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Department of Social DevelopmentPublic Hearings on Provincial Budgets & Expenditure Review 2001/02- 2007/08

PRESENTATION TO THE SELECT COMMITTEE ON FINANCE

18 OCTOBER 2005

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CONTENT

Overview of provincial expenditure Social development services Social Grants

Measures to sustain social grants expenditure

Policy & other legislative developmentsConditional grants expenditureConclusion

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Introduction

Social development expenditure has grown by an annual average rate of 28,8% from 2001/02 to 2004/05

Social assistance consumes the bulk of provincial expenditure due to high poverty levels in the country

Social grants have proved to be the most effective poverty alleviation strategy of government

Other social development services, including the most needed welfare services to vulnerable groups have not been adequately funded over the past years as a consequence thereof.

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Introduction

Rapid growth in social grants beneficiaries has a huge impact on provincial budgets and is driven by: Extension of the child support grant from 7yr

olds to 14 yr olds in the last 3 years Sharp increases in disability and foster care

grants Increased coverage for all grant types

Total number of beneficiaries increased from 3.6m in April 2001 to 9.4m in April 2005

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Overview of Provincial Expenditure- Soc Dev Services Spending on other social development

services has been growing at annual average rate of 16,4% (R2,3b 2001/02 to R3,6b in 2004/05)

Historically social welfare services have not been adequately funded due to: Pressure exerted by growth in social

assistance expenditure Lack of costed norms and standards

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Overview of Provincial Expenditure- Soc Dev Services The shifting of the social assistance function

will allow provinces to focus more on other social development services

The new service delivery model Defines the nature & scope of welfare services Defines the norms & standards Determines the policy for financial awards to

service providers, including NGOs Ensures integration of services with other

government departments

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Overview of Provincial Expenditure- Social Assistance Amount of R52 billion allocated for social

grant transfers in 2005/06 (excluding Admin) Provinces spent an amount of R25,139 billion

between April 2005 and September 2005 Overall spending of 48,32% of the total

allocated budget Largest spending in Western Cape, Limpopo,

KwaZulu Natal and Mpumalanga Largest spending in foster care grant and the

extension of the child support grant

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Overview of Provincial Expenditure- Old Age Grant Amount of R20,038 billion allocated for 2005/06 Provinces spent an amount of R9,9 billion between

April 2005 and September 2005 actual spending in all provinces stabilised due to

steady growth in beneficiary numbers Coverage of intended beneficiaries generally high Indemnity had impact in stabilising growth Coverage for old age very high & should stabilise

over the MTEF

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Overview of Provincial Expenditure- Disability Grant Overall consolidated spending of R6,6 billion against

allocated budget of R14,4 billion in 2005/06 Possible projected savings due to decrease in

beneficiary numbers for temporary disability grant All provinces engaged in process of lapsing

temporary disability grants Implementation of uniform processes and procedures

for reviewing temporary disability grants Project saving in all provinces, except KZN due to

large number of cases to be lapsed Various initiatives have led to more measured take

up rates & future growth should stabilise

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Overview of Provincial Expenditure- Foster Care Grant Amount of R2,045 billion allocated for 2005/06 Overall consolidated spending of R1,022 billion

between April 2005 and September 2005 Rapid increase in spending on this grant due to

strong growth in beneficiary numbers - especially in Mpumalanga, Eastern Cape, Free State, Limpopo and North West

Strong growth in beneficiary numbers due to: Backlogs in processing the grant Impact of HIV/AIDS Awareness of the grant

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Overview of Provincial Expenditure- CS Grant Amount of R14,467 billion allocated for 2005/06 Overall consolidated spending of R6,997 billion

between April 2005 and September 2005 Spending increasing on the extension of the child

support grant (7-14 yrs) Growth on child support grant for children between 0-

6 yrs decreasing due to: Data clean up initiatives Impact of indemnity – Over 50% of applications for

CSG Final yr for children under 14 yrs & growth over the

MTEF should be more predictable

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Measures to sustain social assistance expenditure Improvement of administration

Establishment of the Agency SOCPEN enhancements Efficiency gains resulting from Agency

improvement initiatives Implementation of fraud strategy

Impact of indemnity Data interrogation

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Measures to sustain social assistance expenditure Disability management

New definition of disability & rollout of the assessment tool

Rollout of the Management Information System (MIS)

Lapsing of temporary disabilities

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Pressures on future provincial expenditure Promulgation of legislation currently debated

in Parliament (Children’s, Older Person’s & Child Justice Bills)

