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Sanlam Employee Benefits 2008 Budget Overview in respect of the employee benefits

21 February 2008 Sanlam Employee Benefits

The following proposals have relevance for the retirement industry:

SOCIAL SECURITY REFORMS

The Minister advised that an interdepartmental task team has made progress over the past year in developing the proposed framework for a contributory social security system to complement the social assistance grants programmes, and regulatory overhaul of the retirement fund industry is in progress. These are complex reforms that will give practical content to the Government’s social solidarity commitment over the long term. This year will see the start of an engagement within NEDLAC on implementation challenges.

Drawing on the work of the interdepartmental team on social security reform, the Government will begin to address the difficulties of the present means test. The qualifying household income threshold for the child support grant will be raised and the means test formula that applies to the old age grant and disability grant will be revised, contributing both to easier administration of these restrictions and broader access of the poor to income support. Details of these reforms will be contained in amendments to the Social Assistance Act and its regulations, which will be tabled by the Minister of Social Development.

It is proposed that the qualifying age for men for the old age pension should be reduced from 65 to 63 this year, to 61 in 2009 and to 60 by 2010. Beyond 2010/11 an increase in the qualifying age will be considered.

The child support grant will be extended to include children up to their 15th birthday with effect from January 2009.

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