The National Treasury announced on Wednesday that the Social Relief of Distress (SRD) grant of R370 will be extended in its current format for another year while a replacement for this grant is being considered.
The National Treasury stated that the Social Relief of Distress grant will be extended for another year while work continues on integration with measures to revitalize the labor market, develop skills, and support businesses. Recipients will be linked to employment, training, and business opportunities through the MzansiXchange data exchange platform, which allows verification of recipients across various government departments, according to the Medium-Term Budget Policy Statement for 2026 (MTBPS).
The continuation of SRD contradicts the promise of Finance Minister Enoch Godongwana, who stated that the modalities and format of the so-called Living Subsistence Grant, mentioned by President Cyril Ramaphosa, would be outlined in his Medium-Term Budget Policy Statement.
New Living Subsistence Grant
Ramaphosa previously stated in his Address on the State of the Nation that the SRD grant played a crucial role in mitigating widespread poverty. At the time, he noted: 'This year we will revamp the grant to more effectively support livelihoods, skills development, employment opportunities, and productive activity.'
In February, Godongwana announced that discussions were underway regarding a new Living Subsistence Grant to replace SRD. SRD, introduced during the Covid-19 pandemic in March 2020, became a lifeline for millions of South Africans facing food shortages.
In February, Godongwana allocated an additional R36.4 billion to extend SRD payments until March 31, 2027, at the current rate of R370 per month per recipient. This amount exceeds the R34.2 billion allocated in the 2025/26 financial year.
Meanwhile, the National Treasury listed SRD as one of three expenditure risks facing the government, alongside the Student Financial Aid Scheme and employee compensation. The MTBPS states: 'Litigation concerning regulations governing the Social Relief of Distress grant represents a significant expenditure risk.'
Lawsuit could increase SRD costs
The government has lodged an appeal in the Supreme Court of Appeal against a High Court ruling from January of this year, which invalidated the means-testing criteria, grant amount, income definition, and income verification mechanisms.
The National Treasury warned that the fiscal impact would depend on the outcome of the legal proceedings and policy responses. It was cautioned that the number of recipients and the total cost of SRD could increase significantly if the High Court's decision is upheld. Preliminary estimates suggest this could add three million potential recipients and increase the annual funding requirement from approximately R36 billion to R74 billion, as indicated in the MTBPS.