The Sassa Grants Could Be Used to Launch Basic Income Grants

The Sassa Grants Could Be Used to Launch Basic Income Grants. Nearly three years have elapsed since the inception of the R350 grant, prompting a compelling argument for its evolution into a Universal Basic Income grant as a response to the country’s deepening income inequality.

The Sassa Grants Could Be Used to Launch Basic Income Grants

Origins of the R350 Grant

Introduced during the height of the Covid-19 pandemic, the R350 grant was initially implemented by Sassa (South African Social Security Agency), effectively extending assistance to an additional 11 million individuals alongside the existing 18 million social grant beneficiaries. The Social Relief of Distress grant has undergone three successive temporary renewals since its introduction.SASSA Status Check | SRD R350 Payment Dates for 2023 

Towards a Permanent Solution

In the wake of these developments, a growing chorus of voices has advocated for the permanence of the R350 grant and its transition into the foundation of a Universal Basic Income Grant (B.I.G). Duma Gqubule, Founding Director at the Centre for Economic Development and Transformation, suggests that this transformation could be achieved through the establishment of an unfunded Basic Income Grant.

The Unfunded Basic Income Grant Proposal

Gqubule’s proposal entails the conversion of the existing Child Support Grant into a Basic Income Grant, linked to the nation’s three distinct poverty lines: food poverty, lower-bound poverty, and upper-bound poverty.

According to Gqubule’s model, the B.I.G grant would initiate with monthly disbursements of R655 in the current year, increase to R900 in the subsequent year, and ultimately reach R1546 by the third year of implementation.

In this envisioned framework, a mother with three children, for instance, would receive a B.I.G for herself and each of her children. The current child support grant, amounting to R505 per month, falls below the food poverty line, a circumstance that Gqubule deems unacceptable.

Economic Implications of the Universal Basic Income Grant

By calculating the value of the Basic Income Grant in rands per person per month, Gqubule estimates a cumulative cost of R547.8 billion. He asserts that nearly half of this expenditure could fuel an annual 2.5% to 3.8% stimulus to the country’s Gross Domestic Product (GDP) through augmented tax revenue, ultimately generating over 2 million jobs.

Challenges of the Current R350 Grant

Presently, the R350 grant benefits 8.4 million approved recipients, although it has garnered applications from over 14 million individuals. Gqubule raises concerns about the grant’s susceptibility to inflation and its reinforced eligibility criteria via means testing.

Conclusion

As the R350 grant continues to impact millions of lives, the proposition of transitioning it into a Universal Basic Income Grant offers a potential avenue to tackle income inequality and stimulate economic growth. While challenges and considerations remain, this transformative initiative holds the promise of creating a more equitable and resilient socioeconomic landscape for South Africa.