Child Poverty in South Africa
This is one of my paper for my courses. I spent a lot of efforts into doing research about the Child Support Grant in South Africa. I grew so much in developing the techniques and skills in writing policy memo. Even though child welfare is not one of my major focus in my career development, I'm delighted to see how it turns out. Enjoy reading!
Child poverty in South Africa is more pervasive than for the population as a whole. Children constitute 37% of the total population, and 58% of them live below the national poverty line. Three primary factors have led to child poverty in South Africa: racial disparities, high unemployment rate, and the HIV/AIDS epidemic.
The Child Support Grant was introduced in 1998 to alleviate child poverty. Due to the means test, almost 25% of children who would be eligible for the grant are being excluded (SASSA & UNICEF, 2013b). Key barriers to receiving benefits include high levels of confusion regarding the means test and eligibility criterion, complicated application processes, and problems with retrieving the needed documents (DSD, SASSA & UNICEF 2012; Zembe-Mkabile et al., 2012). Children are the future of South Africa and their benefits should be prioritized. A rights-based universal Child Support Grant is proposed, wherein all South African children under 18 would be eligible for the benefits regardless of their household income. A universal Child Support Grant is economically, politically, and administratively feasible.
Child Poverty in South Africa
In mid-2010, South Africa had a total population of 50 million, of whom 18.5 million were children (i.e., those under 18 years old) (Meintjes et al., 2010). Although children constitute 37% of the total population, nearly 12 million children were considered to be poor (UNICEF, 2010). Child poverty (65.5%) remains more pervasive than in the population as a whole (52.9%) and poverty among adults (45.2%).
Poverty has created barriers for South African children in terms of access to nutritious food, education, and even causes child mortality. 21.7% of children lived in households where some level of child hunger was reported; six out of ten non-poor children started school by the age of 6, as compared with 53.8% of poor children (SASSA & UNICEF, 2013a).
Racial disparities, high unemployment rates, and the prevalence of HIV/AIDS are three major causes of child poverty in South Africa. South Africa stands out as a country with one of the largest racial divisions in the world due to European colonization and the Apartheid regime that followed independence, which officially ended in 1994 (Gradin, 2011). Racial dimensions persist within child poverty, and poverty is the highest among African and Colored children (UNICEF, 2010). 84.8% of Black African children were in poverty, while only 5.3% of White children lived in poverty between 2008 and 2009 (SASSA &UNICEF, 2013a).
Child poverty in South Africa is highly associated with household unemployment. In 2011, over 65 million children in South Africa (35%) lived in households where no adults were employed. According to Meintjes and Hall (2013), 40% of African children do not live with an employed adult, whereas only 3% of white children do not live with an employed adult. Living with employed adults is significant to a child’s well-being, as it can provide financial stability and security to children. Additionally, children are more likely to have access to education and health care.
HIV/AIDS prevalence is another factor contributing to child poverty in South Africa. According to UNICEF (2010), South Africa has the highest incidence proportion of HIV/AIDS in the world. Even though South Africa has less than 1% of the world’s population, South Africa is home to 17% of all people living with HIV globally. Many adults have died due to the effects of HIV/AIDS, leaving many children without any primary caregivers. In 2011, roughly 3.6 million children were orphaned, which is approximately 1 in 5 children. Parental deaths also result in household economic shock (Kua & Operario, 2010).
The Child Support Grant (CSG) was introduced in 1998 and is an important tool in alleviating child poverty in South Africa, reaching 10 million children each month (DSD, SASSA & UNICEF, 2012). The CSG is a cash transfer paid to the caregiver of a child under 18 years old who qualifies based on a means test. In 2011, the CSG reached the largest number of beneficiaries (68%) compared to other social grants in South Africa (DSD, SASSA & UNICEF, 2012). The grant is a publicly funded social assistance program, supervised by the Department of Social Development, accounting for 3.5% of GDP.
Criteria to access the CSG
Three sets of criteria determine eligibility for the CSG: an income-based means test, age thresholds (children have to be under 18 years old), and citizenship. The means test evaluates the income of the CSG applicant (i.e., the child’s biological parent or primary caregiver), the income of their spouse or partner, and the income of the beneficiary (i.e., the dependent child). In order for an applicant to be eligible, the sums of these three incomes must fall below a threshold which is adjusted annually. In 2011, the means test threshold for the CSG was set at R2, 500 (US dollars 242.5) per month for a single caregiver, and R5, 000 (US dollars 485) per month for a couple.
Children are being excluded
Even though the CSG has helped many children out of poverty (DSD, SASSA & UNICEF, 2012), a total of 2.3 million children are being excluded (Zembe-Mkabile, 2012). The take-up rate peak for children was ages 7 to 10 years old, with the enrollment rate lowest among infants and adolescents (DSD, SASSA & UNICEF, 2012). It is troubling that children who are at the greatest risk of exclusion from the program are also the children often identified as the most vulnerable. Research suggested that early receipt of the grant is associated with improved health care and better school performance (DSD, SASSA &UNICEF, 2012).
Such a gap was created by three factors: the means test, confusion and misunderstanding among applicants about the income threshold, and difficulties in obtaining significant legal documents.
The CSG was designed as means-tested benefit targeting the poor. However, targeting the most vulnerable does not necessarily translate into effectively reaching this population. The means test of the Child Support Grant created one major exclusion group — the youngest caregivers — because teenage mothers cannot simultaneously be a caregiver applicant (on behalf on her own children) and a beneficiary (in terms of her own mother’s application). In addition, the CSG eligibility criteria also limit the benefits to applicants (e.g., the primary caregivers of children) who are citizens or permanent residents of South Africa, regardless of the status of the beneficiary child. Since caregivers apply on behalf of the child, it is the status of the caregiver, not the child or spouse that determines eligibility — another major exclusion error.
