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South Africa

Universal income grant to be introduced to South Africa, report

South Africa will be introducing the new universal income grant; this universal basic income grant will be offered to all the South African unemployed individuals.  This was confirmed by the Minister of Social Development, Lindiwe Zulu on Monday. Following a parliamentary briefing a week ago, the Department of Social Development indicated a high demand for the basic income support will go beyond six months.

The universal basic income grant will be paid after the R350 Covid-19 Social Relief of Distress (SRD) grant. The minister did not indicate how the grant will be funded or the size of it.

Social Development is currently working on a policy proposal on the feasibility of income support to South Africans aged between 18 and 59 without any income.

The Social Development said: “This is a result of the introduction of the Special Covid-19 SRD grant that has revived the discussion of the feasibility of a Basic Income Grant (BIG) as was recommended by the Taylor Report in 2002,”

Bloomberg has seen a document in which ANC proposes a R500 monthly grand to anyone over the age of 18 and less than 60 years and will cost South Africa R197.8 billion a year.  It was always indicated that up to 60% of the fund will be recouped by levying extra taxes on those with jobs.

According to Reuters, The South African government was planning to spend about R309.5 billion on social security payments for the year 2020 before the COVID-19 pandemic.

Reuters also added that the universal grant will target 33 million people aged between 18 and 59. The poverty line on South Africa according to Statistics South Africa is around R1, 270.00, making a roughly annual cost of R42 billion(calculated by Reuters found).

The director of the South African-based Studies in Poverty and Inequality Institute and a Minimum Wage Commissioner, Isobel Frye, said this matter has been discussed for the last 10 months by the government but the treasury had been reluctant to fund it.

Frye also indicated that “It was unexpected but incredibly welcome. It suggests there’s been a lot of reflection about the inadequacy of the R350 rand Covid-19 grant.”

Zulu is expected to fully explain how this is going to work.

Sources: BusinessTech, Reuiters

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