The economic classification of the allocation is as follows:.

An amount of R 13 410 000 was allocated in respect of the improvement of conditions of service (ICS) carry - through costs since 1 July 2002 as well as new ICS costs from 1 July 2003.


Transfer Payments to the amount of R 3 394 531 000 makes out 90,21% of the total allocation. Only R 368 293 000 (9,79%) is available for other services rendered by the department.


Transfer Payments (R 3 394 531 000) is made up as follows:

An amount of R 3 113 532 000 (82,74 %) of the total allocation was allocated to cover the expenditure in respect of social pensions and grants. This is an increase of R 459 454 000 (17,26%) on the allocation of the previous financial year.

Only an amount of R 649 292 000(17,26%) could be allocated towards other services rendered by the department.

1.3.2 EXPENDITURE PATTERNS

In real terms there was only significant growth in the allocation for social assistance grants.

The annual allocation in respect of other services only allows the department to sustain the existing services and make provision for inflationary increases.

No provision could be made for all new services that should be implemented or all new service providers who applied for assistance from the government.

Due to the rapid increases in the applications for social assistance grants and the fact that it is a

statutory payment most of the additional funds received for a new financial year was directed towards the service. The 80/20 principle could thus not be achieved.


Regarding the increases in personnel expenditure the department is restructuring its workforce on all levels of the establishment and is in the process of filling in vacancies.

SOCIAL SECURITY AND PUSHING BACK THE FRONTIERS OF POVERTY

PRESENTATION TO THE NATIONAL COUNCIL OF PROVINCES ON
SOCIAL SECURITY IN THE WESTERN CAPE AND PUSHING
BACK THE FRONTIERS OF POVERTY.


1. INTRODUCTION

Social Security in South Africa is a very important way of lessening poverty and ensuring a redistribution of income. Pensions and social grants are the main source of income for a large proportion of the very poor and is a key cornerstone in the Government's approach to pushing back the frontiers of poverty.


2. POVERTY IN THE WESTERN CAPE

Within the context of poverty, the provision of social assistance have been identified as integral to the survival of many people living in poverty and are thus a key focus area of the Department. Approximately 85% of the Department's budget is "spent" on social assistance.

The Western Cape is considered to be a wealthy province in South Africa, yet a vast proportion of its population are living in absolute poverty, and display a level of human development more often associated with the "poor" provinces in our country. The Reconstruction and Development Program was formulated in response to poverty in our country and has been implemented in our province to reduce inequality between races and between rich and poor. The formulation of anti-poverty policies is, however, being hampered by a lack of adequate baseline in . regarding poverty. Policies cannot be formulated without a thorough knowledge of who the poor and vulnerable are, how poor they are and where they are located. The Sub-Directorate Social Research and Population Development in the Branch Social Services of the Department of Health and Social Services have attempted to address these questions. Census 96's Community Profile Database of the Western Cape has been used as the data source. (Stats SA, 1999)

Poverty is a multi-dimensional condition and an adequate definition of poverty will include as many facets of poverty as possible. There are two predominant approaches to defining poverty. A subsistence approach to defining poverty which is based on an estimate of the level of income necessary for buying food sufficient to satisfy the average nutritional needs of each adult and child within a family. The cost of this food is seen as the basic cost of subsistence, which, when added to an allowance for basic clothing, fuel and rent, produces an income figure below which families can be said to be in poverty. (Webster, 1986) The most fundamental criticism of the subsistence approach is its simplistic assumption that the basic needs of an individual or family can be determined merely through an assessment of the biological and physiological demands of the human body for food, warmth and shelter. The definition of needs can be more broadly interpreted in terms of what things are socially


expected, and thus poverty might be defined in terms of the degree to which people do not enjoy the basic standards of diet, living conditions, leisure activities and amenities, which are socially perceived as "customary". This is the second approach to defining poverty, as relative deprivation.

Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or at least widely encouraged or approved in their community. Their resources are so seriously below those commanded by the average individual or family that they are in effect, excluded from ordinary living patterns, customs and activities. (Townsend, 1979) The strength of this approach to poverty is that it is seen as a process of encroaching deprivation in which people gradually slip out of the mainstream of social life, almost unnoticeably, without being the stereotype paupers in rags and tatters. The most fundamental challenge to this approach is the view that one cannot construct an objective list of deprivation indicators.

