1. PRESENTATION TO THE SELECT COMMITTEE ON FINANCE 18 OCTOBER 2005
Department of Social Development Public Hearings on Provincial Budgets & Expenditure Review 2001/ /08
PRESENTATION TO THE SELECT COMMITTEE ON FINANCE
18 OCTOBER 2005

2. CONTENT Overview of provincial expenditure
Social development services
Social Grants
Measures to sustain social grants expenditure
Policy & other legislative developments
Conditional grants expenditure
Conclusion

3. Introduction
Social development expenditure has grown by an annual average rate of 28,8% from 2001/02 to 2004/05
Social assistance consumes the bulk of provincial expenditure due to high poverty levels in the country
Social grants have proved to be the most effective poverty alleviation strategy of government
Other social development services, including the most needed welfare services to vulnerable groups have not been adequately funded over the past years as a consequence thereof.

4. Introduction
Rapid growth in social grants beneficiaries has a huge impact on provincial budgets and is driven by:
Extension of the child support grant from 7yr olds to 14 yr olds in the last 3 years
Sharp increases in disability and foster care grants
Increased coverage for all grant types
Total number of beneficiaries increased from 3.6m in April 2001 to 9.4m in April 2005

5. Overview of Provincial Expenditure- Soc Dev Services
Spending on other social development services has been growing at annual average rate of 16,4% (R2,3b 2001/02 to R3,6b in 2004/05)
Historically social welfare services have not been adequately funded due to:
Pressure exerted by growth in social assistance expenditure
Lack of costed norms and standards

6. Overview of Provincial Expenditure- Soc Dev Services
The shifting of the social assistance function will allow provinces to focus more on other social development services
The new service delivery model
Defines the nature & scope of welfare services
Defines the norms & standards
Determines the policy for financial awards to service providers, including NGOs
Ensures integration of services with other government departments

7. Overview of Provincial Expenditure- Social Assistance
Amount of R52 billion allocated for social grant transfers in 2005/06 (excluding Admin)
Provinces spent an amount of R25,139 billion between April 2005 and September 2005
Overall spending of 48,32% of the total allocated budget
Largest spending in Western Cape, Limpopo, KwaZulu Natal and Mpumalanga
Largest spending in foster care grant and the extension of the child support grant

8. Overview of Provincial Expenditure- Old Age Grant
Amount of R20,038 billion allocated for 2005/06
Provinces spent an amount of R9,9 billion between April 2005 and September 2005
actual spending in all provinces stabilised due to steady growth in beneficiary numbers
Coverage of intended beneficiaries generally high
Indemnity had impact in stabilising growth
Coverage for old age very high & should stabilise over the MTEF

9. Overview of Provincial Expenditure- Disability Grant
Overall consolidated spending of R6,6 billion against allocated budget of R14,4 billion in 2005/06
Possible projected savings due to decrease in beneficiary numbers for temporary disability grant
All provinces engaged in process of lapsing temporary disability grants
Implementation of uniform processes and procedures for reviewing temporary disability grants
Project saving in all provinces, except KZN due to large number of cases to be lapsed
Various initiatives have led to more measured take up rates & future growth should stabilise

10. Overview of Provincial Expenditure- Foster Care Grant
Amount of R2,045 billion allocated for 2005/06
Overall consolidated spending of R1,022 billion between April 2005 and September 2005
Rapid increase in spending on this grant due to strong growth in beneficiary numbers - especially in Mpumalanga, Eastern Cape, Free State, Limpopo and North West
Strong growth in beneficiary numbers due to:
Backlogs in processing the grant
Impact of HIV/AIDS
Awareness of the grant

11. Overview of Provincial Expenditure- CS Grant
Amount of R14,467 billion allocated for 2005/06
Overall consolidated spending of R6,997 billion between April 2005 and September 2005
Spending increasing on the extension of the child support grant (7-14 yrs)
Growth on child support grant for children between 0-6 yrs decreasing due to:
Data clean up initiatives
Impact of indemnity – Over 50% of applications for CSG
Final yr for children under 14 yrs & growth over the MTEF should be more predictable

12. Measures to sustain social assistance expenditure
Improvement of administration
Establishment of the Agency
SOCPEN enhancements
Efficiency gains resulting from Agency improvement initiatives
Implementation of fraud strategy
Impact of indemnity
Data interrogation

13. Measures to sustain social assistance expenditure
Disability management
New definition of disability & rollout of the assessment tool
Rollout of the Management Information System (MIS)
Lapsing of temporary disabilities

