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PRESENTATION TO THE SELECT COMMITTEE ON FINANCE 18 OCTOBER 2005

Department of Social Development Public Hearings on Provincial Budgets & Expenditure Review 2001/02- 2007/08. PRESENTATION TO THE SELECT COMMITTEE ON FINANCE 18 OCTOBER 2005. CONTENT. Overview of provincial expenditure Social development services Social Grants

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PRESENTATION TO THE SELECT COMMITTEE ON FINANCE 18 OCTOBER 2005

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  1. Department of Social DevelopmentPublic Hearings on Provincial Budgets & Expenditure Review 2001/02- 2007/08 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

  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 andprofessionals, community workers and child andyouthcareworkersthroughtargetedtrainingprogrammes in order to ensure effective delivery ofservices

  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 261 000orphans & vulnerable children have been identified in various parts of the country and are receiving appropriate care and support. • More than 412 000 families were supported

  20. Allocations 2001/02 –2003/04

  21. Allocations 2005/06 –2007/08

  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

  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

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