Are social grant numbers increasing (and is that a bad thing)?

Daily Maverick

a day ago

Spending on social grants is a powerful way to support economic growth, because almost 100% of every rand spent flows back into local economies in the form of consumer spending, promoting economic activity and livelihoods.
Following the release of the 2024 General Household Survey (GHS), we have seen many headlines pointing to an increase in the number of social grant recipients compared with 2019. These claims need to be interrogated and nuanced.
It is not necessarily the case that the overall proportion of monthly social grant recipients continues to increase. At the same time, in South Africa's macroeconomic and historical context, it would not be such a bad thing if it did.
The number of social grant recipients is often taken as a sort of proxy indicator for the health of the economy — the implication is that social grant numbers going up is bad, because they track the extent of poverty and unemployment in the country.
This is often wrapped up with ideas about 'dependency' on social grants, which frame grant recipients as an unproductive drain on taxpayers, and sometimes directly counterpose the number of social grant recipients to the number of income tax payers.
But the quantum of social grants is not only an indicator of the extent of poverty and unemployment. It can also be taken as a measure of growth-enhancing public investment, as well as the progressive realisation of constitutional rights.
In this article, I unpack the social security findings in the GHS, and what they do and don't tell us about the state of our social safety net and our economy.
Have social grant numbers increased, and relative to what?
The GHS shows an increase in the proportion of individuals receiving social grants between 2019 and 2024 of 5.2 percentage points, from 34.9% to 40.1%. Much of this increase is attributed to the introduction of the Covid-19 Social Relief of Distress (SRD) grant during the 2020 lockdowns.
It is of course true that there are more social grant recipients today than there were in 2019, as the social protection system has been extended to include working-age adults in extreme poverty who previously had no access to social assistance. But since 2021, access to the SRD grant has decreased, as has access to the Child Support Grant (CSG).
It is easy to be misled by how the SRD recipient data is measured and presented in the GHS. For the longer-standing social grants, including the CSG and Old Age Pension (OAP), eligibility is assessed on application, and, once verified, a beneficiary receives the grant on a continuous monthly basis, unless the government becomes aware of a change in their circumstances.
For the SRD grant, people's eligibility is reassessed on a month-to-month basis (a highly problematic methodology), and the grant is paid only in the months they are deemed eligible.
The GHS questionnaire does not take into account these differences, but simply asks whether respondents receive each grant. This means that people who have received the SRD grant irregularly or only once or twice in the past year may not know how to respond.
This could potentially explain what appears to be large discrepancies between the GHS and other sources with respect to SRD grant numbers. The GHS finds that the proportion of individuals aged from 18 to 59 who 'receive' the SRD grant increased year-on-year, from 5.3% in 2020, to 13.9% in 2024.
This is difficult to square with official figures from the South African Social Security Agency (Sassa), which show that in March 2022, 10.9 million people received the SRD grant, while in September 2024, recipient numbers stood at 8.3 million — a marked decline. This decline has been driven by decreasing budget allocations to the SRD grant from the National Treasury.
We do not know why the GHS data shows an annual increase in the proportion of people receiving the SRD grant since 2020, but we suspect that it does not reflect the true number receiving it on a regular basis. We note that self-reporting is generally less reliable than administrative data. If you look at monthly SRD grant recipient numbers as shown in the graph below, based on data obtained from Sassa, the picture is very different.
But the SRD grant is only one component of the social protection system. It's conceivable that an aggregate increase in social grant coverage could have been driven by significant increases in the proportion of children receiving the CSG, or seniors receiving the OAP.
However, this is not the case. The proportion of the eligible population (people aged 60+) receiving the OAP has remained relatively stable over the period in question, ranging from 71% to 73%.
The proportion of all children covered by the CSG has fallen from a peak of 69.1% in 2021 to 65.5% today — a significant drop. This does not reflect a reduction in the child poverty headcount. Analysis from the Children's Institute at UCT suggests that the proportion of children in poverty (measured at the Upper Bound Poverty Line) has increased since 2019, reaching 70% in 2022.
The declining proportion of children receiving the CSG instead reflects the fact that the government has made it harder to access the CSG in recent years. Newborn babies and their caregivers (who make up the bulk of new CSG applicants) were less likely to access the CSG in 2024 than in 2021.
This worrying trend dovetails with the introduction of procedural hurdles in the grant system, like onerous requirements for identity verification and additional documentation.
Has dependence on social grants increased?
So, contrary to headline findings from the GHS, the proportion of people receiving a social grant in South Africa each month has not necessarily increased in the past few years, despite the ongoing extension of the SRD grant.
But another focus of reporting on the GHS is the degree of 'reliance' or 'dependence' on social grants as a primary source of income for households.
The GHS tracks the main sources of income for households, and in 2024, found salaries to be the main source of income for 54.5% of households (a slight decrease from 54.8% in 2019), while grants were the main source of income for 23.8% (compared with 20.4% in 2019).
This does not suggest an out-of-control welfare state. It reflects a dire crisis of structural unemployment, whereby a massive proportion of households do not have access to income derived from work.
In approaching this, it is important to bear in mind that social grants are intended to be the primary source of income for their recipients, by virtue of the design of the social grant system. They are explicitly targeted at persons who are unable to access other forms of income (particularly salaries or wages), either because of their life stage (ie childhood, old age), sickness or disability, poverty or unemployment.
Moreover, social grants are means-tested, meaning that individuals are ineligible to receive them if they have a meaningful alternative source of income.
