2015 Budget shows commitment to social security reforms
The National Department of Social Development has set out among its key objectives for the medium term, the deepening of social assistance and extending the scope for social security aimed at making inroads to the national challenge of poverty and inequality.
Key to achieving this objective is the social security reform programme. Through this programme the Department aims to alleviate poverty among those households with low or no income as well as prevent those households with income from falling into poverty.
The increases in social grants announced by the Minister of Finance, Mr Nhlanhla Nene, during the delivery of the 2015 Budget Speech at the joint sitting of Parliament on February 25 are in line with these objectives.
“Our social security reform programme aims to address the important gaps and weaknesses that we have identified in our social security system, and ensure that we provide comprehensive social security for all,” said Minister of Social Development, Ms Bathabile Dlamini.
Some of the areas the social security reform programme aims to address are a lack of social assistance coverage for unemployed adults in the age group 19-59; inadequate cover for workers in the informal sector; and a lack of retirement, death and disability cover for millions of formal sector workers and their households.
“In addition to these coverage gaps in social assistance and social insurance, we have also found that there are certain institutional reforms that we need to make to promote policy coherence, promote access for those who are unable to access their rightful benefits, and enhance efficiency in the provision of social security benefits,” Minister Dlamini explained.
The reforms will prioritise the introduction of mandatory contributions for retirement, death and disability benefits for workers in formal employment. At present, such contributions are only provided for via voluntary contributions to private insurance companies. Millions of South Africans are excluded from these benefits because the contributions are not legislated by government.
Minister Dlamini said the Department is considering the introduction of a National Social Security Fund that will collect mandatory contributions from workers in order to provide retirement, death and disability benefits based on uniform standards for all.
Government has also identified duplication and fragmentation of benefits among the existing social security funds. This includes double-dipping, where a single beneficiary may claim a disability benefit from the South African Social Security Agency (SASSA), while also claiming from the Compensation Fund or the Road Accident Fund for the same disability.
The ministries of Social Development, Finance, Labour are working together to finalise these policy proposals. The proposals will be presented in a discussion document for debate with stakeholders and the public so that the country can agree on a unified and comprehensive social security system that meets the needs of all South Africans and permanent residents.
Media enquiries:
Lumka Oliphant
Cell: 083 484 8067
Email: lumkao@dsd.gov.za
