It costs between R16,73 and R31,50 to administer each social grant, whether it is a R700 monthly pension or a R160 child support grant, says the Intergovernmental Fiscal Review.
The Eastern Cape spends the most, at R31,50, and the Western Cape the least, at R16,73, on each grant paid out by third-party private contractors. Administration costs in some other provinces are R30,14 in KwaZulu-Natal, R23,22 in Mpumalanga and R17,52 in Limpopo.
Costs drop if grants are paid through the Post Office, to R9 in the Western Cape, R14,27 in the Eastern Cape and about R12 in other provinces. Only in KwaZulu-Natal do costs remain the same. Post Office payments are not available in the Northern Cape.
Of the 4,8-million grant payments made in December, 74% were made through private contractors, 7,3% though the Post Office and 11,5% through banks, the review says.
Among initiatives to reduce the cost of grant administration are discussions with banks about their taking on a larger proportion of grant payments.
Meanwhile, the number of grant recipients has increased to 5,6-million in March from 2,5-million in April 1997. The number of recipients is expected to increase further with the staggered extension of the child support grant to children under 14 by 2006.
Provinces are responsible for administering the social grants, although the money is transferred into the provincial fiscus from the national government.
Social grants account for more than 87% of the total social development budget of R32,1-billion for all nine provinces in 2002/3.
In poorer provinces social grants take up more: 90,8% in the Eastern Cape, 91,8% in Limpopo and 88,4% in KwaZulu-Natal.
The fiscal review identifies the delivery of social grants as a key area of improvement.
”Administrative and information systems must be strengthened,” it says, adding that current practices must be improved in the medium term. The establishment of a single national entity to administer grants was approved in principle by the Cabinet last year.