Before 1994, South Africa possessed, in effect, two, racially-based, welfare systems, in accordance with the idea of separate development. White, Indian and coloured people were entitled to state welfare provisions (Patel, 1991; Pillay, 1995), which had been greatly extended from the 1920s in an attempt to solve the poor white problem. Africans, on the other hand, were largely excluded from the formal social welfare system. Although all Africans were able to apply for the State Maintenance Grant, its administration deliberately excluded African women and children. This meant that relatively few Africans were able to receive the grant.3 The social and natural resources of the homelands (and the reserves before them) were considered the proper source of social welfare for Africans. To all intents and purposes, however, the African household, based on cheap labour, provided the main source of social security for Africans (Wolpe, 1972).
The post-apartheid welfare system consists of a mixture of private or family transfers, contributory insurance schemes and non-contributory social assistance (see Table 1.1). This system is inadequate in many ways. For a start, social insurance plans only benefit those people in permanent employment who can contribute to pension and unemployment schemes. The majority of South Africans are either unemployed or are not permanent employees. The benefits from these schemes are often too low to provide effective protection in any case (Van der Berg and Bredenkamp, 2002). The great majority of poor people have to rely on family support and/or social grants. While most individuals are connected to families, it does not follow that family members are always willing or able to help them. Most people in the country are not themselves eligible for social grants but have to rely on access to other people’s grants. Barchiesi (2000) argues that South Africa’s current welfare regime displays the features of hyper-commodification; it is characterised by a means-tested system, individual contributions rather than policies of redistribution and cross-subsidisation, very high participation of individual customers who want to access basic social services, and a high level of dependence on the labour market for income.
TABLE 1.1 South Africa’s welfare system, 2004
| Scheme | Number of Beneficiaries | |
| Family: private transfers | Unregulated ‘insurance’ | Not captured in statistic |
| Unregulated ‘assistance’ | 2 million mostly poor households receive remittances from other households | |
| Regulated ‘assistance’ | Little data on how many people receive maintenance | |
| Market: contributory schemes – social insurance | Pension or provident funds | Over 1 million pensioners receive an income |
| Unemployment insurance fund | About 700 000 people benefit per year | |
| State: non-contributory, social assistance | Old age-pension receive R 740 a month | Almost 2 million pensioners |
| Child support grant | More than 1.5 million children receive R 170 a month | |
| Disability grant | More than 700 000 beneficiaries receive R 740 a month | |
| Other grants | About 150 000 beneficiaries | |
| Source: Developed from Seekings, (2002:7) | ||
The state old-age pension grant has a long history in South Africa. People of different race groups received pensions of unequal value in the past. Various legislation and amendments since 1994 have made all permanent residents and South African citizens (men over 65 and women over 60) eligible to receive a pension of an equal amount, R740 in 2004. The number of state old-age pension grants increased from 566 202 in 1987 to 2 million in 2003 (Department of Social Development, 2003).
The temporary and permanent disability grant benefits those with permanent physical or mental disabilities, as well as tuberculosis patients who are unable to work and people with AIDS. The monthly payment is R740 per person.
The child support grant was initiated in 1997. Following the recommendations of the Lund Committee (1996), the racially-biased State Maintenance Grant, which had provided R350 a month to support mothers and children under the age of 18 in the absence of a father, was abolished and replaced by a child support grant for children under the age of seven. The mothers or primary caregivers of these children received R100 a month for each child in their care. The grant was subsequently increased to R190 in 2006 and extended to include all children under the age of 14. By 2006, 7,8 million children had been registered for the child support grant (see Table 1.2).
TABLE 1.2 Trends in number of social-grant beneficiaries, 2000-2006
Source: Department of Social Development, SOCPEN dataset (2006)
The Department of Social Development estimates that 36,6 per cent of the poverty gap would be filled if the take-up of child support grants were increased.4 While the department’s records show that take up increased between 2005 and 2006 across the country, these increases were insignificant in poor provinces such as KwaZulu-Natal and Limpopo and hardly affected grants to children below the age of thirteen (see Table 1.3).
TABLE 1.3 Take up of child support grant by age group per province: 2004-2006
Source: Department of Social Development, SOCPEN dataset (2006)
A significant number of vulnerable children qualify for a grant but do not receive one. Even if everyone who was entitled to a grant was to claim it, however, poverty itself would hardly be dented since 60 per cent of the poor, some five million people, are ineligible for a state grant in the first place. The system is also riddled with anomalies and problems. A household that depends solely on a state pension grant, for example, is left destitute when the pensioner passes away. A child who has been receiving a state grant for a number of years receives nothing when he/she reaches the age limit, even though he/she might still be poor and have no other possible source of income. It is often assumed that the children who do not qualify for a grant are supported by their parents or are covered by private maintenance. While it is true that the progressive Maintenance Act No. 99 of 1998 has substantially improved the position of mothers who are dependent on child support from their former partners (Hassim, 2003), unemployment and poverty mean that many men are unable to meet their obligations (Bell, 2004; Mashao, 2004; Mills, 2004; Moyo, 2004; Hassim, 2008). The monetary value of the child support grant doubled between 2007 and 2008, from R100 to R200 a month, but the rising cost of living and the high inflation rate meant that this increase was insignificant.
Both forms of social security in South Africa –