The social security pension, which government plans to introduce for all working South Africans will be mandatory. Last week President Thabo Mbeki said that instead of acceding to requests for the instatement of the basic income grant (BIG), government would introduce a comprehensive social security system.
Speaking to the Mail & Guardian, Social Development Minister Zola Skweyiya, said the cornerstone of the new social security pension plan is that those who are employed save part of their income so that they can be assisted at a later stage.
He said it would be compulsory for every working person to join the scheme. ‘South Africans just don’t save. So we have a lot of persuasion to do. The Minister of Finance, Trevor Manuel, has been preaching this gospel for a long time but it has not been heeded.†Skweyiya said the measure was designed to protect working people and their families from catastrophic reversals of fortune in the event of unemployment, sickness, disability, old age and death.
Manuel is expected to give details of how the scheme will work when he tables his budget speech on Wednesday. Skweyiya denied that the necessary deductions would eat into the already low salaries of the working class.
‘We are not eating from them. We are saving for them. If we don’t do that, they will fall into dependency on government.â€
Asked about able-bodied, unemployed South Africans who were not receiving any grants and who would still be left out of the new scheme, Skweyiya said they would be catered for through short-term expanded public works projects.
Skweyiya is known to personally favour the BIG — an idea that would provide unemployed people with a monthly grant of R100 from the state — but which has been overruled by the president.
Skweyiya’s department currently provides grants to 11-million indigent South Africans. These include child support grants, disability grants, old-age pensions and foster care grants.
He told the M&G that research conducted by his department and the University of Stellenbosch had disproved perceptions that the grants were providing a ‘perverse incentive†for teenagers to have children to access the grant. Other concerns raised included that a culture of economic dependence was being created, where some people were no longer interested in looking for work because they relied on grants.
‘Our analysis has revealed that there has been a huge growth in the number of child support grants beneficiaries in recent years, however, if a comparison is made between the numbers of teenagers receiving the grant and the incidence of teenage birth in the national population, the analysis suggests that the take-up rate of the child support grant by teenage mothers remains very low.â€
He said the department commissioned the investigation after the rapid increase in the growth of social grant take-ups in the past few years created concern about the long-term sustainability of social grants and their potential for perverse incentive.