Social security will again be the fastest-growing category of government expenditure in the budget - a trend that began in 2001. It is one of the largest categories of spending, second only to education.
Social grant payments to poor households now amount to R70bn/year - equal to 3,4% of GDP - and reach 10,8m beneficiaries. These include 2,1m grants for old age pensions; 1,2m disability grants; and 6,5m income support grants to children, which include child support, care dependency and foster-care grants.
The 2006 budget allows for an increase in the number of beneficiaries as well as an increase in the size of the grants from April 1. Old age, disability and care dependency grants will increase by R40 to R820/month, the foster care grant by R30 to R590/month and the child support grant by R10 to R190/month.
The enormous growth in the welfare system in the past five years has been both planned and unplanned. Since 2001, when the child support grant was introduced, the system has been gradually expanded to cover children up until their 14th birthday.
However, the system also grew suddenly and unexpectedly because of fraud and the impact of HIV/Aids, which saw growing numbers of sick people accessing disability grants.
Efforts to combat fraud have so far resulted in the investigation of several doctors involved in the issuing of fraudulent medical certificates, as well as the discovery of 12 000 public servants allegedly involved in social grant fraud.
Government recently reviewed both the means test and the definition of disability, and set guidelines which it hopes will result in less ambiguity, less fraud and greater fairness.
The welfare budget - until this year located in the provinces, which distributed social grants - is undergoing major reconstruction.
Government last year took steps to remove the payment of social grants from provinces and centralise it in a new government agency, the SA Social Security Agency. From April 1, funds for social grants will be transferred to the agency and not to the provinces. Over time the agency hopes to consolidate contracts with payment agents to achieve economies of scale.
The agency itself has a budget of R12,4bn over the three-year budget period. This includes R408m earmarked for improving the integrity of the system.
Finance minister Trevor Manuel says research shows government's targeted approach to welfare is highly effective in reaching the poorest and most vulnerable. Government grants contribute more than half of the income of the poorest 20% of households and have led to significant improvements in child nutrition, Manuel says.
However, the challenge remains, he says, to balance "income support commitments with continued strengthening of expenditure on infrastructure and service delivery".
