Comprehensive Overview of South Africa’s 2025 Social Grant Adjustments and Extensions
In the 2025 Budget Speech delivered on March 12, Finance Minister Enoch Godongwana announced significant updates to South Africa’s social grant system, aiming to alleviate the financial pressures faced by many citizens. These changes include the extension of the Social Relief of Distress (SRD) grant and increases to various SASSA grants.
Extension of the SRD Grant
The SRD grant, introduced during the COVID-19 pandemic as a temporary measure, has been extended for an additional year, now set to continue until the end of March 2026. This grant provides R370 per month to over 10 million beneficiaries, offering essential support to unemployed individuals and those without other forms of income. The government has allocated R35.2 billion to fund this extension.
Increases to SASSA Grants
To further support vulnerable populations, the government has allocated R284.7 billion for permanent social grants in the 2025/26 fiscal year, facilitating the following increases effective from April 2025:
- Old Age and Disability Grants: An increase of R130 per month, bringing the total to R2,315.
- Child Support Grant: An increase of R30 per month, raising the grant to R560.
- Foster Care Grant: An increase of R70 per month.
These adjustments are designed to provide inflation-beating increases, offering much-needed relief to beneficiaries.
Funding and Economic Implications
To accommodate these enhancements, the government plans to increase the value-added tax (VAT) by 0.5 percentage points in 2025, with an additional 0.5 percentage point hike in the following year, resulting in a VAT rate of 16% by 2026/27. This decision has sparked debate, as VAT is a consumption tax affecting all consumers, including low-income households.
How the Future Looks
The SRD grant’s future beyond March 2026 remains under consideration, with discussions focusing on establishing more sustainable income support mechanisms for unemployed individuals. The outcome of a review of active labour market programs, expected by September 2025, will inform the grant’s long-term structure.
These developments underscore the government’s commitment to supporting vulnerable citizens amid economic challenges, while also highlighting the complexities involved in balancing fiscal responsibility with social welfare.
Also read: Finance Minister Faces Backlash for Linking SRD Grant to Proposed VAT Hike
