Old-age Pensions

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Pensions

The South African retirement system has evolved exclusively from a fully privatised arrangement based on occupational and individual forms of cover and is a very specific case. For instance, the absence of a mandatory tier of contributions makes it unique from an international perspective. Another unusual characteristic is the absence of state provision (or delivery) of an earnings-related retirement. Moreover, the system is fragmented with close to 14,000 retirement funds.

Old Persons Grant

The Old Persons Grant was created to assist elderly women and men, and currently covers almost 2.6 million people. Since 2008, the age of retirement for men and women has been set to 60 years of age, but this equalization will be progressively phased in. Consequently, it is expected that by 2010-11, everyone aged 60 or older, who satisfies income criteria for the social pension, will have equal access to the grant benefits. The programme provides an annual grant of ZAR 1,140 (ZAR 1,160 for the over 75). Compared to other programmes this grant is considerably high; thus, making it the biggest driver of cash transfer expenditure. The social pension is however means-tested and tax financed, and the annual cost equates to about 1.4 per cent of GDP – representing over 38 per cent of the Department of Social Development’s total cash transfer expenditure.

War Veteran’s Grant

The War Veteran’s Grant targets individuals who fought in the Second World War or the Korean War, who are 60 years or older and/or have a disability. It is similar in value to the Older Persons Grant, although an additional nominal amount is paid in recognition for their participation in the war.

Disability Grant

The Disability Grant (DG) aims to assist people between the ages of 18 and 59 whose livelihood is severely limited due to ill health or disability. The value of the grant is ZAR 1,140 (approx. USD 140) per month in 2011/2012.

Grant-in-Aid

The Grant-in-aid is an additional grant awarded to persons who are in receipt of the Older Persons Grant, Disability, or War Veteran’s Grants, and who are unable to care for themselves. The amount of ZAR 250 (approx. USD35) per month is paid to enable them to obtain some assistance with their daily activities.

 

Régimes de sécurité sociale et programmes par branche