My organisation, the Institute for Economic Justice, has been a vocal proponent of moving away from means-testing benefits, precisely because it is a practice that can trap people in poverty as it penalises attempts to generate income and build sustainable livelihoods.
Some groups, like persons with disabilities or those with full-time caregiving responsibilities, face specific challenges in generating income from employment, and need to rely fully (and appropriately) on social protection to meet their needs.
This has a gendered dimension, as households headed by women (disproportionately likely to be caregivers) are much more likely to list grants as their primary source of income. (Far from languishing on benefits, CSG caregivers are doing the critical work of perpetuating the nation).
For others, social grants can provide a minimum income floor to cushion against precarity and shocks. Over 80% of unemployed people have been unemployed long-term. The majority of working-age beneficiaries have little hope of securing work in the short term.
But where they have the ability to do so, households receiving social grants should be able to access other income streams as well.
South Africa's social safety net is full of holes
But to address the question of whether social grant recipient numbers are trending too high (which is the subtext of much reporting on the GHS), we need to put them in broader perspective — of poverty and unemployment in South Africa, as well as of international standards for social protection.
Even if we accept that the proportion of individuals regularly receiving social grants has increased in the last few years (which as discussed above is likely not the case), the South African social safety net remains woefully inadequate. Aside from the SRD grant, which provides a meagre R370 per month, able-bodied working-age adults have no access to non-contributory social assistance.
The proportion of the working-age population that was unemployed (including discouraged work seekers) reached over 43% in the first quarter of 2025.
At least 16 million working-age adults are estimated to be in food poverty. Only half of that number receives the SRD grant each month. The percentage of persons who experienced hunger increased from 11.1% in 2019 to 14.3% in 2024.
As mentioned above, vulnerable children are also falling through the cracks, as approximately 4.5% of children in poverty are not receiving the CSG.
It is often claimed that South Africa spends a high proportion of its GDP on social grants compared with peer countries, usually by those who would seek to limit this area of spending.
Yet, according to the International Labour Organization's (ILO) World Social Protection Report 2024-26, South Africa's social protection coverage — at 63.4% of the population — is below average for upper-middle income countries (UMICs), which have an average coverage of 71.2%.
Our coverage of non-contributory benefits (ie excluding UIF) is 44%, compared with an average of 51% among UMICs. The ILO, alongside many local and international experts, recommends that countries move towards universal social protection coverage — that is 100% of the population. Many high-income countries are already there.
As to the claim that South Africa's social protection expenditure is higher than peers, this is also untrue. As a proportion of GDP, our spending on social protection excluding health is much lower than the UMIC average (5.4%, compared with an average of 8.5%).
At the same time, we have much higher levels of income poverty and inequality compared to other UMICs. South Africa is the most unequal country in the world based on the World Bank's Gini Index. Among UMICs, we have by far the highest proportion of people below the international extreme poverty line — at 20.1% (aside from Turkmenistan, which at 43% is an extreme outlier and relies on very old data).
Compared with emerging economies, South Africa's wealth distribution is skewed significantly towards the richest 20% — the top 20% owns 68% of the country's wealth, compared with an emerging economy average of 47%.
Viewed in light of this shameful status, we should not be using peer countries as a yardstick to test whether South Africa's social protection spending is too high. Instead, we should be asking why we don't redistribute a greater proportion of our wealth through social protection programmes.
The relationship between social grants, unemployment and economic growth
If poverty is a cliff, we can either view social grants as the fence at the top or the ambulance at the bottom. Having a comprehensive social protection system is not an indication of the failure of growth and employment creation. It is a critical tool in the policy toolbox for fighting economic exclusion and unemployment.
Spending on social grants is a powerful way to support economic growth, because almost 100% of every rand spent flows back into local economies in the form of consumer spending, promoting economic activity and livelihoods.
In turn, this boosts government revenue as higher spending equals a higher VAT take, creating a virtuous macroeconomic cycle.
Social grants also (if designed well) give people a foundation to escape the poverty trap, generating employment and building sustainable livelihoods over time.
Receiving the SRD grant has been shown to increase the likelihood of entering into employment by six percentage points in the first year — an astounding finding given the grant's low value. This is because people use their grants to cover the costs of job seeking and accessing work (like data and transport). The SRD grant is also used to start or expand small businesses.
However, the positive economic impacts of social grants are undermined by excessively low values, and restrictive means-testing systems which pull the safety net out from under beneficiaries as soon as their income increases slightly above a minimal threshold (in the case of the SRD grant, this threshold is set below the food poverty line).
It may seem counterintuitive, but the truth is that if the proportion of households that are covered by adequate social protection does increase — and gaps in the social protection system are plugged — we will see a reduction in the proportion of households reporting social grants as their primary source of income.
To achieve this, it is critical that we move away from a punitive approach that treats beneficiaries with suspicion and requires them to jump through administrative hoops and demonstrate utter desperation to access entitlements.
Far from creating dependency, adequate, comprehensive and accessible social protection provides a springboard for economic inclusion and growth.
To address the crisis of structural unemployment, food insecurity and poverty highlighted by the General Household Survey, South Africa should fill the gaps in the social safety net and expand social protection coverage to 100% of the population. DM
Dr Kelle Howson is a senior researcher in labour and social security at the Institute for Economic Justice, in the workers' rights and social security programme. She is also a postdoctoral researcher with the Fairwork project at the Oxford Internet Institute.