PRETORIA — The Department of Social Development is facing intense scrutiny after revealing a massive R4.8 billion underspend in its R281.1 billion social grant budget for the 2025/26 financial year. Civil society organizations warn that the shortfall is not a sign of fiscal efficiency, but rather the result of exclusionary administrative systems that are locking millions of vulnerable South Africans out of vital financial support.
Department Cites Improved Verification Amid Growing Poverty
During a recent briefing with its parliamentary portfolio committee, the department attributed the underspend—which marks an increase from the R2.6 billion unspent in the previous financial year—to stricter grant verification measures, lower uptake of certain grants, and delays in paying Social Relief of Distress (SRD) grants.
However, these explanations have been met with skepticism. While the department and National Treasury frame the unspent funds as a victory against fraud, critics argue the savings come at a severe cost to the country’s most marginalized citizens during a deepening cost-of-living crisis marked by rising food and fuel prices.
“Set Up to Fail”: The Digital Divide and Excluded Beneficiaries
Matshidiso Lencoasa, a budget analyst at civil society organization Section27, highlighted the stark reality of persistent poverty and an economy failing to generate adequate jobs. Lencoasa noted that while anti-fraud measures are necessary, there is a critical mismatch in the system’s execution.
“Between 10 to 15% of successful applicants of the SRD grant are still not receiving their money,” Lencoasa explained. “We cannot overlook the fact that there are millions of people who qualify and need this social protection and are not receiving it.”
Siyanda Baduza, a Social Security researcher at the Institute for Economic Justice (IEJ), echoed these concerns, pointing out that the department’s reliance on digital, online-only verification processes is inherently exclusionary. Baduza revealed alarming statistics: while approximately 9 million people are approved for grants monthly, only about 7 million actually receive their payments.
This leaves a gap of roughly 2 million approved beneficiaries who are left empty-handed. Baduza explained that many vulnerable individuals lack smartphones, personal bank accounts, or consistent access to the specific phone numbers linked to their applications, making it nearly impossible to navigate the online-only system to update their banking details.
“We have basically substituted in-person capacity at SASSA offices for digital processes, and those digital processes are being pushed mainly because they’re cost-saving, not because they allow for better service,” Baduza stated.
High Court Ruling and Vulnerable Grant Shortfalls
The exclusionary nature of the grant system is not just a matter of administrative friction; it is a legal issue. The Pretoria High Court recently ruled that the system and its verification processes were largely unconstitutional due to the way they unlawfully excluded eligible individuals from receiving support.
The underspend is heavily concentrated in grants meant for the most vulnerable demographics. The old age grant saw an underspend of just under R800 million, the child support grant was under by slightly over R500 million, and the disability grant underspent by R318 million. For many households, these grants are the sole source of income.
The Threat of Budget Cuts and Calls for Reinvestment
A major concern raised by both analysts is the potential response from National Treasury. Historically, significant underspending leads the Treasury to reduce the department’s budget allocation in the following year, operating on the assumption that the financial need has decreased.
Both Lencoasa and Baduza vehemently argued against returning the R4.8 billion to the national fiscus to service high debt costs. Instead, they urge that the funds be reinvested directly into the social protection system.
Baduza provided a breakdown of how the R4.8 billion could be utilized to alleviate the crisis: it could fund an additional R50 increase for every current SRD grant recipient, fund an extra one billion beneficiaries, or be injected back into the South African Social Security Agency (SASSA) to improve operational efficiency and reduce queue times.
The Path Forward: Basic Income Grant and Systemic Reform
Looking for sustainable solutions, Lencoasa suggested immediate short-term interventions. This includes redirecting the unspent funds to rebuild the exclusionary systems and increase grant allocations to shield the poor from a harsh economy.
Furthermore, Lencoasa urged the government to abandon its plans to appeal the High Court ruling to the Constitutional Court. Instead, the department should redirect that energy toward making the grant systems fairer and more accessible.
Ultimately, both experts agree that the underspend does not weaken the argument for a Basic Income Grant; rather, it strengthens it. The unspent funds highlight a systemic failure to distribute existing resources fairly, proving that the need for comprehensive social security in South Africa is intensifying, not decreasing.
