ANALYSIS: How social security could make life better in SA after COVID-19
This article first appeared on The Conversation.
The national state of disaster declared by the South African government on 15 March 2020 was a direct response to COVID-19. But that response inadvertently intensified three other existing disasters: poverty, unemployment and inequality. More South Africans are poor and unemployed now than before the lockdown was imposed. But some people in government and the private sector are richer than before, thanks to tender corruption and price gouging.
Six months later, South Africa is at a low lockdown level. This is the “new normal”. But the hardship and vulnerabilities that COVID-19 created or exacerbated are not normal, and people still need government support. It’s needed on at least three levels: humanitarian response, structural poverty reduction policies and economic recovery stimuli. At a recent webinar hosted by the DSI-NRF Centre of Excellence in Food Security, we agreed broadly on four priorities for social security in South Africa, to “build back better” after COVID-19.
1. MAKE COVID-19 EMERGENCY RELIEF MEASURES PERMANENT
Recognising the social and human costs of the pandemic and the lockdown, the government announced interventions to provide protection. These included top-ups to existing social grants (R250 a month), a caregiver grant (R500 a month), a COVID-19 Social Relief of Distress grant (R350 a month), a Temporary Employee Relief Scheme, and food parcels.
These emergency relief measures were operational for six months and are due to end in October 2020, but the impacts of COVID-19 will be felt long after. The lockdown shut down both the supply- and the demand-side of the economy simultaneously. At least three million people lost their jobs or livelihoods in the first month of lockdown, and with the negative economic consequences predicted to last for at least the next three years, that number is more likely to rise than fall.
There is no case for withdrawing the special relief programmes at this time. Social grants should continue to be paid at their higher levels, and the caregiver and Social Relief of Distress grants should be made permanent. Working age South Africans also need and have a constitutional right to social assistance.
2. INTRODUCE BASIC INCOME SUPPORT
COVID-19 exposed a huge gap at the heart of South Africa’s social security system: the lack of any form of income support for low-income or unemployed people aged 18-59.
The lockdown forced economically active adults to sit at home for months. The less fortunate (usually poorer) had no income and, especially in the case of informal workers, no access to unemployment benefits or temporary employee relief. Millions applied for the special Social Relief of Distress grant, but R350 a month is not enough to live on.
Unemployment protection needs to expand to cover all workers, regardless of their prior employment status.
Income support should also be connected to labour activation strategies. Until this happens, in the absence of social insurance for workers in the informal sector, we support the campaign led by a coalition of civil society organisations for basic income support. This should be paid at the upper-bound poverty line of R1,227 and linked to a system of labour activation.
3. OVERHAUL THE SOCIAL SECURITY SYSTEM
One lesson from the COVID-19 response – not only in South Africa – is that it is simpler and more efficient to build on existing systems than to set up new programmes in the middle of a crisis. Topping up the social grants was straightforward and worked best of the emergency relief measures.
The process of verifying applications for the COVID-19 special grants was slow, error-prone and, according to the Auditor-General, susceptible to the abuse and mismanagement of funds. In September the Temporary Employer-Employee Relief Scheme and several senior managers of the Unemployment Insurance Fund were suspended. Many COVID-19 food parcels were also stolen or diverted by local government officials.
This has generated another important lesson from COVID-19. All these schemes have been found wanting in terms of their delivery capability. The entire social security system needs to be reviewed: its criteria, online registration, payment methods and monitoring. It needs linked registries of beneficiaries, entitlements and contributions. Officials must be held accountable. All social security agencies must be supervised independently of political office-bearers.
4. LAUNCH A NATIONAL CONVERSATION ABOUT SOCIAL SECURITY
What social security are poor and vulnerable South Africans entitled to? The constitution provides for access to all to adequate food and water, healthcare, housing and social security. But the right to social security, while referred to in the Bill of Rights, is not formally defined in any law. Conceptual and legal clarity is needed about what is meant by social security in South Africa. It is broader than just the right to grants.
South Africa does not have a social security policy or strategy. The White Paper for Social Welfare dates from 1997. The National Development Plan of 2011 notes the gap in protection. Only about 7% of unemployed people are covered by unemployment insurance.
The constitutional right to social security or social protection has two components: coverage and adequacy. Coverage must be universal, but the support provided must be enough to ensure that people can survive with dignity. Benefits must relate to the cost of a decent standard of living.
There is a deep conservatism among policymakers about giving income to working-age people. But COVID-19 has changed this. Recognising that unemployment in South Africa is structural makes giving income support to the working-age unemployed unavoidable, not only during the COVID-19 lockdown but in the long term. This opportunity to reconfigure the social contract around social security must be embraced.
The Treasury and the Minister of Finance will complain that extending the emergency relief measures and introducing new grants is unaffordable. South Africa was already facing a fiscal crisis before COVID-19, with low growth, rising government debt and falling tax revenues. Increasing social spending would increase the deficit.
On the other hand, there is an economic argument, supported by international evidence, in favour of positive growth effects of social grants. Injecting purchasing power into poor households will stimulate demand and assist economic recovery. Reimagining social security in South Africa is not only a humanitarian imperative and a means of achieving social justice, it makes economic sense. It is something that the country cannot afford not to do.
Stephen Devereux, Research Fellow, Institute of Development Studies, University of Sussex.
Alex van den Heever, Chair of Social Security Systems Administration and Management Studies, Adjunct Professor in the School of Governance, University of the Witwatersrand.
Other contributors to this article were Isobel Frye, director at the Studies in Poverty and Inequality Institute, and Lynette Maart, national director of Black Sash.