The specific approach and meaning we attach to poverty usually depends upon the underlying concept of poverty we have in our minds. The two approaches discussed above are from two very different conceptions of poverty. Applied to our society, they would come up with different stories and draw different conclusions about the extent of poverty. Policy implications of how to cope with poverty would also be fundamentally different. No one set of measures will give us a complete picture of poverty, let alone give an indication of the immeasurable factors of welfare such as happiness, security, togetherness, etc..

The emerging consensus seems to characterise poverty as the inability of individuals, households, or communities, to command sufficient resources to satisfy a socially acceptable minimum standard of living. Quantifying this, however, remains difficult, and a moot point among academics and policy analysts.

In the absence of a credible and comprehensive social indicator database, and also the absence of agreed upon norms and standards for measuring poverty, Census 96 has been used to create a baseline of information relating to poverty. To be understood properly, Poverty needs to be measured at a level of well-being (subjective indicators such as happiness) as well as the easily measured objective dimensions.

The Western Cape may be a "rich" province, but it is clearly visible that the riches are skewly distributed between the population groups in the Province. Less than 50% of Black households have an annual income in excess of R1 2000, while more than 50% of White households have an annual income in excess of R54000. More than 85% of Black households earn less than the poorest 25% of White households.

Poverty in the Western Cape also shows a very strong rural I urban bias. Close to 50% of rural households earn less than R12000 per annum. In the urban areas, almost 50% of households earn more than R30000 per annum.


According to the income line of R1 8000 per annum 41,5% of the households in the Western Cape live in poverty. The National average is 64,7%. Seven Magisterial Districts are worse off than the national average. They are Murraysburg (81,5%), Uniondale (74,3%), Prince Albert (72,4%), Laingsburg (71,7%), Calitzdorp (70,5%), Ladismith (68,5%), and Robertson (64,8%). With the exception of Robertson, these magisterial districts are clustered together in the Little and Great Karoo. Robertson, however, lies adjacent to this area. Bellville, Cape, Simons' Town and Somerset West are the magisterial districts with the fewest households living in poverty. It is of significance, however, that not one single magisterial district has less than 20% of its households living in poverty.

In real numbers, approximately 357 480 households in the Western Cape, are living in poverty. The greatest majority of them, 83 400, live in the Mitchell's Plain magisterial district. Wynberg magisterial district with 34 511 households, has the second most households living in poverty. In Murraysburg, 1060 out of a total of 1301 households, live in poverty.

The north west of the province along with the Karoo and Little Karoo stand out as the most vulnerable areas, with more than 60% of all households in those magisterial districts recording an annual income of less than Ri 8,000.

3. THE CONSTITUTION

Section 27(1) of the Constitution on health care, food, water and social security determines that:

(1) Everyone has the right to have access to:

(a) Health care services, including reproductive health care;
(b) Sufficient food and water; and
(c) Social security, including, if they are unable to support themselves and their dependants, appropriate social assistance.

(2) The State must take reasonable legislative and other measures, within it's available resources, to achieve the progressive realisation of each of these rights.


4. SOCIAL ASSISTANCE ACT, 1992

The Department of Social Services and Poverty Alleviation is responsible for the administration of the Social Assistance Act, 1992 (Act 59 of 1992) as amended by the Welfare Laws Amendment Act, 1997 (Act 106 of 1997). The Social Assistance Act makes provision for the following grant types:
· Grants for the Aged

Payable to older persons in terms of the legislation and is payable to women of 60 years and older and men of 65 years and older.

. War Veteran grants

Payment of grants to disabled or older persons who are 60 years and older and who fought in the First or Second World War or the Korean War.

· Grant for the disabled

Payment of grants to disabled persons who are older than 18 years and who are, owing to their physical or mental disability, unfit to obtain by virtue of any service, employment or profession, the means needed to enable them to provide for their maintenance.

. Grants-in-aid

Paid to persons, who are in receipt of old age, war veteran or disability grants who are unable to care for themselves in terms of the legislation.

Foster child grants

Payable in terms of legislation to legal foster parents for children under the age of 18 years.