Exclusion from the CSG is highly impacted by racial disparity (SASSA & UNICEF, 2013b). Only 4% of eligible white children, compared to 43% Indian, 63% Colored, and 78% Black children, receive the CSG. However, the number of excluded white children is small (94,500), compared to the almost 2 million excluded Black children.
2. Confusion and misunderstanding about the income threshold
Research (UNICEF, DSD & UNICEF, 2012) found that more than one out of 10 poor eligible caregivers who did not apply for the grant believed that their income was too high, even though their incomes actually fell below the threshold. For instance, employed caregivers frequently believed that any employment rules out eligibility for the grant, without understanding that the current income threshold enables millions of workers in South Africa to be eligible for the grant.
3. Problems with documents
The inability to acquire the required legal documents is the number one reason why eligible applicants not to apply for the grant. Likewise, problems with obtaining the correct documentation were the number one reason why applicants for the CSG were delayed. The core documents required for the CSG application include parents’ ID, child’s birth certificate, clinic (immunization or “Road to Health”) card, marriage certificate, and proof of address.
A rights-based universal Child Support Grant can be more cost effective reaching all South African children under age of 18 regardless of their household income. The government spends a lot of money to determine whether a household falls below the income threshold. A universal Child Support Grant can also mitigate the confusing issues of eligibility criteria; reduce inequality in terms of acquiring the grant due to applicants’ educational background and race; and reduce the stigma associated with receiving benefits. South African government can obtain funding for the universal Child Support Grant by reallocating public expenditure and increasing tax revenue.
Universal Benefits vs. Means-tested Benefits
Compared to universal benefits, means-tested benefits can come with some inefficiency and are more costly. In order to apply the means-tested benefits, the government has to determine an indicator to measure child poverty. However, governments often have inaccurate information about the true welfare level of households (Notten et al., 2008). Moreover, child poverty is a multi-dimensional concept and there are various ways to measure each dimension (Notten et al., 2008). As a result, nearly 25% of the eligible children are being excluded (SSASA & UNICEF, 2013b). Additionally, screenings costs can be high to implement means-tested benefits. Many money and resources have to be put into determine whether a household is eligible, and the application process is very time-consuming due to the complex paper work (SASSA & UNICEF, 2013b). When screening costs are high and there are inefficiencies caused by exclusion errors, universal benefits become more attractive as a benefit allocation mechanism (Notten et al., 2008).
Children should be Prioritized
According to UNICEF (2012), investing in children and supporting children’s development can offer critical opportunities that will yield lasting returns. Because childhood is a crucial time period in terms of physical, cognitive, and psychological growth, investing in children can ensure their well-being and help them grow into their full potential. With South Africa’s high rate of parental death due to the HIV/AIDS epidemic, children are the future. On the other hand, losses due to malnutrition or missed schooling can be difficult to recover from in terms of adult productivity and earnings (UNICEF, 2012). For example, the impact of a child in South Africa receiving the CSG can translate into gains in monthly wages of 5-7 percent. By expanding the current means-tested benefits into a universal benefit, many more children can be reached, delivering higher return rates.
Offering social support for children’s development can last beyond childhood, increase adult productivity, and contribute to breaking the intergenerational cycle of poverty. UNICEF supports investing in children because investing in children and offer social protection can result in positive immediate and long-term economic and social returns (UNICEF, 2012). Social protection can also have positive impacts on the economic activities of homes with potential multiplier effects (UNICEF, 2012).
UNICEF (2012) argued that social protection is affordable even in budget-constrained settings and needs to be seen as an investment in human capital accumulation and household resilience, as well as risk management strategy. Allocating funds within the existing national budget and raising more tax revenue are two major principles in financing increased expenditure on cash transfers (UNICEF 2012, Arnold et al., 2011). Affordability of financing social benefits programs is about where and how resources should be spent to maximize benefits and what long-term financing strategies are feasible for progressive expansions of coverage (UNICEF, 2012). Eventually, affordability depends on a society’s willingness to finance social policies to support population.
Re-allocating current expenditures can be an efficient option, which includes assessing ongoing dulcet allocation through public expenditure, and replacing high-cost, low-impact investment and those with larger socio-economic impacts, eliminating spending inefficiencies and/or reducing corruption (UNICEF, 2012). Successful examples include Indonesia and Mozambique, which scaled down regressive fuel subsidies to finance social protection efforts.
Altering tax rates to increase tax revenue is also an efficient option in financing universal benefits for South African children. According to UNICEF (2012), taxes are one of the key sources of domestic revenue available to governments, so growing tax revenues, expanding the tax base, and increasing tax compliance to mobilize possible resources for social protection without necessarily sacrificing other spending priorities. For example, Holmqvist (2010, cited in UNICEF, 2012) found that raising tax revenue by just one percentage point - from 13 to 14 percent of GDP in Burkina Faso would be enough to finance a universal pension for those aged 65 and over.
The South African government, in its Constitution, has already entered into a social contract with its people to provide social assistance and to protect children. As recognized by the 2007 Convention on the Rights of the Child, children have a right to social security, including social insurance, and to an adequate standard of living (UNICEF, 2007). A universal Child Support Grant can guarantee that no child is left behind, and the rights of children are met. In fact, the South African government has already commissioned a feasibility study of a universal Child Support Grant (Samson, 2009).
According to UNICEF (2012), cash transfer programs are easy to administer and are more cost-effective. South Africa has already developed a means-tested system under the Department of Social Development. Changing from the means-tested benefits to universal benefits can actually help the government save money in paperwork and manpower to determine whether applicants fall under the income thresholds. The application process can also be simplified and more efficient.
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