The social relief of distress: Legal and administrative aspects of the social relief of distress grant

16 November 2021

INTRODUCTION

Social grants are normally established and regulated by the Social Assistance Act and its regulations. The Social Relief of Distress and the Social Relief for Caregivers grants are different. They were established by Directions issued by the Minister of Social Development, themselves authorized under regulation 4(5) of the regulations made under section 27(2) of the Disaster Management Act. The full texts of the relevant Directions are presented in Annexure 1.

ANALYSIS

The Directions provided for the Social Relief for Caregivers for the six months from May to October 2020. They also provided for the Social Relief of Distress from May 2020 to April 2021. Information on Social Relief of Distress grants approved was provided in the response to Parliamentary Question 2021 on 7 May 2021, reported in Annexure 2. Altogether 68 228 532 monthly grants were made over the 12-month period, representing an aggregate disbursement of R 23.9 billion.

The amendment to the Directions established an appeal process in the event that an application for a grant was rejected. The Black Sash^[1] has criticized the process on the following grounds:

i. The most common reason for rejection was conflicting information with national government databases. Numerous applicants were rejected because they appeared on outdated UIF, SARS, NSFAS and SASSA (SOCPEN) databases. Applicants were not given the opportunity to provide additional information to substantiate their eligibility. SASSA indicated that it did not have the capacity to review new information.
ii. Applicants who applied for a NSFAS bursary were rejected regardless of whether the NSFAS bursary was approved or not, or had terminated.
iii. Applicants who had uncollected UIF benefits (even as low as a couple of rand) were rejected on the basis of having an outstanding balance linked to their ID number.
iv. Applicants who had submitted an IRP5 years earlier were rejected on the basis of having previously had an income.
v. Applicants without IDs were rejected from receiving the Covid-19 SRD Grant. Many people struggled to get ID documents due to the closure and/or limited operating hours of the Department of Home Affairs offices during the lockdown. Obtaining a temporary ID was also beyond the financial means of many Covid-19 SRD Grant applicants, which resulted in their grant applications being rejected.

In an address to the nation on 25 July 2021, the President gave the following undertaking, which stabilizes the situation for the next nine months:

To support those who have no means of supporting themselves, we are reinstating the Social Relief of Distress Grant to provide a monthly payment of R350 until the end of March 2022.

Caregivers are eligible to apply for the SRD grant. Annexure 3 sets out available information on the extension of the SRD grant.

The Social Relief Distress grant of R 350 per month has been frequently been criticized as being inadequate, with some suggesting that an amount equal to the food poverty line of R 585 per month would be more appropriate. Yet the microsimulation work cited in the answer to the parliamentary question found that, although COVID would have increased the percentage of the population living below the food poverty line from 20.6% to 32.1% had there been no relief intervention, the percentage after the relief measures actually dropped to 18.8%. Similar results were found at the lower and upper bound poverty lines. Without the relief measures, the Gini coefficient would have increased from 0.64 to 0.67. With them it dropped to 0.61.

Should the Social Relief of Distress grant give way to a permanent grant to the able bodied between the ages of 18 and 59, either conditional or unconditional, the Social Assistance Act will have to be amended since, at some time in the future, the state of distress will come to an end.

A more detailed analysis of the effect of the Social Relief of Distress grant is possible on the basis of available quantitative information. This will be presented in a later brief in this series.

By Charles Simkins, Head of Research, HSF, 16 November 2021

ANNEXURE 1 – DIRECTIONS OF THE MINISTER OF SOCIAL DEVELOPMENT

Government Notice No R 517 in Government Gazette No 43300, 9 May 2020

Pp 7 – 8

[Addition to Paragraph 6(l) of the Directions published in Government Notice No 430, Government Gazette No 43162 of 30 March 2020, as amended by Government Notice No R 455 of 7 April 2020]

(vii)

(hh) A special COVID-19 Social Relief of Distress for Caregivers of R 500 per month per Child Support Grant caregiver will be provided. All existing caregivers will automatically qualify and receive this benefit along with their existing monthly benefit.

[On p 11, it is specified that the Social Relief of Distress grants are only payable until the end of October 2020.]

(viii)

(cc) A special COVID-19 Social Relief of Distress of R 350 per month may be provided for the period indicated herein to distressed individuals who are:

i. South African citizens, permanent residents or refugees registered on the Home Affairs database;
ii. currently residing within the borders of the Republic of South Africa;
iii. above the age of 18
iv. unemployed;
v. not receiving any form of income;
vi. not receiving any social grant;
vii. not receiving an unemployment insurance benefit and do not qualify to receive such an unemployment insurance benefit;
viii. not receiving a stipend from the National Student Financial Aid Scheme and other financial aid;
ix. not receiving any other government COVID-19 response support; and
x. not a resident in a government funded or subsidized institution.

