Major Policy Shifts Under Consideration for the SRD Grant

Significant policy changes are being explored for South Africa’s Social Relief of Distress (SRD) grant, with the National Treasury actively assessing proposals that could fundamentally alter how the support is provided.

Key Takeaways

• Linking Grants to Work Carries Significant Risk: Tying SRD grant access to employment and skills programmes could exclude many beneficiaries in a labour market that lacks sufficient job opportunities and capacity.
• SRD Grant Remains a Critical Lifeline: With around eight million recipients, the R370 monthly grant continues to provide essential income support for households with little to no alternative sources of income.
• Long-Term Uncertainty Persists Beyond 2027: Although funding is secured until March 2027, the absence of a clear post-2027 plan leaves beneficiaries exposed to potential policy shifts and funding constraints.

Proposed Reforms Raise Concerns Amid High Unemployment and Uncertain Grant Future

Among the ideas on the table is a plan to link grant access to participation in employment pathways and skills development programmes aimed at working-age adults.

While these proposals are presented as a way to encourage longer-term economic participation, several stakeholders have cautioned that such reforms may have unintended and potentially damaging consequences. This concern is particularly pronounced given South Africa’s persistently high unemployment rate and the limited availability of formal job opportunities across the country.

The SRD grant, which currently provides R370 per month to each beneficiary, has become a critical source of income for approximately eight million people. For many recipients, this modest amount represents their only consistent financial support and plays a vital role in helping them meet basic day-to-day needs.

Although the National Treasury has confirmed that funding for the SRD grant is secured until March 2027, uncertainty remains about its future beyond that date. There has been no firm commitment regarding whether the grant will be extended, restructured, or replaced once the current funding window expires.

Concerns Over Linking Support to Work and Skills Programmes

During a recent discussion on 702, an independent social grant activist highlighted growing unease about the direction being considered for the SRD grant after 2027. The concerns stem from earlier indications by the Finance Minister that government departments are exploring ways to connect income support for working-age adults to skills training initiatives and employment-related programmes.

While the stated objective of this approach is to improve long-term economic outcomes and reduce dependency on social assistance, critics argue that the practical realities on the ground have not been adequately considered. There is particular anxiety about how inclusive such programmes would be and whether they could realistically accommodate the millions of people currently relying on the grant.

One of the major issues raised relates to age-based eligibility. Government employment and skills initiatives often focus primarily on younger individuals, typically those between the ages of 18 and 35. This raises serious questions about what would happen to beneficiaries older than 35, who may find themselves excluded from these programmes altogether.

If access to the SRD grant were to depend on participation in initiatives that many people cannot qualify for or physically access, a large number of recipients could be left without any form of income. This risk is especially concerning in a context where job opportunities are scarce and competition for skills programmes is intense.

There is also concern that removing or restricting access to the SRD grant under such conditions would undermine its purpose as a safety net. With unemployment remaining exceptionally high, critics argue that withdrawing this support would strip millions of people of a crucial lifeline at a time when alternatives are limited or non-existent.

Long-Term Funding Challenges and Alternative Proposals

Securing a sustainable long-term funding model for the SRD grant remains a complex challenge for the state. For the 2025/26 financial year, Treasury has allocated R35.2 billion to fund the programme, prompting questions about whether this level of expenditure can be maintained over time.

Despite these concerns, some argue that the government has additional fiscal tools at its disposal. It has been suggested that greater revenue could be generated through more progressive taxation, particularly by increasing the tax burden on wealthier individuals.

Beyond its direct impact on beneficiaries, the SRD grant is also seen as playing an important role in the broader economy. By providing recipients with spending power, the grant supports demand at local retailers, particularly those selling basic food items and everyday necessities.

When beneficiaries spend their grant money, it circulates within local economies, helping small businesses remain viable. Removing this income stream could therefore have knock-on effects that extend beyond individual households and negatively affect economic activity at community level.

Rising Costs and the Basic Income Grant Debate

The limited value of the R370 monthly payment has become an increasingly pressing issue, especially as food prices continue to rise. Each month, beneficiaries are able to purchase fewer goods with the same amount, as inflation steadily erodes their buying power.

This situation has intensified calls to transform the SRD grant into a more comprehensive basic income grant. Proponents argue that a higher, guaranteed income would allow recipients to meet their most fundamental needs more reliably, including access to sufficient food throughout the month.

A basic income grant is viewed by supporters as a way to provide dignity and stability to millions of people who currently live on the edge of survival. They contend that ensuring access to basic necessities should be a priority, particularly in an economy that has struggled to generate enough jobs.

Jobs, Reform and Scepticism About Employment Absorption

In response to arguments that government efforts should focus primarily on economic reform and job creation rather than expanding social assistance, critics have expressed deep scepticism. They point to the fact that unemployment has continued to worsen over many years, despite repeated policy commitments to job creation.

There is a widespread belief that the economy will not be able to absorb everyone into formal employment in the foreseeable future. As a result, relying solely on job creation as a solution is seen as unrealistic by many observers.

Civil society organisations have echoed these concerns, warning that introducing job-seeking or skills-based conditions for the SRD grant could exclude large numbers of people and push them further into poverty. They argue that any changes must prioritise inclusion and recognise the structural limitations of the labour market.

Treasury has acknowledged these warnings and indicated that any future policy adjustments would aim to avoid exclusion. However, significant uncertainty remains about how this would be achieved in practice.

Conclusion

The proposals under consideration for the future of the SRD grant highlight the difficult balance government faces between promoting long-term economic participation and protecting vulnerable households from deeper hardship. While linking social support to employment and skills development may appear beneficial in principle, the realities of South Africa’s labour market raise serious concerns about exclusion and unintended consequences. With millions of people relying on the grant as a primary source of income and no clear commitment beyond 2027, any reforms will require careful design, adequate capacity, and a clear focus on inclusion to ensure that essential social protection is not weakened in an economy still marked by high unemployment and limited opportunities.