2009 Budget Speech - Old Mutual comments on changes to social assistance grants

Highlights from Budget Speech:

* Poverty reduction : R13bn for social assistance grants and their administration
* Extension of child support grant to 15 takes effect this year – consideration is being given, subject to affordability, to the extension of this grant to the age of 18
* Reduction in the eligible age for men to 60 for the old age grant is in progress
* With effect from April, the maximum values of the old age, disability and care dependency grants will rise by R50 to R1010 per month

Old Mutual comment:

At present, social assistance programmes reach 12.4 million people. The changes to the various qualifying criteria announced by the Minister today are projected to lead to social grants reaching 13.4 million people by April 2009, contributing significantly to reducing poverty in South Africa.

Old Mutual welcomes the announcement that the maximum values of the old age, disability and care dependency grants will rise by R50 to R1010 per month in April. We are also encouraged by the Minister's comment that raising the means test thresholds is an important part of the social security reform agenda. The means test creates a disincentive to save for lower paid employees, while increasing the cost of administering the grant.

We continue to encourage those in employment to understand the importance of saving sufficiently for retirement.