Since South Africa embraced its post-apartheid Constitution in 1996, the country made significant progress in realizing the right to social security and in reducing poverty and inequality.
Policies, legislation and administrative infrastructure have enabled the government to create an extensive social security system. Two out of three households benefit from a social allowance and 60% of the workforce is covered by social insurance.
As South Africa scores human rights day on March 21, it is worth reflecting on what has been achieved, the policies and interventions needed, and possible future trajectories.
What is in place
Social security consists of several pillars. Social assistance is one. This is paid by the State to different categories of vulnerable people such as the elderly, the physically and mentally handicapped and children and their families.
The support net has grown from three million beneficiaries in 1995 to over 18 million in 2022.
The second pillar is social insurance. This takes the form of work-related contributory schemes, such as unemployment, health and pension benefits. Informal social and family support also plays an important role.
Some other interventions are generally not classified as part of the country’s social security system. These include public employment schemes, school feeding and a social package of free basic services. Free primary health care, free education for poor children, as well as subsidies to early childhood development centers and NGOs to provide social services also fall into this category.
More recently, to mitigate the impact of the COVID-19 pandemic, a new temporary Distress Social Relief Grant was put in place. This grown up from 5.3 million beneficiaries in 2020 to 10 million in 2022. It targets the unemployed and informal workers unable to support themselves.
Social assistance is clearly the foundation of the country’s social security system. It works alongside tiny budgetary allocations for social services such as community mental health, addictions and gender-based violence, among others. Social services have always been underfunded and this trend continues.
But there are some problems with the social security system.
Importantly, it does not adequately address or address the problem of unemployment when most of the poor are unemployed, or in precarious, low-paid jobs and in the informal sector.
In addition, the system is poorly coordinated. The links between the different programs are weak. For example, caregivers who receive child support payments do not have easy access to other services such as social and nutritional support, public employment and early childhood education. This compromises the structural efficiency, effectiveness and responsiveness of the system to meet a diversity of needs throughout the life cycle.
Policy gaps and interventions
The role of social assistance is now widely recognized as the foundation of the country’s efforts to accelerate poverty reduction and income redistribution. The question is how best to achieve this.
First, social security reforms are needed to close the gaps. These include support for the long-term and chronically unemployed and informal workers.
Second, benefit levels of social grants, especially child support, need to be increased to more effectively address malnutrition. The current grant amount is less than the food poverty line.
Innovative outreach is also needed to improve the inclusion of a large number of eligible children who do not receive the scholarship. These are estimated at 17.5% of eligible children.
There is also growing recognition that unless employment develops – through various public and private measures – and this work is sustainable, social assistance alone has a limited effect on lifting people out of poverty and on improved income mobility. Job growth and better quality jobs would draw more people into the social insurance system and create a larger middle class.
The social and economic challenges that have been intensified by the pandemic are expected to persist. This could further worsen structural unemployment, with some jobs permanently lost. Continuous monitoring of economic recovery and social development indicators over time is likely to contribute to more effective policy-making.
Social policy solutions are needed to extend interim social assistance in the short to medium term. These must also make systemic improvements to overcome delivery challenges. South Africa may well follow other countries that maintain social registers such as those in Latin America, Indonesia and Mauritius. These allow authorities to identify potential beneficiaries in need and assist in planning. This will in turn improve the responsiveness of social support.
The temporary expansion of social assistance due to the pandemic poses new challenges. If the COVID-19 relief grant is phased out or phased out as the economy begins to recover and generates jobs, tricky political issues may arise. There is a risk of significant political destabilization. Indeed, the social and humanitarian crises that the grant sought to alleviate would persist.
It is therefore likely that the COVID-19 Distress Relief Grant may by default become a basic income grant. It is unclear what form this might take, but the government announced to explore his options.
Questions remain about the affordability of these policy options. Cost-benefit analyzes will be needed to facilitate political commitment and decision-making. The costs – and results – will differ depending on whether a basic income grant prioritizes those most in need or is given to all income groups.
Read more: Basic income support in South Africa: Risks, rewards and what it will take
Given the country’s budgetary constraints, it should be taken into account that other social policies and social development programs risk being crowded out by the continued expansion of income support.
The increase in cash transfers at the expense of non-cash forms of social provision – including health and mental health services, education, early childhood education, social work services, housing and basic services, such as water, sanitation and electricity – could also be counterproductive.
Carefully designed, innovative and evidence-based complementary interventions are needed. These should build human capital and human agency, strengthen families and boost community-level livelihoods. Along with other similar interventions, these should ultimately aim to break the intergenerational cycles of disadvantage.