/ 1 February 2024

Why a basic income grant would benefit everyone

South Africans Waiting To Vote
Bottom line: Introducing a basic income grant for everyone aged 18 to 59 would help older people too. Photo: Peter Turnley/Getty Images

Nosisi Mayamo’s voice wavered as she told me that, halfway through the month, she had run out of money for electricity. She had also run out of food. 

Mayamo, 64, lives with her 16 grandchildren in a damp, two-bedroom house in Dimbaza, Eastern Cape. Three of her eight children have died and the remaining five have moved to Cape Town to look for work. Only one has found a job. 

Mayamo spent half her life living under apartheid, which denied her a good education, decent work and the ability to save for older age. 

Her household’s only financial support comes from government social grants — the older persons grant for herself and child support grants for her grandchildren.

“It’s a very tough situation,” she said. “A lot of people think because of the grants, I should be able to afford things, but we have so much we need to do with that money. 

“The children are always running out of school shoes.” 

The older persons grant makes up a sizeable proportion of the government’s budget for social grants and goes to about four million people aged 60 and older. The government describes it as “a grant to see you through your old age”.

It is not designed to support whole families, yet many older people, such as Mayamo, use it to support their unemployed adult children or supplement the meagre child support grant, a mere R510 a month, for their grandchildren. A new basic income grant for everyone aged 18 to 59 would relieve pressure on such households’ limited resources. 

Even setting aside familial expenses, the older persons grant is not enough to support a decent standard of living for the single person it is intended for. 

At R2 090 a month for those aged 60 to 74 and R2 110 for those 75 and older, it is one of the highest social grants available in the country. 

But it is still less than half the R4 474 they would earn each month working 40 hours a week at the national minimum wage and the Global Living Wage Coalition’s assessment of a living wage in rural South Africa of R4 876

Meanwhile, the Decent Standard of Living project has calculated a single person needs nearly three times as much — R6 034 a month — to have a decent standard of living. 

Rising costs have hit older people’s pockets hard, just as they have everyone else’s. Annual inflation averaged 6% last year but prices soared for some items, with potatoes 52% and eggs 38% more expensive by the end of the year. 

Any annual increase in the older persons grant in the upcoming national budget that fails to reflect these rises would in effect be a cut, meaning Mayamo could afford even less.

“The only option I have is to borrow money from loan sharks but that leaves me with a whole lot of debt because the interest is very high at 40%,” she told me.

People aged 18 to 59 require greater financial support too, given the high unemployment rates. The retention in this year’s national budget of the social relief of distress grant, introduced during the Covid-19 pandemic, would continue supporting some people in that age group.

The potential successor to the social relief of distress grantt, a basic income grant for everyone 18 to 59, would relieve some of the pressure on older people to use their older persons grant to support family members. 

Such a basic income grant has broad support from civil society, trade unions and, this election year, from diverse political parties, including ActionSA, the ANC, the Democratic Alliance, Economic Freedom Fighters and Good.

But South Africa should not pay for a basic income grant by reducing spending on existing social grants, which are already too low for an adequate standard of living. Instead, it should explore options such as additional progressive taxation and other non-regressive funding measures to raise the extra revenue. 

Everyone has the right to an adequate standard of living. Unless the government increases the older persons grant and the child support grant in the budget to reflect rising prices, and soon introduces an adequate basic income grant, it will be a long time before Mayamo and her grandchildren will enjoy that right — or can afford a whole month of electricity and food.

Bridget Sleap is the senior researcher on the rights of older people at the Human Rights Watch.