1. JOINT BUDGET COMMITTEE MEETING SOCIAL ASSISTANCE 19 NOVEMBER 2003

2. CONTENT Background Policy priorities Beneficiaries Expenditure Trends Challenges Recommendation

3. BACKGROUND Social Assistance include: Old Age Grant War Veterans Disability Care Dependency Grant In-Aid Foster Care Child Support Grant

4. BACKGROUND [2] Old Age Grant: - Women 60-years and older;and - Men 65-years and older War Veterans: Disabled and older persons who are 60 years and older and who fought in the Second World War or the Korean War Disability: People with disabilities over 18-years

5. BACKGROUND [3] Care Dependency: Parents of children with disabilities under the age of 18-years Grant In-Aid: Persons who are in receipt of old age, war veterans and disability grants, who are unable to care for themselves Foster Care: Legal foster parents of children under the age of 18-years

6. BACKGROUND [4] Child Support Grant: Primary care givers of children under the age of 7-years Extension of the Child Support Grant: Primary care givers of children: -Age 7 and 8-years in 2003/04 -Age 9 and 10-years in 2004/05 -Age 11,12 and 13-years in 2005/06

7. POLICY PRIORITIES OVER MEDIUM TERM Further extension of the social assistance programmes, through the Child Support Grant, and grants targeting other vulnerable groups The progressively strengthening of the social security system Establishment of a National Social Security Agency

8. BENEFICIARIES Total number of beneficiaries increased from 3,2 million in April 2000 to 7,1 million in October 2003 Old Age beneficiaries increased from 1,8 million in April 2000 to about 2,032 million in October 2003 Disability beneficiaries increased from 607 thousand in April 2000 to 1,1 million in October 2003 Foster Care beneficiaries increased from 49,8 thousand to 179 thousand in October 2003

9. BENEFICIARIES [2] Care Dependency beneficiaries increased from 22,7 thousand to 72 thousand in October 2003 Child Support Grant beneficiaries increased from 348 thousand to 3,7 million in October 2003, including the extension to children 7 to 8- years

10. MAIN REASONS FOR INCREASES Awareness Regulatory changes –disability assessment approach –elimination of pension medical officers Increased collaboration between DoSD, Home Affairs, Justice and Health Extension of CSG: phased increase of up to 14 years.(previously 0-7yrs)

11. EXPENDITURE TRENDS Social development expenditure is projected at R49,3 billion in 2003/04 growing at an average of 12,7% to R70,5 billion in 2006/07 (p64 of MTBPS). The allocation for 2003/04, before adjustments is R34,2 billion (average 25,1% of prov. budgets) for social assistance grants and administrative cost. This amount is projected to increase to R47,2 billion (average 24,7%) in the 2005/06 financial year. In the 2003/04 financial year the largest increase is in the Western Cape (31,9%), KwaZulu-Natal (28,3%) and Limpopo (26%)

12. CHALLENGES The cost drivers in the social assistance budget: -Rapid increase in number of beneficiaries, especially in the Child Support and Disability Grants -Increases in administrative (specifically human resources) and related costs not in line with the increase in the number of beneficiaries -Lack of capacity to monitor compliance and prevent fraud

13. CONCLUSION The additional R2,1 billion allocated in the 2003/04 financial year for the unanticipated growth in grant beneficiary numbers, may still be in adequate. Social Development is projecting an estimated deficit of R3,6 billion including backlogs in the current financial year. The additional R100 million allocated for the extension of the Child Support Grant (7 to 8-years) in the current financial year may also be inadequate due to higher than anticipated growth.

14. RECOMMENDATIONS It is recommended that:  the Committee should note the -Social assistance policy priorities; -The growth in social assistance beneficiary numbers, -The expenditure trends; and -The social assistance challenges.  The Committee supports the Medium Term Budget Policy Statement with regard to Social Security medium term expenditure forecast