. Finance Minister Enoch Godongwana. Picture: Armand Hough / Independent Newspapers
Cape Town - The National Treasury has proposed extending the R350 social relief of distress (SRD) grant until March 2026, funded by a VAT increase, as part of ongoing efforts to combat poverty and unemployment.
If the National Treasury could have its way, the R350 SRD should be extended at a cost of R35.2 billion.
The department’s proposal emerged from the documents of the 2025 budget, which was postponed to March 12 after parties in the Government of National Unity (GNU) could not reach consensus on proposals made by the National Treasury.
The plan to extend the grant comes at a time when the social security policy reform, together with the funding, has yet to be finalised.
The SRD grant was initially introduced for six months to support the unemployed during the Covid-19 pandemic in 2020. It has been extended several times and was only increased in this year’s budget by R20.
In its 2025 budget documents, the National Treasury said funding for the social relief of distress grant will be extended for another year in 2025/26 while the government continues to explore sustainable interventions to address poverty and unemployment.
“The Covid-19 social relief of distress grant will be extended by another year until 31 March 2026. An amount of R35.2 billion is allocated to extend the payment at the current R370 per month per beneficiary, including administration costs,” reads the document.
However, the department said the government operated several employment and active labour market programmes to create work, support the temporarily unemployed, and promote entrepreneurship.
“As announced in the 2024 MTBPS, the social security and employment support programmes are being reviewed. This work, which has proceeded more slowly than anticipated, will continue during 2025/26.”
According to the National Treasury’s budget document, the funding for the extension of the SRD grant will come from the proposed VAT increase aimed to enable additional funding in several key areas.
“It also covers the costs of the Covid-19 social relief of distress grant and accommodates the higher-than-expected public service wage increase,” reads the document.
The proposed extension of the SRD grant comes as there has been a push, in the period leading to the postponed budget day, for the government to provide relief for the unemployed through the SRD grant.
Some have argued that the grant was inadequate to feed South Africans of working age and that the implementation of a Basic Income Grant should be a priority.
President Cyril Ramaphosa had described the SRD in his State of the Nation Address as an essential mechanism for alleviating extreme poverty.
“We will use this grant as a basis for the introduction of a sustainable form of income support for unemployed people,” Ramaphosa had said two weeks ago.
The 2025 budget document stated that the Social Development Department will complete an extensive review of social security policy over the medium-term expenditure framework.