14. Pressures on future provincial expenditure
Promulgation of legislation currently debated in Parliament (Children’s, Older Person’s & Child Justice Bills)
Implementation on new service delivery model for social dev services
Possible extension of social benefit to refugees – pending litigation

15. CONDITIONAL GRANTS FOR MTEF

16. 2005/06 FINANCIAL YEAR
The following Conditional Grant Programmes are currently managed by the Department in this financial year:
HIV and AIDS Programme (National Integrated Plan for Children Infected and Affected by HIV/AIDS)
Integrated Social Development Grant
Social Assistance Transfers Grant
Social Assistance Administration Grant

17. ALLOCATIONS 2005/06 2006/07 2007/08 R thousand Social Development
55,931,759
61,204,563
66,138,889
(a) Integrated Social Development Services
388,000
411,280
431,844
(b) HIV and Aids (Community-Based Care)
138,391
138,854
142,797
(c) Administration of Social Assistance
3,382,055
3,584,320
3,734,190
(d) Social Assistance Grants
52,023,313
57,070,109
61,830,058

18. HIV & AIDS GRANT Purpose:
Provide social welfare services to orphans and vulnerable children who are infected and affected by HIV and Aids, within family and community context, in partnership with non profit making organizations (NGOs, CBOs and other community organizations);
Develop and support institutional structures and professionals, community workers and child and youth care workers through targeted training programmes in order to ensure effective delivery of services

19. HIV & AIDS GRANT
This grant has been in existence since 2001/2002 financial year.
688 Home/Community Based Care Centres are currently being supported nationally
More than orphans & vulnerable children have been identified in various parts of the country and are receiving appropriate care and support.
More than families were supported

20. Allocations 2001/02 –2003/04 PROVINCE Allocation 2001/02 R’000 2002/03
2004/05
TOTAL
Eastern Cape
1 500
4 798
6 658
7 089
20 045
Free State
6 650
9 228
9 825
27 203
Gauteng
1 000
6 983
9 690
10 315
27 988
KwaZulu-Natal
8 644
11 996
12 773
34 913
Limpopo
3 135
4 353
4 634
13 622
Mpumalanga
7 077
9 821
10 456
28 854
Northern Cape
2 660
3 691
3 930
11 781
North West
5 463
7 580
8 070
22 613
Western Cape
2 090
2 900
3 088
9 078
12 500
47 500
65 917
70 180

21. Allocations 2005/06 –2007/08 PROVINCE Allocation 2005/06 R’000 2006/08
TOTAL
Eastern Cape
13 979
14 026
14 424
42 429
Free State
19 374
19 439
19 991
58 804
Gauteng
20 341
20 409
20 988
61 738
KwaZulu-Natal
25 187
25 272
25 990
76 449
Limpopo
9 138
9 168
9 429
27 735
Mpumalanga
20 619
20 688
21 275
62 582
Northern Cape
7 750
7 776
7 997
23 523
North West
15 914
15 967
16 420
48 301
Western Cape
6 089
6 109
6 283
18 481

22. INTEGRATED SOCIAL DEVELOPMENT GRANT (ISDG)
PURPOSE:
To enable the provinces to support and provide appropriate social welfare services and development interventions, and
for immediate and appropriate short-term relief to vulnerable individuals and households who are not eligible and not receiving any form of assistance in terms of the Social Assistance Act, 1992

23. ISDG- ALLOCATION: 2002/03 –2007/08 Province 2003/04 2004/05 2005/06
2006/07
2007/08
Allocation
allocation
R'000
Eastern Cape
94,133
99,781
104,770
Free State
37,334
39,574
41,553
Gauteng
27,904
29,578
31,057
Kwazulu-Natal
68,185
72,276
75,890
Limpopo
61,146
64,815
68,055
Mpumalanga
27,651
29,310
30,776
Northern Cape
9,998
10,598
11,128
North West
41,615
44,112
46,317
Western Cape
20,034
21,236
22,298
Total
388,000
411,280
431,844

24. INTEGRATED SOCIAL DEVELOPMENT GRANT
This grant was previously known as the food Emergency Grant focusing on food distribution
Objective since changed to provide wider social welfare services and development interventions
Previous grant proved to be unsustainable and complex to manage

25. CONCLUSION
Social assistance continues to put pressure on provincial budgets despite initiatives to curb expenditure increases, mainly due to new policy developments
The shifting of the function will relieve such pressure from provinces and more attention will be given to other social dev services
The new social development services delivery model will ensure proper budgeting & increased allocation for other social services over the medium term

26. THANK YOU