· Care Dependency grants

Payable in terms of legislation to biological or foster parents in respect of children between the ages of 1 and 18 years who require and receive permanent home care due to their severe mental or physical disability.

. Child support grant

Payable to a primary caregiver of children under the age of 9 years. As from 1 April 2004 the age was increased to include children under the age of 11 years. From 1 April 2005 the age will be increased to include children under the age of 14 years.



5. SOCIAL SECURITY BUDGET

5.1 Budget for 2002/03 amounts to R2 459 147 000.

5.2 Budget for 2003/04 amounts to R3 210 120 000.

5.3 Monthly amount of i R280 m is paid to beneficiaries in the Western Cape.

5.4 473 599 beneficiaries received their monthly payments for May 2003 through the following pay methods:

· Banks (58 733)
· Post Office (Walvis Bay) (203)
· Institutions (CPOA) (574)
· ALLPAY (414089)

5.5 Budget for Social Security makes up 85.3% of the Provincial Welfare Budget. With the increases in Social Security expenditure, less funds are available for other welfare services.



6. TRANSFER PAYMENTS FOR MAY2003

GROWTH IN BENEFICIARY NUMBERS

Diagram not included

F
7
Grants
Co

U 2- ~HER&NT G?ANT _P[S AND BENFFICIARY r\UMBE~S

We presently have 473 599 beneficiaries In the Western Cape receiving various grants For May 2003 the information on the beneficiary numbers -was as follows
Diagram not included

9. DIFFERENT GRANT TYPES AND AMOUNTS

For May 2003 the information was as follows

Diagram not included

10. GRANT TYPES AMOUNTS, % GROWTH AND BUDGET
2.1.1~1.1.1.1 Grants for the aged

2.1.1.1.1.1.2 War Veteran's grants

11. SOCIAL SECURITY BUDGET PRESSURES

2 Grants for the aged and War Veterans

No real expenditure pressures are currently experienced with these two grant
types. Respective growth trend rates of 1% and -15% were being maintained over the past two financial years up to the present.

3 Disability grants

Using the Western Cape as an example, from 1999 to 2000 saw minimal growth in the beneficiary numbers for disability grants. On a monthly basis, almost the same rate of disability grants was cancelled on the mainframe system as those of new beneficiaries coming onto the system. This changed in the 2000/01 financial year to a significant growth rate of 4.3% in beneficiary numbers, possibly attributable to the increase in the unemployment rate.

During the last months of the 2001/02 financial year, especially from 1 December 2001, dramatic growth occurred. Reconciliated beneficiary numbers jumped from 91 556 in November 2001 to 96 391 in December 2001, rapidly rising to 101 777 in March 2002. This trend persisted upwards and in December 2002 there were 126 851 beneficiaries on the system.

Aggravating factors:

It is submitted that the sudden escalating growth trend in disability grants during the latter part of 2001\02 financial year, continuing into the 2002/03 financial year, was mainly due to:

· The amended Regulations to the Social Assistance Act that came into effect on 1 December 2001.
~ The new compulsory review system where all beneficiaries had to be notified 3 months in advance of any cancellation or lapsing of their grants.
~ The Socpen system that could not accommodate the new compulsory review system.
~ No programmatic notification of beneficiaries took place 3 months prior to the cancellation or lapsing of their grants and thus the grants could not be suspended.
~ With the deletion of the pension medical officer (or gatekeeper function) from the Social Assistance Act as from 1 December 2001, the awarding of the disability grant is based only on the initial assessment and classification of any medical practitioners in government employ.
· No national medical assessment criteria for the granting of disability grants are in place.
Temporary disability grant cases (28 677 in total) were programmatically changed to a permanent status and therefore remained on the Socpen system.


4 Care Dependency grants

Before March 1996 the Department of Justice in terms of the Mental Health Act paid Single Care grants for severe mentally handicapped children. Since March 1996 this grant was expanded to include severe physically handicapped children and was included as a grant type (Care Dependency grants) under the Social Assistance Act.

For the first couple of years a significant growth in beneficiary numbers was registered and this trend still continues. Although the growth in the beneficiary numbers for the care dependency grant was significant (24%) over the 2001102 financial year, it operates from a relative low base (average of 3 795 beneficiaries for the 2001/02 financial year). The implication, however, is that when the children, who receive the grants turn 18 years old, they automatically qualify for a disability grant, thus increasing the number of disability grant beneficiaries.

