South Africa’s Department of Social Development (DSD) is working to finalise the policy framework for the new Basic Income Support (BIS) grant by March 2027, paving the way for it to replace the COVID-19 Social Relief of Distress (SRD) grant, a measure originally meant to be temporary but extended well beyond its intended lifespan, with the legislative process to follow in the 2027/28 financial year.
Key Takeaways
- New grant on the way: The DSD is aiming to finalise the Basic Income Support policy by March 2027, after which the legislative process to bring it into law would begin in the 2027/28 financial year.
- SRD grant being phased out: The R370 per month SRD grant, originally meant to last six months but extended for years at a cost of R35 billion to R40 billion annually, has funding tapering off sharply after March 2027 as it gets replaced by the BIS.
- Grant tied to employment: Unlike the SRD grant, the new BIS policy links support to employment-seeking activities and sustainable livelihood opportunities, so beneficiaries are eventually graduated towards other economic opportunities rather than remaining solely reliant on the grant.
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From the SRD Grant to Basic Income Support
The SRD grant began life as a R350 per month support payment, an amount that was later increased to R370, and it was first launched back in 2020 during the COVID-19 pandemic with the specific aim of helping qualifying South Africans cope with the severe economic uncertainty of that period.
According to the department, the grant was originally only ever expected to remain in place for around six months, yet more than 8 million recipients ultimately came to depend on this financial support for far longer than that.
The idea of a basic income grant in South Africa is not new. It can be traced back to 2002, when the Taylor Committee of Inquiry into a Comprehensive Social Security System first recommended a universal income grant as a way of tackling deep structural poverty, more than two decades before the current BIS policy process began.
The Rising Cost of Extending the Grant
As a direct result of this ongoing dependence, the grant ended up being extended on an annual basis, a process that has cost the state an additional R35 billion to R40 billion every single year in order to keep financing it.
In the most recent 2026 budget, the SRD grant was allocated a further R36.4 billion specifically to extend the payments through to 31 March 2027, with beneficiaries continuing to receive the current rate of R370 per person per month.
It is also worth noting that the budgeted provision for the SRD grant tapers off sharply over the medium term, dropping all the way down to the 2028/29 financial year, where only R1.7 billion and R1.2 billion respectively have been pencilled in for the outer years.
Why the Department Considers the SRD Grant a Success
The DSD has described the billions of rand spent on the SRD grant as a success story overall, arguing that it directly addressed poverty in a meaningful way, and pointing out that recipients mainly used the funds to purchase essentials such as food, electricity, and clothing.
The department further explained that this pattern of spending then had the knock-on effect of supporting local economies more broadly.
The department also highlighted that research carried out by a number of independent researchers had found that the SRD grant was well targeted and had been successful in reducing hunger, poverty, and inequality, while at the same time allowing beneficiaries to remain engaged in job searching and other forms of economic activity.
Moving Towards a Permanent Basic Income Support Policy
Because of these perceived successes, the national government, with the backing of the presidency, is now in the process of working to transform the temporary SRD grant into a fully fledged and permanent Basic Income Support policy, a process that is currently underway.
President Cyril Ramaphosa has long been a supporter of introducing this new grant, and in his 2026 State of the Nation Address he gave an undertaking that the reworking of the grant into its new permanent form would take place within that year.
It is also worth noting that the Basic Income Support grant has, for the most part, completely taken over the conversation around a basic income grant in South Africa more generally, a topic that had previously become an increasingly contentious one, particularly when it came to questions of cost and how such a grant would be funded.
The New Grant Policy Is Still Being Drafted
The DSD has confirmed that the policy underpinning the new grant is still in the drafting stage, with ongoing consultations and input from a range of different stakeholders helping to shape it into something that will actually be workable in practice.
A draft version of the BIS policy was first brought before the cabinet back in November 2024, although it was subsequently sent back to the department with instructions to strengthen certain key provisions before it could proceed any further.
This included provisions relating to linking the grant to employment-seeking activities undertaken by beneficiaries, as well as a requirement to update the overall costing of the policy.
Linking the Grant to Employment and Sustainable Livelihoods
During 2025, the department moved to link the grant more closely with employment and sustainable livelihood opportunities, with the policy specifically targeting the economically active portion of the population.
The intention behind this, according to the department, is to ensure that the working-age population being targeted for income support does not end up relying on the grant alone as its only source of income.
The department went on to indicate that appropriate measures would be put in place to ensure that beneficiaries are able to be gradually moved on, or “graduated”, towards other, more sustainable economic opportunities over time.
The department has also confirmed that further research and additional work commissioned over the course of the past year was completed in February 2026, with the overall policy subsequently updated to take this new information into account.
This updated version of the policy now also includes the institutional design needed to support the employment linkage strategy described above.
The DSD, working alongside the presidency, presented this updated policy to the National Treasury in March, and this was followed by a series of workshops held with other relevant government departments during May.
With these additional rounds of input now incorporated, the department has indicated that the revised draft policy will be presented to the National Treasury again within the next few weeks.
Next Steps for the New Social Grant
From this point onwards, the DSD has set out a fairly detailed roadmap of next steps required to bring the new social grant into effect, although it is worth noting that the formal legislative process itself is only expected to begin in 2027.
| Timeframe | Planned action |
|---|---|
| June to July 2026 | Finalise engagements with the National Treasury |
| July 2026 | Update the draft policy and submit an impact assessment for consideration by the presidency |
| August 2026 | Submit the draft policy to cabinet and request approval to gazette it for public comment |
| September 2026 to February 2027 | Update the draft policy further based on new inputs received |
| March 2027 | Submit the finalised policy to cabinet for final approval |
The department has stated that, provided the policy successfully makes its way through all of the required government processes, it will then go on to draft the relevant amendments to the Social Assistance Act that are needed to give effect to its implementation.
The legislative process itself is expected to get underway during the 2027/2028 financial year, which the department itself has acknowledged represents a relatively tight deadline given everything that still needs to happen beforehand.
Conclusion
South Africa’s Basic Income Support grant represents a significant shift from emergency pandemic relief towards a more permanent, structured form of income support, one that the government hopes will continue addressing poverty and hunger while also actively helping beneficiaries move towards sustainable employment rather than long-term dependence on state assistance. With the policy still working its way through consultations, costing reviews, and government approval processes, and the legislative process only set to begin in 2027/28, South Africans relying on the current SRD grant will need to watch this space closely over the coming months to understand exactly how and when the transition to the new grant will affect them.
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