South Africa to Implement Emergency Cash Transfer for the Unemployed
On April 21, President Ramaphosa announced a 500 Billion Rand relief package in response to the COVID-19 pandemic. The package includes top-ups for existing cash transfer recipients and the introduction of an emergency ‘corona virus grant’. The emergency grant will be given to unemployed individuals who are not eligible for the contributory Unemployment Insurance Fund and informal workers who are unable to work during the lockdown.
The announcement of the relief package follows the submission of an open letter to President Ramaphosa by a group of 75 economists and academics calling for the adoption of a Universal Basic Income (UBI). South Africa already has an impressive system of cash transfers in place and therefore has the infrastructure required in order to get people cash. Over 30 per cent of the population and approximately 44 per cent of households receive a government-funded cash transfer each month. Despite the impressive reach of South Africa’s social grant system, it has historically excluded working-age adults.
The government’s inclusion of working-age adults in the emergency corona virus grant is a landmark step in the history of South Africa’s social assistance system. Under the emergency grant, working-age unemployed adults will receive R350 a month for six months beginning in May. Recipients of the existing Child Support Grant, South Africa’s most widely received grant, will receive an extra R300 in May, and an extra R500 from June until October – more than double the existing grant (R440 as of April 2020).
The inclusion of working-age adults has come after several failed attempts to extend the country’s social grant system to working-age adults over the last two decades. The first was a proposal for a Basic Income Grant made by a government-appointed social protection committee in the early 2000s. The second was the push for a Job Seekers’ Grant by the governing African National Congress in 2012, which would have provided cash transfers to the working-age population in order to help people look for work. This too made little headway and the proposal was eventually scrapped.
The adoption of the corona virus grant may help set the stage for the future adoption of UBI. Despite previous failed attempts to extend the cash transfer system to working-age adults, Basic Income – and different variations of it – has not been completely removed from South Africa’s policy debates. The COVID-19 pandemic has magnified the holes in the country’s existing cash transfer system and may make it impossible to go back to the way things were, even if the emergency grant has only been promised for six months.