Their interest rates are 50%. I normally borrow R200 and then I pay back R300. Raiters said she used the grant to buy food. She lives with her two unemployed sons and two grandchildren. Both she and her 28-year-old son receive the SRD grant, and her six-year-old grandson gets the R560-a-month child support grant. Each month, she buys the Shoprite R99 grocery combo: 2.5kg white maize meal. 2kg parboiled rice. 750ml sunflower oil. 400g chilli beef soya mince. 500g macaroni or spaghetti. 'I couldn't buy that this month, and now we're struggling,' she said. Lincaster Davids, also from Eldorado Park, has not been paid since March. He tried to update his cellphone number and was asked to complete biometric verification, but couldn't. Without passing the biometric verification process, Davids can't update his contact details, and he can't access the grant. 'I went to the Sassa office in Eldorado Park, but when I got there, they cut the line and said I must come back another day,' he said. To collect the SRD grant at retailers, beneficiaries must show their IDs and the cellphone number linked to the SRD account. A message is then sent to that number for approval before the R370 can be withdrawn. Social grants activist Elizabeth Raiters said she had been inundated with complaints from beneficiaries. Raiters said: Ten people come to my house every day, including weekends. I have to keep turning them away, explaining that the system is not working. When I walk in the street, people stop me to assist them with the same issue. She said the verification system was unreliable. 'It's either down or very slow, or when beneficiaries receive a link it doesn't work.' 'The SRD is becoming more of a punishment than serving its purpose. It's the only grant that is so uncertain,' Raiters said. The Black Sash's Sibanda suggested that Sassa set up help desks at local offices where beneficiaries can be manually verified by staff.
