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Expanding the Social Security Net in South Africa: Opportunities, Challenges and Constraints

Author: K Pauw and L Mncube
Date: 2007
Size: 300 pages (34 KB)

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Summary

Should the social security welfare system be expanded in South Africa? This paper from the International Poverty Centre addresses this question in light of the fact that social welfare grants have become an important source of income for many South Africans. Expansion is likely to be possible only through reallocation of government expenditures. Indeed, education and health expenditure have already declined in favour of increased welfare transfer. Thus, budgetary and service delivery constraints currently present a strong argument against expansion in the immediate future.

South Africa has developed an extensive social security system. The growth in government spending on social grants since 2001 has resulted in a massive increase in the number of social grant beneficiaries. Grants include old age pensions, disability grants, foster care grants and child support grants. Most welfare transfers are means tested.

Social security provision is important in the fight against chronic poverty in South Africa.Yet, despite the rapid expansion of the social security net, poverty levels remain high. Whilst many feel that social security provision should be expanded further, any situation in which a small portion of the population is asked to finance welfare payments for a relatively large portion is untenable.

• Medium Term Expenditure Framework (MTEF) forecasts suggest that welfare spending will remain fairly stable over the next few years if no new programmes or changes in eligibility criteria of current programmes are introduced.
• Any expansion of social security provisioning will have implications for service delivery. The South African Social Security Agency (SASSA) will have to play a central role if the current welfare grants system is changed.
• Whilst conditional cash transfers (CCTs) might encourage pupils to attend school on a regular basis, improving the quality of teachers and the diets of pupils may also be a cause of low attendance.
• While CCTs linked to hospital attendance may be considered, health care services are currently suffering from supply constraints. These may be made worse if demand for health care was stimulated.

Nevertheless, given the success of CCT programmes in other developing countries, there is an argument for them to be introduced in South Africa. For a CCT programme to be implemented successfully, the Departments of Social Development, Education and Health would have to improve their service delivery records and co-operate very closely. Furthermore:

• consolidation of current programmes is most important at this stage. Investigations into irregularities should be made before new programmes are considered.
• the newly instituted SASSA should be given a few years to get the fundamentals in place, establish credibility and improve service delivery before introducing new programmes, including CCT programmes.
• CCT programmes are unlikely to have a major impact on education programmes.
• it is crucial to address low functional literacy rates, poor numeracy skills and the low employment prospects of school leavers as the chief focus of educational efforts.
• with regards health services, training medical personnel, improving working conditions and investing in infrastructure should be chief priorities. Accessibility to health clinics should be enhanced, especially in rural areas.

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Source: Pauw, K., and Mncube, L., 2007, 'Expanding the social security net in South Africa: Opportunities, challenges and constraints', International Poverty Centre, UNDP, Brazil
Author: Kalie Pauw , karl.pauw@uct.ac.za ; Liberty Mncube , Liberty.Ncube@uct.ac.za
International Policy Centre for Inclusive Growth (UNDP), http://www.undp-povertycentre.org/