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Cost Analysis – Extending the child support grant, South Africa

We were asked to explore the cost implications of two proposals for extending the social protection system in South Africa to cover pregnant women, namely:

  • a proposal made by the South African Law Reform Commission to extend the child support grant to all pregnant self-employed workers in the informal economy who fulfil the eligibility criteria for the child support grant;
  • a proposal made by the national Department of Social Development for the introduction of a maternity support grant.

It is critically important to keep the design of grants simple. Doing so makes them easy to administer, and ensures that eligible applicants understand them.

On completion of our research, we recommended that the maternity support grant be structured as follows:

  • All pregnant women are eligible to receive the grant, provided they do not earn more than the income thresholds applicable to the child support grant (in 2022 the thresholds were R57 600 per year for single persons and a combined income of R115 200 per year for married couples or couples in a permanent life partnership).
  • The value of the grant is the same as the child support grant (in 2022, R480 per month).
  • The grant to a pregnant woman will commence at the start of the 2nd trimester of her pregnancy, as proven by the submission of a copy of her maternity case record from a state or private health facility. It will be paid over a fixed period of nine months, or until the grant transitions to a child support grant, whichever is the shorter period.
  • The maternity support grant will automatically transition to a child support grant in the instance of a live birth, and upon the registration of the new-born child’s birth with the Department of Home Affairs.

If these recommendations are followed the benefits likely to accrue to government, pregnant women, and children from the introduction of a maternity support grant will exceed the estimated annual fiscal cost of R2.79 billion required to pay for it. Note that R868 million, or 31%, of this amount would be in lieu of the child support grant for children under 3 months of age. The cost to government of introducing a maternity support grant would therefore be R1.92 billion.

For advocacy purposes, we noted that, when the framing of the need for the grant, advocates should emphasise improving new-born and child health, particularly the prevention of stunting, since this is where most of the long-term benefits will be realised.

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