The Role of Informal Work in the Social Grant System in South Africa

South Africa’s social grant system has helped reduce poverty and improve the lives of millions of South Africans. However, a recent study reveals that grant recipients still need to work on meeting their basic needs.

The Role of Informal Work

The study found that 31% of grant recipients engage in informal work to supplement their income. This allows them to “grow” their grants, invest in livelihood activities, and reduce their reliance on grant monies. Informal work includes informal trading, self-employment, renting accommodation, and traditional healing.

Limitations of the Social Grant System

Despite the success of the social grant system, more than grant monies are needed to meet the needs of beneficiaries. They often use social networks for guidance, advice, and financial assistance. Moreover, they face significant barriers in promoting livelihoods, reducing poverty, and improving their well-being.

Recommendations for Improvement

The study recommends a multi-pronged poverty reduction strategy combining grants and livelihood support services. These services should include access to capital, credit, small loans, knowledge and skills development, mentoring, and coaching. The government should also target beneficiaries for livelihood support, such as small-scale farming and entrepreneurship programs.

Informal work is a critical livelihood strategy for grant beneficiaries in South Africa. To achieve national poverty reduction objectives, it is essential to recognize the role of everyday work and complement social grants with livelihood support services. The government, NGOs, development agencies, and CSI programs should scale up livelihood support to provide grant beneficiaries with the resources they need to break the cycle of poverty. Further research and experimental intervention research are also essential to inform the design of livelihood support policies and strategies.