Mini budget — SRD grant extended for another year to March 2024 

The government buckled to widespread pressure this week, with the announcement of a year-long extension of the Covid-19 social relief of distress (SRD) grant to 31 March 2024. The grant, which currently stands at R35o a month, was first introduced in April 2020 to negate the effects of the Covid pandemic. It has now been extended for the third time. However, funding for the grant remains a topic of hot debate with the National Treasury previously saying it costs the country R50-billion a year. 

Options that have been offered up to date include a wealth tax on those who earn more than R1-million a year or an increase in VAT. In his Medium-Term Budget Policy Statement on Wednesday, 26 October, Finance Minister Enoch Godongwana says that the grant extension will not compromise fiscal consolidation. “Any permanent extension or replacement [of the SRD grant] will require permanent increases in revenue, reductions in spending elsewhere, or a combination of the two.” 

Godongwana emphasised despite the provision in the mini-budget, discussions on the future of the grant are ongoing and “involve very difficult trade-offs and financing decisions”.  

Earlier this year, the income threshold means test for the SRD grant was increased from R350 to R624 a month, widening the net of those who qualify for the grant. Currently, around 7.5-million people receive the grant and the department of social development expects this to now increase to around 10.5-million recipients. However, with the easing of the income threshold, more checks and balances have been introduced. One of the stipulations, for example, is that South Africans may not “unreasonably refuse” to accept employment or educational opportunities. How this will be enforced or checked has not been spelt out. The more stringent qualification criteria resulted in a rollover of R2-billion of unspent funds as fewer applicants took up the SRD grant.