South Africa’s cost-of-living crisis, budgetary pressure and shortfall in tax revenue could spell the end of SASSA SRD grants, unless government makes some tough decisions.

The South African Social Security Agency (SASSA) is in charge of the SRD or Social Relief of Distress Grant. It has administered the grant since the outbreak of the COVID-19 pandemic in concurrence with the Minister of Finance’s Social Assistance Act.

WHO QUALIFIES FOR SASSA SRD?

Government has to make some tough calls to avoid the end of SASSA SRD grants. Picture: SASSA.

The SASSA SRD grant is open to all South African citizens, refugees, asylum seekers and special permit holders aged between 18- and 60-years old. For more information on whether you can apply click HERE.

However Daily Investor is reporting that unless government increases tax or reduces spending, the National Treasury will be unable to continue funding the R350 per person, spelling the end of SASSA SRD grants.

END OF SASSA SRD GRANTS

Picture: File.

President Cyril Ramaphosa was delivered the news by treasury ministers that government is in the midst of unprecedented revenue pressure. And should the government want to continue funding the R350 SASSA SRD Grant, all South African citizens may have to foot the bill. This would mean a two-percentage-point increase in Value Added Tax (VAT).

If the president doesn’t like that option to avoid the end of SASSA SRD grants, another would be to cut several government initiatives. Potential programs that could face the chop include welfare support, food security, environmental protection and informal settlement upgrades.

ROCK AND A HARD PLACE

Finance Minister, Enoch Godongwana. Image: Twitter/@GovernmentZA.

Finance Minister Enoch Godongwana said South Africa’s economic growth and revenue have been hampered by the energy crisis, load-shedding and logistics problems. Tax revenue for the year is several billion Rand below what was anticipated. And one way to curb this is to increase tax to fund the government’s growing bills.

Godongwana has put the following options on the table to the President Ramaphosa to avoid the end of SASSA SRD grants:

• Increase VAT. Which will be a challenging and unpopular option. Especially with a national election in 2024.

• Borrow more money to keep the SASSA SRD grants going, which has negative long-term ramifications.

• Cut government initiatives and budgets, which will impact South African society as a whole.

• Or a fourth option which is a balanced combination of all three.

COSTING SA BILLIONS PER MONTH

Treasury warns of the end of SASSA SRD grants. Picture: File.

According to a GroundUp report featured on Business Day, every month the South African government spends more than R22 billion on social grants. This equates to 17% of tax revenue. Of this, 8.5-million people receive the R350 SASSA SRD grants.

source:Budget CUTS could spell the end of SASSA SRD grants (thesouthafrican.com)