4.1 Child Support grant

National targets were set for Provinces to reach regarding the child support grant take-up level. Since the 2000101 financial year there has been a significant growth in the number of children in the Western Cape on the system if compared with the targets set by the National Department as indicated in the table:

12.SOCIAL RELIEF OF DISTRESS

The budget for Social Relief of Distress for the 2003/04 financial year is R3 864 000
· For disaster relief a maximum of R500 per household is paid.
· Social Relief for individuals is linked to the maximum grant amounts payable.


13.ACCELERATION OF THE TAKE-UP OF GRANTS

The National Minister for Social Development and the President called on the Provinces to ensure that everyone who is in need and qualifies for a grant is not deprived of it. Provinces are therefore compelled to embark on a marketing program to ensure that all eligible beneficiaries have access to grants as the payment of grants is deemed a key cornerstone of government's poverty alleviation policies. A call has been made by the National Department for 3


million children receiving CSG to be in payment by the end of the 2002/2003 financial year.

With the increase of the age for the child support grant an additional target for the increased ages was set. The target that was set for this Province for the 200312004 financial year is 48 456 children.


14. CHALLENGES IN THE SOCIAL SECURITY FIELD

4.1.1 Impact of HIV/AIDS

In recognition of the value and need for accurate information on the future population characteristics of the Western Cape, the Department of Social Services and Poverty Alleviation commissioned the Centre for Actuarial Research (CARE) at the University of Cape Town to develop a projection model for the Western Cape to 2025. Under the supervision of Professor Rob Dorrington, a component projection model has been developed. This model is based on the ASSA2OOO AIDS and Demographic Impact Model developed by the Actuarial Society of South Africa. The model produced for the Western Cape Province takes into account the likely impact of the HIV/AIDS epidemic and the Provinces' unique demographic features.

HIV/AIDS is one of the fastest growing diseases around the world, and more so in sub-Saharan Africa. The inaccessibility to treatment and medication for the many poor and disadvantaged HIV/AIDS sufferers further exacerbates this situation. Also, in South Africa the number of infections is on the rise and this has serious implications for the population trends of the country. HIV/AIDS is not only a health problem, but also social and economic one. It is therefore important to ascertain what the impact of increased infection rates will be within the next few years to assist us in determining probable mortality rates in South Africa and also to determine what the social and economic implications are within the country and the Western Cape Province.

It is important for provinces to know the rate of infection within their own boundaries as this is an indicator of where treatment and medical facilities are most needed, as well an indicator of the possible number of social security beneficiaries to be planned and provided for. It can provide valuable insight into where the prevalence of HIV/AIDS is highest and allow relevant stakeholders (i.e. government departments, NGO's, medical institutions) to provide and implement strategies to address the onslaught of the disease.

Projections indicate a steady increase in HIV infections between 1996 and 2001
with figures increasing from 35 734 in 1996 to 165 549 in 2001. By 2006 this
figure increases to 271 627 and by 2011 reaches 283 676.

There is an increase in the number of HIV-births between 1996 and 1999 from
91 918 to 95 620. Between 2000 and 2011 there is a decline in the number of
HIV-births from 95 340 to 89 428. Similarly there is also an increase in the

number of HIV-births from 501 in 1996 to 1569 in 2000. For the period between
2001 and 2011 there is a decline in the number of HIV-births from 1 469 to 1
121.There is thus a decline in the birth rate of the Western Cape from 2.2% in
1997 to 1.79% in 2011.

There is an increase in AIDS orphans from 502 in 1996 to 8 068 in 2001. By
2011 the figure increases to 98 122. Projections indicate that there is an
increase in non-AIDS orphans between 1996 and 2003 with the figure
increasing from 45 616 to 50 461. Thereafter a steady decline is projected from
50326 in 2004to45 129 in 2011.

The impact that HIV/AIDS will have on social assistance is difficult to determine. The Department can only budget for the impact of HIV/AIDS based on the above projected figures. The increase of HIV/AIDS will definitely lead to an increase for the demand for the following grant types:

Grants for the disabled;
Child support grants;
Foster child grants, and
Care dependency grants.

