Covid relief grant set to be extended by one year: report

Finance Minister Enoch Godongwana is expected to announce the one-year extension of the Covid-19 relief grant when he tables his budget in February 2022.

Citing senior government officials, the City press also reported that the debate now is whether to increase the subsidy from R350 to R460.

The grant was first introduced in 2020 to help those who lost their jobs due to the Covid-19 pandemic but who were not entitled to any other state grants or insurance -unemployment.

It has been extended several times, and the latest extension put it into effect until March 2022.

Several groups, including unions, have called for the grant to be made permanent and transformed into a universal income grant for the country. Some have pushed for the value of the grant to be extended to R500 per month or even R1500 per month.

A panel of experts recommended that the country has gradually implemented a basic income allowance, starting with institutionalizing a monthly social assistance payment introduced last year to offset the damage caused by the coronavirus pandemic.

While the exact amount of funding will depend on how much support the government plans to offer indigent South Africans, it will likely be up to taxpayers to meet the bill for these additional subsidies, whether through increases or reductions. ‘adjustments.

The panel said that an entry-level version of Basic Income Support (BIS) could be safely implemented using a combination of funding approaches, including:

  • Limited debt financing;
  • Improvements in tax revenues resulting from any stimulation of demand; and
  • Carefully calibrated tax increases where needed.

A report compiled by the group found that 20% of households – nearly 12 million people – are below the Food Poverty Line (FPL), equivalent to a monthly value of R595.

40% of the population, or the equivalent of a population of 29 million in 8 million households, is below the upper poverty line (UBPL), equal to a monthly value of 1,300 rand. Among the poorest 10% of the population, income from social allowances represents 95% of disposable income.

Currently, around 9.5 million people receive the R350 Distress Grant, costing the fiscus around R40 billion. At R460 per month, the cost would be closer to R53 billion.

Read: Every rand spent on South Africa’s new basic income allowance will be an additional tax rand

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