Social Assistance during South Africa's National Lockdown: Examining the COVID-19 Grant, Changes to the Child Support Grant, and Post-October Policy Options

In response to the adverse effects of the COVID-19 pandemic, the South African government expanded its system of social assistance by increasing the amounts of all existing social grants and introducing a special COVID-19 grant, both for six months. In particular, the COVID-19 grant has brought millions of previously unreached individuals now into the system. This paper uses new data from Wave 2 of the NIDS-CRAM to analyse the distribution of application for and receipt of the COVID-19 grant, examine how the Child Support Grant (CSG) ‘per grant’ topup in May compares to the ‘per caregiver’ top-up in place from June 2020 onwards, and investigate the costs and welfare effects of several alternative policy options to consider once the expansion of the grants system comes to an end after October. We find that application for and receipt of the COVID-19 grant has been relatively pro-poor, and that conditional on applying, certain individuals are more likely than others to be successful in their application. Despite the grant’s progressivity, we show that the extent of under-coverage is however regressive. We show that the ‘per child’ CSG top-up is more pro-poor than the ‘per caregiver’ top-up, but only marginally. This is important considering that we estimate the cost of the chosen policy to be substantially cheaper than a six-month ‘per child’ top-up. Considering alternative post-October policies, we find that an extension of the current grant policy package may be preferable to a Basic Income Grant or special public works programme, however more analysis is required.