4 1.1.1.1.1.1.1 South African Social Security Agency Model

The National Cabinet at its meeting of 23 October 2002 approved the establishment of a national public entity for the management and delivery of social grants and the establishment of a transition committee to oversee the smooth implementation of the entity.

The overall responsibility of social grants will in the next three years shift to the National Minister of Social Development.

Provinces are thus not in the position to implement any new social security structures and procedures which will have a financial implication for the Province after the establishment of the Social Security Agency.

4.1.2 Demand on Resources

The current ratio established by the Department of Organisational Development for the Social Security personnel: beneficiaries are 1:1500. Over the last 2 financial years the Department experienced a growth in beneficiary numbers from a monthly average of 271 050 (2000101) to 454 493 currently while the permanent staff establishment remained unchanged at 285 personnel.

The National norms and standards document requires that a ratio of 1:800 be maintained in the Western Cape. This would mean an additional 283 staff members that would have to be appointed, placing further pressures on severely strained budget of the Department of Social Services. Approximately 200 additional contract workers were appointed to deal with the pressures at the District Offices.

Need for Uniformity

The rendering of social assistance is a concurrent function. In terms of this arrangement the National Department of Social Development is responsible for the establishment of national norms and standards. The establishment of a uniform set of social security norms and standards to improve the service delivery for beneficiaries is important. Whilst it is important to implement the norms and standards as soon as possible, cognisance should be taken of the fact that huge discrepancies exist with regard to resources and infrastructure between the various Provinces. If Provinces do not adhere to the norms and standards, more litigation cases with respect to poor service delivery could arise.

On 6 August 2001 the National Minister of Social Development announced the development of national norms and standards. Estimated costs indicate that R2 billion will be required for the implementation of the national norms and
standards.

Developmental Social Services

Given the current expenditures that are incurred for social assistance, a balance need to be found between the sustainability of the current social assistance system and not creating a dependency on state assistance.

Those who never will be re-integrated in the labour market they should be able to continue to receive their social assistance. Those who could be re-integrated into the labour market, those must be assisted for a short period and trained or retrained to enter the labour market or any other opportunity where the person can provide for him/herself. Those persons should be targeted in the other programs that are provided by government. Providing assistance to the less privileged should not only be seen as the responsibility of the Department of Social Services and Poverty Alleviation. The development of the person must occur in an integrated manner.

The Department has recently shifted its policy and approach from social assistance to social development. This is an appropriate and necessary shift in policy as the social assistance approach is not sustainable in the long run as it only encourages an onramp into the social assistance programme without deliberate off-ramps being implemented. This situation is unlikely to be tenable, as the South African Social Security programme is largely non-contributory, as this would put huge pressure on Government's resources. The challenge at the moment, though, are that there must be joint planning and integrated working practices between the Social Welfare and Social Security branches of the Department. To achieve this, integration is required.

Currently more and more people are added onto the Social Security programme with enormous financial implications without finding or placing people in alternative programmes that are sustainable.



4.1.3 Synergy with other Government Departments

Co-operation with the Department of Home Affairs with regard to identification documents.
Co-operation with the Department of Health for the assessment of disability grants.
Co-operation with Local Authorities for the availability of halls for the pay out of social grants as well as assistance during disasters.
Co-operation with the S A Police Services for additional security at pay out venues.

4.1.4 Qualification of refugees for Social Assistance

Legal action has been brought to the constitutional court for all refugees to qualify for social assistance. If approval is granted by the constitutional court it will have serious implications on the Social Security budget for the Province and the country. There are 29 717 refugees in the Western Cape of which there are 1 970 children under the age of 10 years.

15.GREATER ACCESS TO THE SOCIAL SECURITY SYSTEM

The ever-increasing beneficiary numbers require more counter services to increase from 170 to 200 for the current financial year.

· Since April 2001 there have been helpdesks at all of the i 300 pay points in the Western Cape.

· The Department aims to process all new applications within 25 business days except for disability grants where the norm for the processing of applications is 35 working days. The Department attempts to process all new HIV/AIDS cases within 5 working days.

The computerisation of Registries to counter the "lost file" syndrome.