(dd) In order to access the benefit referred to in subitem (cc), through an application, an applicant must grant consent for SASSA (the South African Social Security Agency] to verify his or her identity, sources of income or social security benefits with:

i. the Department of Home Affairs
ii. the Unemployment Insurance Fund
iii. Banking institutions
iv. NSFAS;
v. SARS; or
vi. any other government deemed necessary by SASSA.

(ee) The benefit provided for in subitem (cc) will be paid to those who qualify for the period from the date of application, but not earlier than May 2020, up to the end of October 2020, provided that the applicant continues to meet the qualifying criteria provided for in subsection (cc).

…

(gg) SASSA must limit disbursement to the budget made available for this benefit.

Government Notice No 853 in Government Gazette No 43588, 6 August 2020

Pp 5 – 6
the substitution in subparagraph 6(l)(viii)(cc) of the following:
(cc) A special COVID-19 Social Relief of Distress of R 350 per month may be provided for the period indicated herein to distressed individuals, hereinafter referred to as ‘applicants’ or ’appicant’, who are:
the addition after subparagraph 6(l)(viii)(gg) of the following:
(hh)
(a) Following the consideration of an application for the benefit provided for in subitem (cc), the Agency must inform the applicant:

i. whether the applicant qualifies for the benefit; or
ii. that the applicant does not qualify for the benefit in terms of these Directions, stating the reasons why the applicant does not qualify and of the applicant’s right to request the Agency [SASSA] to reassess the decision;
iii. that the applicant must, if the applicant so decides, submit an application for reassessment to the Agency electronically, within 15 days from the date of publication of these Directions or in the event that the application is rejected following the publication of these Directions, within 15 days of the date of notification of the rejection of the application;
iv. that for the purposes of an application of reassessment, the application mist only set out the reasons why the applicant disputes the decision of the Agency and that the applicant may not submit any new or additional evidence;
v. that the Agency must reassess its decision taking into consideration the reasons provided for it in the application for reassessment, against the latest available information within a period of 30 days from the date on which the application for reassessment was received by the Agency and inform the applicant of the outcome of the reassessment and provide reasons for such a decision;
vi. that no application for reassessment will be considered by the Agency, if not lodged within the prescribed period of 15 days from the date of publication of these Directions or 15 days from the date of rejection of an application, whichever is applicable;
vii. that the outcome of the reassessment by the Agency will be the final decision of the Agency and no further recourse will be entertained;
viii. that if the applicant is not satisfied with the outcome of the reassessment by the Agency, the applicant may approach a relevant court for judicial review within a period of not more than 180 days of the date of the outcome of the reassessment by the Agency, in terms of section 6(1) read with section 7 of the Promotion of Administrative Justice Act (Act 3 of 2000).

(b) The Agency may review that benefit referred to in subitem (cc) granted to an applicant on a monthly basis and, where there is a change in the circumstances of the applicant, the agency may:

i. discontinue the benefit should the applicant no longer qualify for the benefit; or
ii. implement the benefit, should the applicant qualify for the benefit. Provided that the benefit will only be applied from the month in which the applicant qualified.

Board Notice 131 of 2020, Government Gazette No 43866, 20 November 2020

P4
A special COVID-19 Social Relief of Distress of R 350 per month referred to in paragraph 6(l)(viii)(c)
of the Directions is hereby extended to 31 January 2021 and must continue to be paid until 31 January 2021.

Notice 111 in Government Gazette No 44174, 22 February 2021

P3
A special COVID-19 Social Relief of Distress of R 350 per month referred to in paragraph 6(l)(viii)(c)
of the Directions is hereby extended to 30 April 2021 and must continue to be paid until 30 April 2021.

ANNEXURE 2

1021. Mr H A Shembeni (EFF) to ask the Minister of Social Development:

To date, what (a) total number of persons have benefited from the R350 social relief grant, (b) impact has she found that the specified grant had on the lives of those to whom it was paid and (c) has she found would the social and livelihood implications of stopping the grant be on those who have been recipients of the grant?