Implementation on new service delivery model for social dev services

Possible extension of social benefit to refugees – pending litigation

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CONDITIONAL GRANTS FOR MTEF

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2005/06 FINANCIAL YEAR

The following Conditional Grant Programmes are currently managed by the Department in this financial year: HIV and AIDS Programme (National Integrated Plan

for Children Infected and Affected by HIV/AIDS) Integrated Social Development Grant Social Assistance Transfers Grant Social Assistance Administration Grant

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ALLOCATIONS

2005/06 2006/07 2007/08

R thousand

Social Development 55,931,759 61,204,563 66,138,889

(a) Integrated Social Development Services 388,000 411,280 431,844

(b) HIV and Aids (Community-Based Care) 138,391 138,854 142,797

(c) Administration of Social Assistance 3,382,055 3,584,320 3,734,190

(d) Social Assistance Grants 52,023,313 57,070,109 61,830,058

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HIV & AIDS GRANT

Purpose: Provide social welfare services to orphans and

vulnerable children who are infected and affected by HIV and Aids, within family and community context, in partnership with non profit making organizations (NGOs, CBOs and other community organizations);

Develop and support institutional structures and professionals, community workers and child and youth care workers through targeted training programmes in order to ensure effective delivery of services

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HIV & AIDS GRANT

This grant has been in existence since 2001/2002 financial year.

688 Home/Community Based Care Centres are currently being supported nationally

More than 261 000 orphans & vulnerable children have been identified in various parts of the country and are receiving appropriate care and support.

More than 412 000 families were supported

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Allocations 2001/02 –2003/04

PROVINCE Allocation2001/02R’000

Allocation2002/03R’000

Allocation2003/04R’000

Allocation2004/05R’000

TOTALR’000

Eastern Cape 1 500 4 798 6 658 7 089 20 045

Free State 1 500 6 650 9 228 9 825 27 203

Gauteng 1 000 6 983 9 690 10 315 27 988

KwaZulu-Natal 1 500 8 644 11 996 12 773 34 913

Limpopo 1 500 3 135 4 353 4 634 13 622

Mpumalanga 1 500 7 077 9 821 10 456 28 854

Northern Cape 1 500 2 660 3 691 3 930 11 781

North West 1 500 5 463 7 580 8 070 22 613

Western Cape 1 000 2 090 2 900 3 088 9 078

TOTAL 12 500 47 500 65 917 70 180 196 097

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Allocations 2005/06 –2007/08PROVINCE Allocation

2005/06R’000

Allocation2006/08R’000

Allocation2007/08R’000

TOTALR’000

Eastern Cape 13 979 14 026 14 424 42 429

Free State 19 374 19 439 19 991 58 804

Gauteng 20 341 20 409 20 988 61 738

KwaZulu-Natal 25 187 25 272 25 990 76 449

Limpopo 9 138 9 168 9 429 27 735

Mpumalanga 20 619 20 688 21 275 62 582

Northern Cape 7 750 7 776 7 997 23 523

North West 15 914 15 967 16 420 48 301

Western Cape 6 089 6 109 6 283 18 481

TOTAL 138 391 138 854 142 797 420 042

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INTEGRATED SOCIAL DEVELOPMENT GRANT (ISDG)PURPOSE: To enable the provinces to support and

provide appropriate social welfare services and development interventions, and

for immediate and appropriate short-term relief to vulnerable individuals and households who are not eligible and not receiving any form of assistance in terms of the Social Assistance Act, 1992

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ISDG- ALLOCATION: 2002/03 –2007/08Province 2003/04 2004/05 2005/06 2006/07 2007/08

  Allocation allocation allocation allocation allocation

           

           

  R'000 R'000 R'000 R'000 R'000

Eastern Cape 94,133 94,133 94,133 99,781 104,770

Free State 37,334 37,334 37,334 39,574 41,553

Gauteng 27,904 27,904 27,904 29,578 31,057

Kwazulu-Natal 68,185 68,185 68,185 72,276 75,890

Limpopo 61,146 61,146 61,146 64,815 68,055

Mpumalanga 27,651 27,651 27,651 29,310 30,776

Northern Cape 9,998 9,998 9,998 10,598 11,128

North West 41,615 41,615 41,615 44,112 46,317

Western Cape 20,034 20,034 20,034 21,236 22,298

Total 388,000 388,000 388,000 411,280 431,844

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INTEGRATED SOCIAL DEVELOPMENT GRANT This grant was previously known as the food

Emergency Grant focusing on food distribution

Objective since changed to provide wider social welfare services and development interventions

Previous grant proved to be unsustainable and complex to manage

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CONCLUSION

Social assistance continues to put pressure on provincial budgets despite initiatives to curb expenditure increases, mainly due to new policy developments

The shifting of the function will relieve such pressure from provinces and more attention will be given to other social dev services

The new social development services delivery model will ensure proper budgeting & increased allocation for other social services over the medium term

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THANK YOU