Conditional Cash Transfer Programs in South Africa

Transcription

1 Third International Conference on Conditional Cash Transfers Istanbul, Turkey June 26-30, 2006 Conditional Cash Transfer Programs in South Africa Daniel Plaatjies South African Social Security Agency June 26, III.c.i

2 South African Statistics in Brief Population in 2005 Gross Domestic Product estimate GDP per capita (per annum) Statistics in Brief ± 46,9 million R billion R or $ 5 062(US) Economically Active Population - March 2005 ± 16,2 million Unemployment rate (strict definition) - March 2005 Average Exchange Rate for ,5% R6,36 per $US R7.91 per EURO Poverty Rates in South Africa in 1995 Rands *** 1995* 2002** R4 248 per annum in 1995 prices - based on satisfying mimimum dietary requirements 51.40% 48.50% $2 per day 24.20% 23.80% $1 per day 9.40% 10.50% GINI coefficient * using 1995 Income Expenditure Survey ** using 2002 Labour Force Survey *** Source: UNDP Human Development Report for South Africa, Note: There is no national poverty line in South Africa.

3 The South African Social Security Agency Mandate of the Agency Deliver comprehensive social security services to the vulnerable and poor as per the South African Constitution Create an enabling environment for sustainable development Deliver integrated, sustainable and quality services in partnership with other government departments and non-government organizations Legislation governing Social Security Services The Social Assistance Act, 2004, targeting: Older persons (Social Old Age Pension) People with disabilities (Disability Grant) Children Child Support Grant to children under the age of 14 Foster Care Grant to foster children Care Dependency Grant for children dependent on care from primary caregivers Aged Persons Act, 1967 Child Care Act, 1983

4 Income Support through Cash Transfers STANDARD CRITERIA for ALL GRANT TYPES The applicant must: be a South African Citizen or permanent resident and be resident in South Africa at the time of application not be maintained/cared for by a state institution and not be in receipt of any other social grant, unless specified Grants Target Group Criteria Conditions Means Test Thresholds Other Average Grant Value per annum Monthly Annual Old Age Pension War Veteran Disability Temporary or Permanent Age Limitation: Female: >= 60 Male: >= 65 Age Limitation: Male: >= 65 Age Limitation: Female: 18 to 59 Male: 18 to 64 The applicant (and spouse) qualifies if the following means test are met: Single Person Assets must not exceed R The total annual income of the applicant, after all permissible deductions must not exceed R per annum. Married Person Assets must not exceed R The total annual income of the applicant, after all permissible deductions must not exceed R per annum. A residential dwelling is a example of a asset, but is not taken into consideration if the applicant resides therein. Permanent: disability lasts for more than a year Temporary: disability lasts between 6 months and a year. Condition: Need to comply with the DOTS system (in Western Cape Province) to ensure that medication is administered R780 R780 plus R15 R780 R9 360 R9 540 R9 360

5 Income Support through Cash Transfers Target Group Criteria Conditions Average Grant Value per annum Means Test Criteria Other Monthly Annual Child must be: Orphaned Abandoned At risk Abused Neglected The foster child must be SA citizen and the child must pass means test Court of law indicates foster status The annual income of the child must not exceed R Income of a foster parent(s) not considered Age Limitation: Child: <=18 Combined annual income threshold (applicant, spouse and child) after permissible deductions is R The annual income of the child must not exceed R Care dependent foster parent s income not taken into consideration Reviewed every 2 yrs Social Workers assess child s wellbeing, attendance at school, health care etc Can qualify for a care dependency grant The child may not be maintained by a state institution In the case of a foster child parents can qualify for both grants R560 R6 720 R780 R9 360 Age Limitation: Child: < 14 The primary care giver (applicant), spouse and child qualify for the means test if they live: in a rural area and the income is below R in urban area in an informal dwelling and the income is below R in an urban area in a formal dwelling and the income is below R9 600 Cannot apply for more than 6 nonbiological children The primary care giver may not be in receipt of any other child grant for the same child R180 R2 160

6 Service Delivery Success Social Grant Beneficiary Numbers April 1997 April 2000 April 2003 Mar 2006 Average Annual Growth Rate Old age % War veterans % Disability % Grant in aid % Foster care % Care dependency % Child Support % TOTAL % Source: National and Provincial Departments of Social Development and National Treasury

7 Service Delivery Success Source: Fiscal Incidence Study, 2005 S. v.d. Berg, I. Woolard and C. Simkins

8 Strengths of the current system Pro-poor and contribute to poverty directly Beneficiaries receiving social grants increased from 2.6 million in 1994 to over 8 million in March million grants were paid in March 2006 Between 2000 and 2004, grants have expanded by R22 billion (in 2000 real terms) which translates to R500 per person per year State transfers contribute to ⅔ of the income in households from the poorest quintile Well targeted regarding poor households in the poorest 2 and 3 quintiles

9 Weaknesses of the current system Means test thresholds have not kept pace with inflation, although grant values are adjusted annually Heterogeneity of the Grant process across the 9 provinces (historical) varied grants administration, payments, interpretation of Acts and regulations, nonuniform standards and services Fraud and corruption due to poor verification systems with other key government departments (poor coordination of IT systems and services) Despite being well-targeted, grants don t adequately address the needs of the poorest 20% of the population No income support to unemployed individuals Unemployment Insurance provides temporary relief

10 Policy and Research Gaps Universal versus targeted/conditional cash transfers? Due to high unemployment rates, there is a lot of pressure from Unions for a universal Basic Income Grant Individual versus family grants? Family grants could address households more wholistically through CCTs targeting the unemployed, the elderly, children and people with disabilities There are numerous policies and programmes developed by various government departments to address the needs of the unemployed, poor or the vulnerable. More effective implementation through greater coordination could come from using the cash transfers as levers to conditionalise investment in Human Capital, without being PUNITIVE: The Human Science Research Council is piloting a CCT study in the Kwa Zulu Natal linking the Child Support Grant to ECD, free primary health and school nutrition.