[DEBATE] : (Fwd) More child grants coming, belatedly
pbond at mail.ngo.za
Tue Jun 3 06:38:43 BST 2008
Adjusting the poverty line
June 02, 2008 Edition 1
At last, the government has done the maths and lifted the poverty line
for child grants. The department of social development plans to adjust
the means test in line with inflation, so that children with caregivers
earning under R2 200 per month can receive the child support grant (CSG).
Of more than 12 million social grants being disbursed each month, the
vast majority (8.6 million) already go to children. But the extent of
child poverty is so great that this is not enough. And despite the
increasing numbers of children accessing the grant, it is less than what
was originally intended.
As the Minister of Social Development, Zola Skweyiya, acknowledged in
his budget vote speech on Friday, "Non-adjustment of the means test over
the years . . . has kept many poor people out of the social security system.
"This, coupled with beyond- prediction higher inflation rates, has led
to the erosion of the value of these grants. Consequently, we have
agreed to work towards the removal of the archaic means test on certain
The national treasury is acutely aware of the effects of inflation on
the poor and agrees that an adjustment is needed. Earlier this year, the
minister of finance in his Budget speech announced that the means test
would be reviewed.
However, the treasury still has to approve the changes to the means test
that have now been put down into draft regulations by the minister of
The treasury has to juggle multiple claims on the national budget. But
in the case of the adjustment of the CSG means test, this claim must
surely have priority. The means test was set 10 years ago and has never
been reviewed despite inflation eroding it every year. To continue like
this would be discriminatory and retrogressive. And that is not allowed
by the constitution.
The CSG, a cash transfer of R210 a month for children under 14, is
means-tested in that applicants have to prove that they are sufficiently
poor to qualify. But poverty, of course, is defined by where you happen
to draw the line.
In 1998, when the grant was introduced, two lines were drawn: an income
threshold of R800 a month was used for urban children living in formal
housing, and a higher threshold of R1 100 for rural children or those
living in informal dwellings.
Quite apart from occasional confusion about which threshold to use, the
main problem with the means test was that it remained static and was
never adjusted, even in the context of high inflation.
This problem of non-adjustment has been specific to the CSG, while the
income thresholds for other grants like the old-age pension and
disability grant increase every year as the benefit amount increases.
The state's failure to adjust the poverty line for the CSG meant that
every year, more children were cut out of the social security safety net
as the definition of poverty was effectively contracted - until now.
Calculations by the Economic Policy Research Institute, commissioned by
the Department of Social Development, found that the means test should
have increased to R1 900 by 2007 in order to retain the real value of
the poverty line. The Children's Institute at the University of Cape
Town calculated the real value of the R1 100 threshold (set in 1998) at
January 2008, using CPI for the poorest 20% of the population.
These calculations indicated that the threshold should have been raised
to R2 168 by the beginning of this year - just in order to retain its
The threshold being proposed by the minister of social development is R2
200 and is spot on. It has also simultaneously solved the problem of the
two income thresholds by collapsing them.
Because the new proposed means test is now linked to the grant amount,
it will - like other grants - automatically adjust every year as the
cash payment increases in line with inflation.
With food prices rocketing, inflation-adjusted social grants are
essential for ensuring that the millions of poor children in South
Africa have enough to eat. What remains is to extend this support to
children over the age of 14 years, who also need food, clothes,
education and good health.
# Katharine Hall is a senior researcher in the Child Poverty Programme
of the Children's Institute, University of Cape Town.
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