SRD Grant Extension: What Are the Possibilities?

Today we will talk about the possibilities of SASSA SRD gran extension. As we all know the R370 grant is going to be discontinued on 31 March 2025. Currently, there are 8.5 million recipients who are getting the benefits of the SRD grant. 

The grant was issued as a temporary relief during the COVID-19 pandemic. Despite this, it has been extended many times since the issue in May 2020.

SASSA SRD Grant Extension for 2026?

Last year in January (2024), we got the news that the SRD grant has been extended for March 2025. This news was a blessing for millions of homes. However, March 2025 is approaching now. All the ears and eyes are focused on the news about the SASSA SRD grant extension.

So what do you think? Will this SRD grant get extended for another year? Well, we have the answer.

One of our staff members spoke to the insider of the South African Social Security Agency (SASSA). We asked about another year’s extension of the SRD grant and here is what we got from them.

“We are very hopeful that the SRD grant will extend for one another year. The grant is going to end in 31 March 2025 but it could extend to March 2026”

So we only talk about this matter and this is the answer that we got from them. However, there is no official statement from the SASSA so far.

SRD Grant Funding Stats (2024-2027)

The South African government plans to continue the Social Relief of Distress (SRD) grant until at least March 2027. This decision is supported by Finance Minister Enoch Godongwana’s 2024 budget update, called the Medium Term Budget Policy Statement (MTBPS).

In the budget:

• For the year 2024/25, the government has set aside R33.6 billion for the SRD grant.
• For 2025/26, they’ve provisionally planned to spend R35.2 billion.
• For 2026/27, they’ve provisionally planned to allocate R36.8 billion.

This shows that the government is preparing to fund the SRD grant for the next few years, but some of the later amounts are still subject to final approval.

How Will the Government Arrange the Budget?

The funding for the extension of the grant is unclear so far. However, here are some ways that the government can adopt.

1. Reallocation of Existing Budgets

• The government could redirect funds from less critical or underutilized programs to prioritize the SRD grant.
• This may involve reducing budgets for non-essential sectors or delaying certain infrastructure projects.

2. Increased Tax Revenue

• The government could introduce new taxes or adjust existing ones, such as raising VAT, personal income tax, or corporate taxes.
• Combating tax evasion and improving collection efficiency could also increase available revenue.

3. Economic Growth Initiatives

• Policies aimed at stimulating economic growth can lead to higher tax revenue without increasing tax rates.
• Encouraging investment, boosting employment, and supporting small businesses could indirectly provide the funds needed.

4. Borrowing

• The government could take on additional debt by issuing bonds or securing loans from international financial institutions.
• This would provide immediate funds but may increase the debt-to-GDP ratio.

5. International Aid or Grants

• South Africa could seek financial assistance from international donors, organizations, or developmental agencies for targeted social welfare programs.

6. Partnerships with the Private Sector

• Public-private partnerships could be explored to share the financial burden of supporting vulnerable populations.
• Corporations might contribute as part of their corporate social responsibility (CSR) initiatives.

7. Efficiency Improvements in Government Spending

• Reducing corruption, wasteful spending, and inefficiencies in public services could free up funds for the SRD grant.
• Implementing stricter auditing and monitoring mechanisms can ensure optimal use of resources.

Universal Basic Income Grant (UBIG): A Potential Replacement for the SRD Grant

The South African government is reportedly considering introducing a Universal Basic Income Grant (UBIG) as a long-term solution to address poverty and unemployment in the country. 

This initiative could replace the temporary Social Relief of Distress (SRD) grant, offering a permanent alternative to support vulnerable populations.

What is the Universal Basic Income Grant?

The UBIG is a proposed social welfare program that would provide regular financial assistance to all eligible citizens, regardless of employment status. 

Unlike the SRD grant, which was introduced as temporary relief during the COVID-19 pandemic, the UBIG would serve as a permanent safety net aimed at reducing economic inequality and alleviating poverty.

Key Features of UBIG

• Permanent Solution: The UBIG would not have an expiration date like the SRD grant and would be a long-term commitment by the government to support citizens in need.
• Broader Coverage: While the SRD grant is targeted at specific groups, the UBIG is envisioned to cover a larger portion of the population, including unemployed individuals and those with limited income.
• Economic Stability: By providing a guaranteed income, the UBIG aims to offer financial stability to recipients, potentially stimulating local economies as people spend their grants on basic needs.

Reference: https://www.treasury.gov.za/documents/National%20Budget/2024/