REPLY:

(a) To date a total of 9 998 879 applications have been received for the relief grant. The numbers approved per month varied as validation of every application was done monthly. The number approved per month for the duration of this grant is indicated below:

May                4 424 449
June               5 061 088
July                5 570 962
August           5 963 465
September    6 037 809
October         6 135 121
November     6 088 879
December     5 930 154
January         5 934 216
February        5 924 709
March            5 780 422
April               5 917 068

(b) The department has conducted a Rapid Assessment of the Covid-19 R350 grant and has also reviewed other independent studies conducted on relief measures. All studies confirm that the relief measures have made significant impact on the livelihoods of not only those receiving the grant, but also those in a household of a grant recipient. From our rapid assessment study we found that around 88% of recipients of the COVID SRD grant pooled the grant with their other household incomes to take care of the needs of everyone in the household; thereby confirming that the reach of the grant to reduce poverty, thus goes far beyond just the recipient. It is estimated that between the CSG Caregivers allowance and the COVID SRD grant of R350, approximately 36 million individuals benefited from these both directly and indirectly.

Our utilisation surveys also confirms that the grant was mainly used for the purchase of food. This triangulates well with other research indicating that hunger declined during the period May to October 2020 when the relief package was at its maximum level and then increased from November onwards when part of the relief package, and notably the care givers allowance, was withdrawn. It is expected that with the withdrawal of the last portion of the relief package, whilst in 3rd wave of the pandemic, more households and individuals will become vulnerable to hunger.

The research findings by The National Income Dynamics Study - Corona Virus Mobile Survey, 2020 (NIDS CRAM) confirms that the special COVID-19 grant has brought millions of previously unreached individuals into the system, and application for and receipt of the grant has been relatively pro-poor. This is further confirmed by the department’s rapid assessment study:

Over 6 million new applicants accessed this grant, the majority being youth.

Most found the application process relatively easy to navigate.

Of those who received the grant, the majority are in low-income households.

30% of those who were retrenched between February and April report no household-level grant protection at all; and hence the new COVID SRD grant was able to provide them with some form income support.

In terms of poverty and inequality, microsimulation work done by Southern Africa – Towards Inclusive Economic development (SATIED), a collaboration between National Treasury, UNIWIDER, SARS, TIPS and others - found that poverty measured at the Food Poverty line would have increased from 20.6% of the population living below the food poverty line to 32.1% if there were no COVID social relief interventions. However with these interventions, not only were we able to prevent further deepening of food poverty, but also decrease this from 20.6% to 18.8%. Similar results were found at the lower and upper bound poverty lines.

Similarly with inequality, as measured by the Gini coefficient, without the relief measures, inequality would have increased from 0.64 to 0.67, however with the relief measures our Gini coefficient has declined to 0.61.

The policy brief on the distributional impact of COVID-19 and the state emergency packages in South Africa by SATIED provide recommendations that is important to note that comprehensive social security helps protect people from economic shocks by operating as an automatic stabiliser that is built into the tax-benefit system and that there is an urgent need to establish social assistance for poor people of working age, as a permanent rather than temporary feature of the system.

(c) The evidence provided by the various research, and analysis, confirms the assumption that ending relief programmes will reduce household demand as well as increase hunger and social alienation. These factors will add to social and political stress, which in turn will slow down the economic recovery over the coming year or two at least.

ANNEXURE 3 – THE EXTENSION OF THE SOCIAL RELIEF OF DISTRESS GRANT FROM AUGUST 2021 TO MARCH 2022

On 15 September 2021, the National Treasury made a presentation to the National Council of Province’s Appropriations Committee, which contained the following information:

A proposal of an increased budgetary allocation of R 26.7 billion to fund the extension of the SRD grant. R 500 million was for the administration of the grant and the remainder would be paid to beneficiaries.

The number of beneficiaries was expected to average 9 million each month.

By 25 August 2021, 11 237 724 applications had been received. 6 328 376 (56%) of these were returning applications from the earlier phase of the SRD grant and 4 904 348 (44%) were completely new applications. 43% of applications were from men and 57% from women. The gender composition of applications has shifted towards women compared with the earlier phase. 62% of applications were from people between the ages of 18 and 35. 11% of applications were received from people who had up to complete primary education, 39% from people who had completed Grade 10, 42% from people who had completed Grade 12, and 8% had some level of tertiary education.

Take ups are higher than in the earlier phase.

Payments commenced on 25 August 2021.

[1] Engenas Senona, Erin Torkelson and Wanga Semba-Mkabile, Social protection in a time of COVID: lessons for basic income support, Black Sash, July 2021