PRETORIA — The Department of Social Development R4.8 billion underspend for the 2025/26 financial year has triggered severe criticism from civil rights organizations, who argue that rigid administrative barriers are unlawfully denying vital financial aid to millions of impoverished South Africans.
During a recent briefing with its parliamentary portfolio committee, the department revealed the significant shortfall within its R281.1 billion social grant budget. Officials attributed the unspent funds to enhanced verification protocols, reduced uptake of specific grants, and delayed payouts for the Social Relief of Distress (SRD) grants. This marks a notable increase from the R2.6 billion that remained unspent in the previous financial year.
However, civil society experts argue that the department’s explanation masks a deeper crisis of systemic exclusion.
Efficiency or Failure? The Human Cost of Verification
The Democratic Alliance (DA) recently highlighted the paradox of a nearly R5 billion underspend occurring simultaneously with rising national poverty levels, questioning whether the shortfall represents administrative efficiency or systemic failure.
Matshidiso Lencoasa, a budget analyst at the legal and human rights organization Section27, noted that while the country faces persistent poverty and an economy struggling to generate sufficient jobs, the government has a strict constitutional obligation to provide social protection.
Lencoasa pointed out a glaring discrepancy in the department’s narrative. While the government and National Treasury frame the unspent funds as a successful anti-fraud measure, Lencoasa emphasized that between 10% and 15% of successful SRD grant applicants are still not receiving their payments.
“We do welcome overcoming fraud measures, of course, but then we cannot overlook the fact that there are millions of people who qualify and need this social protection and are not receiving it,” Lencoasa stated, adding that many grants are also failing to keep pace with inflation.
The Digital Divide: 2 Million Approved Beneficiaries Left Unpaid
Siyanda Baduza, a Social Security researcher at the Institute of Economic Justice (IEJ), explained that the department’s reliance on digital bank verification processes is actively setting vulnerable recipients up to fail.
Baduza shared alarming statistics: while approximately 9 million people are approved for grants every month, only about 7 million actually receive their payouts. This leaves a staggering gap of 2 million approved beneficiaries who are locked out of the system.
The primary culprit, according to Baduza, is the online-only nature of the SRD grant application and verification process. Unlike the old framework, beneficiaries can no longer walk into a South African Social Security Agency (SASSA) office for in-person assistance.
“Most people don’t have phones. Most people don’t have their own bank accounts,” Baduza explained. She noted that if an applicant used someone else’s phone to apply, they often lose access to the specific phone number required to update their banking details online. “A lot of the challenges are being driven by the system itself and mainly because it’s digital and online only.”
Baduza stressed that the shift from in-person SASSA capacity to digital processes is driven primarily by cost-saving measures rather than a desire to improve service delivery, inevitably excluding those without smartphones or internet access.
Constitutional Concerns and Vulnerable Grant Shortfalls
The exclusionary nature of these digital systems has already been challenged in court. The Pretoria High Court recently ruled that the verification process was largely unconstitutional because of the way it systematically excluded eligible individuals from receiving their rightful support.
The financial shortfall is heavily concentrated in grants designated for the country’s most vulnerable demographics. The old age grant experienced an underspend of just under R800 million, the child support grant fell short by slightly over R500 million, and the disability grant underspent by R318 million. For many households, these grants serve as the sole source of income in an economy offering no alternative employment.
The Threat of Budget Cuts and Calls for Reinvestment
A major concern raised by both analysts is the standard response from National Treasury when major underspending occurs. Historically, the Treasury reduces the department’s budget allocation in the subsequent year, operating on the assumption that the financial need has decreased.
Both Lencoasa and Baduza vehemently opposed returning the R4.8 billion to the national fiscus to service high debt costs. Instead, they urge that the funds be reinvested directly into the social protection system.
Baduza provided a breakdown of how the R4.8 billion could be utilized to alleviate the crisis. The funds could increase the SRD grant by an additional R50 for every current recipient, fund an extra one billion beneficiaries, or be injected back into SASSA to improve operational efficiency and reduce queue times.
“The need is growing. The need is intensifying,” Baduza said, pointing to a severe cost-of-living crisis driven by rising fuel and food prices.
Strengthening the Case for a Basic Income Grant
Rather than weakening the argument for a Basic Income Grant (BIG), researchers argue that this underspend actually strengthens it. The inability to distribute existing funds fairly proves that the system requires urgent redesign, not reduction.
Lencoasa outlined several immediate, short-term interventions. She urged the government to halt its plans to appeal the High Court ruling to the Constitutional Court. Instead of spending energy on legal battles, Lencoasa argued that the department should redirect its focus toward making the grant systems fairer and rebuilding the infrastructure to ensure legitimate recipients are not excluded.
Ultimately, both experts maintain that the R4.8 billion must be paid out to the beneficiaries who are rightfully owed their SRD, child support, and disability grants, ensuring that the most marginalized South Africans are protected from a harsh and unforgiving economy.