Research finds no evidence of perverse incentives of social grants - 16 January 2007
16 January 2007
Media Statement
Research finds no evidence of perverse incentives of social grants
The provision of social assistance by the State does not promote teenage
pregnancies and other alleged perverse incentives, according to
preliminary findings of a research conducted by the Department of Social
Development.
The Department commissioned the research following anecdotal evidence
about alleged perverse incentives of social grants. The rapid increases
in the growth of social grants take-up rates during the period 2003/04
and 2004/05 raised concerns about the social grants systems’
sustainability and potential perverse incentives.
The four key areas that the research addressed were:
- the alleged increase in teenage pregnancies relating to the child
support grant;
- the possible fostering of children in the biological family
context in order to access the foster child grant;
- the believed reluctance to take medicines to control certain
ailments that can lead to permanent disability in order to access the
disability grant; and
- the supposed tendency of beneficiaries accessing grants not to
take part in the labour market and therefore creating a culture of
economic dependency.
The preliminary report presents the findings of the completed first two
phases, a literature review and a quantitative analysis of the data on
the social pensions system (Socpen).
Findings
Disability Grant
The quantitative analysis of the SOCPEN data did not provide any
evidence of people changing their behaviour in order to access the
Disability Grant (DG).
‘’The statistics provide little evidence of people changing their
circumstances to obtain the disability grant. Reports of such incidents
are so far anecdotal and unverifiable. The increase in disability grant
take-up rates often have more to do with people’s inability to enter the
labour market and the scarcity of employment opportunities. The alleged
behavioural changes will be further probed through a separate
qualitative investigation,’’ said the Minister of Social Development, Dr
Zola Skweyiya.
Research indicated that in some instances, the DG is used as a poverty
alleviation grant rather than a compensatory grant for people with
temporary or permanent disabilities. There are indications that even if
people are unsuccessful on first application, they return with new
ailments until such time as their applications are approved.
The research also confirmed the increase in the number of women
accessing the DG. Just over half of the women receiving the DG are also
accessing grants for children.
The investigation has uncovered policy and administrative weaknesses in
the provision of the DG, and corrective measures have since been
introduced. Weaknesses include that the Temporary Disability Grant (TDG)
is not, as a rule terminated, therefore beneficiaries tend to stay on
the system for long periods of time.
Remedial action is being undertaken by the Department. For example, the
new definition of disability and a new disability assessment tool were
piloted in three provinces. Systems to ensure regular reviews of
temporary disability grants have also been implemented.
CHILD SUPPORT GRANT
From the analysis of the SOCPEN data, no link could be established
between the availability of the CSG and the fertility of teenagers.
Dr Skweyiya explained: ‘’The quantitative analysis revealed that there
had been a huge growth in the number of CSG beneficiaries in recent
years. However, if a comparison is made between the numbers of teenagers
receiving the CSG with the incidence of teenage births in the national
population, the quantitative analysis suggests that the take-up rate of
the CSG by teenage mothers remains low’’.
Teenagers (younger than 20 years) represent 5% of all CSG recipients
registered at October 2005. These teenagers claiming the CSG were
considerably lower (13% lower) than the proportion of teenage mothers in
the South African population (mothers younger than 30 years). The
majority of caregivers only receive one CSG. In addition, the allegation
of “child farming’’ (alleged practice of registering many children to
access the grant) was ruled out.
‘’When the CSG was introduced for younger children, one of the main
reasons was to provide financial support during the first three years of
a child’s life, when good nutrition has the most significant effect on
the development of a child. However, the majority (53%) of CSG
recipients only apply for the CSG when their children are older. Reasons
for the relatively low uptake probably include the fact that caregivers
struggle to get the required documentation and do not always have the
necessary knowledge about the CSG,’’ said Dr Skweyiya.
Foster CHILD Grant
There is no conclusive evidence that the foster care grant is growing as
a result of the existence of perverse incentives. ‘’However, evidence
from the research shows that although the foster care grant was not
designed as additional support, in the absence of income support for
kinship arrangements and adoption, the cost of providing the foster care
grant will continue grow,’’ said Dr Skweyiya.
The research has revealed that informal fostering is a well-established
practice in certain sections of the South African population. It further
suggested that foster care is a valuable form of alternative care for
children whose parents are deceased or unable to care for them.
The quantitative analysis revealed that in the majority of cases, the
FCG is paid to children who have lost one or both parents, and that the
majority of foster parents are related to the foster children. In 41% of
cases, the foster parent was the grandmother, in 30% of the cases the
foster parent was the aunt, and in 12% of cases other relatives were the
foster parents. Only in 9% of the cases were the foster parents not
related to the foster child. Nearly two out of three foster parents
receive more than one grant type. Many are also recipients of the Older
Persons Grant, the Disability Grant and or the CSG.
‘’Because the majority of foster children are orphans, their placements
are expected to be long-term. However, the majority of orphans are not
supported through receipt of the FCG, and the FCG case loads could rise
substantially if more families took this course of action in the event
of parents dying’’, warned Dr Skweyiya.
The research findings, including the outstanding qualitative research
aspects, will inform necessary policy adaptations and improvements in
the grants administration system. For the full report, visit
www.socdev.gov.za.
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Enquiries: Lakela Kaunda on 082 782 2575.
Issued by the Department of Social Development
Pretoria
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