South Africa world's biggest welfare state

Social expenditure in SA will top R89bn this year making it the world’s largest welfare state, economists say.

A R55bn property scheme to build accommodation for the Soccer World Cup appears to have turned bad and could force many leading property developers into liquidation.

Johannesburg – Social grant expenditure is estimated at R89bn in the current fiscal year, a figure large enough to prompt some commenators to call South Africa the “biggest welfare state” in the world.

The 2010/11 allowance for social grants represents a 12% increase year-on-year.

State pension, disability allowances, child support, foster care, care dependency, war veterans and grant-in-aid number the available grants in the country.

The state pension, which is available to South Africans over 60 years old, increased 7% year-on-year to R1080/month.

The same amount is paid in a monthly disability grant.

It is available to adult female South Africans below the age of 59 years and to males below the age of 62 years.

Applicants for these grants have to provide a medical certificate and not be maintained at a state institution.

The child support grant, worth R250 per month, increased just 4% over the past year.

Interestingly, Pravin Gordhan, finance minister, decided in last week’s national budget to extend this grant to include 18 year olds whereas children only up to 15 years were included previously.

The additional cost to the state of this extension is R12.2bn.

In order to qualify for this grant, the applicant and the child must be South African residents.

Applicants cannot apply for grants for more than six non-biological children.

Children cared for by state insitutions do not qualify for grants.
The foster care grant, allows foster parents R710/month – a 4% increase on 2009/2010 levels.

Additional grants include the War Veterans Grant, which is aimed at disabled South Africans over the age of 60 who have fought in the Second World War or the Korean War.

This grant has a monthly value of R1100, a 7% increase on last year.
The care dependency grant is for parents who care for children, who have a confirmed permanent and severe disability.

The grant is worth R1080/month, up 6% from last year.

Finally, the grant in aid is for older citizens who need full-time attendance by another party due to mental or physical disability.

This grant is worth R250/month, up 4% from last year.

A Treasury representaive said that the grant increases come into effect on March 1st.

Grants applicants can qualify for more than one grant at a time.

Sapa, a news agency, cited economist Mike Schüssler as being critical of the grant system.

“Look at South Africa’s dependency ratio – it’s three people to one taxpayer and it’s unsustainable,” Schussler reportedly said.

Andile Sokomani from the Insitute of Security Studies said that the extent of state support is unlikely to discourage low-income earners from being self-reliant.

“That danger is not real at this point in time,” said Sokomani, who is a senior researcher in corruption and governance at the Sub-Saharan non-profit organisation.

“Nearly half of the South African population is living on under $1/day but only half of those people are receiving monetary support from the government.”

Sokomani estimated that around 12 to 13 million South Africans are now relying on social grants.

He added that the government is attempting to approach social welfare from a sustainable perspective, opting to build skills and protect basic health, as opposed to merely resorting to hand-outs.

“The expanded public works programme, which tried to still people, is evidence of this,” said Sokomani.

Source: www.news24.com, 20100222

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