SRD Grant Gets One More Year, See What Treasury Revealed About The Replacement Plan

 

Illustration: ThePulse

The Social Relief of Distress (SRD) grant will stay in place for another year, National Treasury announced on Wednesday, while work continues on a proposed replacement designed to link beneficiaries to jobs, training and other opportunities. The decision matters to the millions of South Africans who depend on the R370 monthly payment, and it also shows that the long-promised redesign of the grant is still some way from being finalised.

In its 2026 Medium-Term Budget Policy Statement (MTBPS), Treasury said the extension would allow more time to integrate the grant with labour market activation, skills development and enterprise support initiatives. According to the Cape Argus, Treasury said beneficiaries would be linked to employment, training and business opportunities through the MzansiXchange, a data exchange platform that would allow information to be verified across government departments.

The announcement stops short of what many observers had been expecting. Finance Minister Enoch Godongwana had previously undertaken to outline the modalities and format of a new grant in the MTBPS. President Cyril Ramaphosa has referred to that proposed replacement as a Livelihood Grant. Wednesday's statement did not provide those details, and confirmed only that the existing grant would continue while the design work carries on.

The background to the redesign goes back to the start of this year. In his State of the Nation Address, Ramaphosa said the SRD grant had played a pivotal role in alleviating widespread poverty. He told Parliament that the grant would be redesigned during the year to support livelihoods, skills development, work opportunities and productive activity more effectively. In February, Godongwana said discussions were under way on a New Livelihood Grant that would replace the SRD.

The SRD grant itself was introduced in March 2020, during the Covid-19 pandemic, as an emergency measure for people who had lost their income and had no other form of state support. It has since provided assistance to millions of South Africans facing food insecurity and unemployment. What began as a temporary response has been extended repeatedly, and it has gradually become one of the most closely watched elements of the country's social protection system.

The financial commitment is substantial. In February, Godongwana allocated an additional R36.4 billion to extend payments at the current rate of R370 per beneficiary per month until 31 March 2027. That compares with R34.2 billion allocated in the 2025/26 financial year. The extension announced this week therefore carries the grant beyond that date, although the final amounts and the exact length of the extension will be set out in the detailed budget documents.

Treasury has also flagged the grant as a source of financial risk. In the MTBPS, it identified the SRD grant as one of three expenditure risks facing government, together with the National Student Financial Aid Scheme and the compensation of public sector employees. The wording used is significant. Treasury said legal challenges to the regulations governing the grant represent a material expenditure risk.

That reference points to a court case that is still unresolved. Government has appealed to the Supreme Court of Appeal against a High Court judgment delivered in January this year. According to the information provided, the High Court found the means-test threshold, the value of the grant, the definition of income and the income-verification arrangements to be invalid. The appeal means the judgment is being contested, and the legal position will remain unsettled until the appeal court rules.

Treasury said the fiscal impact will depend on the outcome of the litigation and on the government's policy response. It also warned that the number of beneficiaries and the overall cost of the grant could rise substantially if the High Court judgment is upheld. Preliminary estimates quoted in the MTBPS suggest that such an outcome could add three million eligible beneficiaries and raise the annual funding requirement from about R36 billion to R74 billion.

Those figures help explain why the matter is being treated so carefully. A change in the means test or the definition of income could widen eligibility significantly, which would in turn increase the pressure on a budget that is already stretched. Treasury has not said what it would do if the judgment is upheld, and these numbers should be understood as preliminary estimates and not as final projections.

For beneficiaries, the immediate message is one of continuity. The R370 grant will carry on, and there is no indication in the information released so far that the amount will change in the short term. That said, the grant has been criticised in the past for being too small to cover basic needs, and the same issue is likely to feature in the debate over what comes next. Whether a Livelihood Grant would pay a higher amount, how it would be targeted and who would qualify are all questions that remain open.

Illustration: ThePulse

The proposed link to employment and enterprise support is an important part of the redesign. The idea, as described by Treasury, is that grant recipients would be connected to training and work opportunities through shared data, which would help government verify who is eligible and direct people to programmes that could help them earn an income. Supporters of this approach argue that it could make the grant more than a stopgap and help people move towards sustainable livelihoods.

There are, however, practical and policy questions attached to it. Data sharing across departments raises matters of privacy, accuracy and administrative capacity. Past reviews of the grant have highlighted problems with verification and with applicants who were wrongly declined. How well the MzansiXchange platform works in practice, and how people are protected if the data is wrong, will matter a great deal. These are issues that civil society groups, legal experts and public policy analysts are likely to raise as more detail emerges, and the debate is expected to continue.

The decision also has a political dimension. The call for a permanent income support mechanism for working-age adults has been a long-running topic of public debate, with some groups arguing for a basic income grant and others warning about affordability and the risk of dependency. The government's current approach, which pairs financial support with employment pathways, sits between those positions. Reactions to the MTBPS announcement are likely to reflect these differing views, and it is fair to say that both supporters and critics of the current approach can point to evidence that supports their case.

The announcement came on the same day as other significant budget measures, including temporary relief on fuel levies and a lower economic growth forecast. Together, these show the difficult balance Treasury is trying to strike, supporting households under pressure while keeping public finances on a sustainable path. Readers can also follow our related coverage of the fuel levy relief starting on 4 November and of the budget response from the Organisation Undoing Tax Abuse.

Independent platforms such as ThePulse continue to follow developments around stories like this. Through verification, context, and responsible reporting, the platform helps readers understand events beyond the initial headlines. Readers interested in deeper coverage can continue following developments there.

For now, the position is that the SRD grant continues at R370 a month, the Livelihood Grant has been announced in principle but not yet detailed, and a court appeal could still change who qualifies and how much the grant costs. Treasury says the extension will give it time to integrate the grant with employment and skills programmes, and further information on the new model is expected once that work is complete.

The next developments to watch are the outcome of the appeal at the Supreme Court of Appeal and any announcement on the design of the new grant. Both could reshape the system, and both will affect the millions of people who rely on this payment to get by from month to month.

What do you think the next version of the grant should look like? Tell us in the comments, and share this article with anyone who may be affected by the SRD decision.

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