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, 2006 06-26-III.c.i
South African Statistics in Brief Population in 2005 Gross Domestic Product - 2005 estimate GDP per capita (per annum) Statistics in Brief ± 46,9 million R 1 510 billion R 32 196 or $ 5 062(US) Economically Active Population - March 2005 ± 16,2 million Unemployment rate (strict definition) - March 2005 Average Exchange Rate for 2005 26,5% 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 0.569 0.635 * using 1995 Income Expenditure Survey ** using 2002 Labour Force Survey *** Source: UNDP Human Development Report for South Africa, 2003. Note: There is no national poverty line in South Africa.
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
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 295 200 The total annual income of the applicant, after all permissible deductions must not exceed R 20 232 per annum. Married Person Assets must not exceed R 590 400 The total annual income of the applicant, after all permissible deductions must not exceed R 37 512 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
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 28 320 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 48 000 The annual income of the child must not exceed R19 680 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 13 200 in urban area in an informal dwelling and the income is below R 13 200 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
Service Delivery Success Social Grant Beneficiary Numbers April 1997 April 2000 April 2003 Mar 2006 Average Annual Growth Rate Old age 1 737 682 1 860 710 2 009 419 2 131 836 2.30% War veterans 12 047 7 554 4 594 2 853-14.79% Disability 732 322 612 614 953 965 1 313 963 6.71% Grant in aid 10 082 8 748 12 787 26 469 11.32% Foster care 41 865 79 937 138 763 307 560 24.80% Care dependency 2 895 24 438 58 140 89 220 46.36% Child Support - 352 617 2 630 826 6 978 643 45.23% TOTAL 2 536 893 2 946 618 5 808 494 10 850 544 17.52% Source: National and Provincial Departments of Social Development and National Treasury
Service Delivery Success Source: Fiscal Incidence Study, 2005 S. v.d. Berg, I. Woolard and C. Simkins
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 2006 11 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
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
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.