Will 2025 SASSA grant increases be reversed?

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The conundrum of 2025 SASSA grant increases is quickly moving from a social to political issue. And civil society is worried the country’s neediest South African Social Security Agency beneficiaries are going to be left in the lurch. This follows Finance Minister Enoch Godongwana’s revised 2025 Budget Speech, which he delivered this past week after February’s unprecedented postponement.

Central to his address were above-inflation (ranging from 5.7 to 5.9%) 2025 SASSA grant increases. ‘Core’ grants such as Older Persons (60-74 yo) and Disability, will now payout R2 310. And Old Age (75 yo) and War Veterans will receive R2 330. Higher-than-anticipated 2025 SASSA grant increases are meant to cushion the blow of two consecutive 0.5% VAT increases over two years. Nevertheless, the whole discussion could be moot if the ANC doesn’t find enough political support to pass its 2025 Budget, reports BusinessTech.

2025 SASSA GRANT INCREASES

The uncertainty the postponed 2025 Budget Speech has created looks set to continue till May. Image: File

Godongwana’s 1-percentage-point VAT increase over two years will bring VAT to 16% by 2026. This is lower than the 2-percentage-point hike initially proposed in February. However, it’s still a painful tax measure for needy South Africans living near the poverty line. As a result, the VAT hike and other tax proposals face significant opposition from political parties within the Government of National Unity (GNU).

The biggest threat to vote it down comes from the Democratic Alliance (DA). Specifically, the DA says it rejects the proposed budget and will not vote in support of it. This is in keeping with its anti-tax-hike stance. Moreover, the party says it will not support a budget that puts any more pressure on taxpayers. “This budget does not have majority support as tabled in parliament, because it is not a growth and job budget,” says John Steenhuisen (DA).

WASTEFUL SPENDING AND CORRUPTION

If VAT hikes are done away with, so, too, will above-inflation 2025 SASSA grant increases, surely? Image: File

Government says it needs money to support critical spending on infrastructure, while opponents have hit back, saying government needs to cut wasteful spending and reduce losses to corruption. However, for the 2025 Budget to be passed, it comes down to a very important numbers game within the National Assembly. ANC needs 201 votes. However, the DA and FF+ are against the tax hike. This will remove 93 votes out of 287 GNU seats.

As a result, Godongwana has stated that if the parties within GNU do not support the budget, he will court parties outside the coalition for the 201 votes required. However, MK and EFF have also both given a hard no to VAT hikes. Combined, the DA, EFF, MK, IFP and FF+ have enough seats (207) to block the 2025 budget proposal outright.

WAITING AND WORRYING

Balancing a tricky budget within the political realm of a GNU could see the budget confirmation go all the way to May 2025. Image: File

Unfortunately, there’s no way to tell if 2025 SASSA grant increases will need to be reversed later in the year. All we know for sure is that ‘core’ SASSA grants will still benefit from the above-inflation increase from April 2025. Even though SASSA has pegged them lower than initially stipulated by the National Treasury. This is sure to leave SASSA beneficiaries with months of anxiety and uncertainty as we await the outcome of the parliamentary due process.

The matter of reversing 2025 SASSA grant increases – and the budget in general – will come to a head only in May. This is when lawmakers must decide whether to pass the revenue and expenditure plan after heavy scrutiny and debate by all government entities. The consensus from economists is that: “We can’t be complacent about having a budget, because we don’t yet have a budget for 2025.” Let’s just hope it’s not the country’s elderly and needy who are left in the lurch if this turns into a political vendetta tied up in the courts …