The means-tested, non-contributory (social) pension in South Africa was first introduced in 1928 but it was only in 1993 that the same amount was paid to all racial groups.

Women over 60 and men over 65 may be eligible for a monthly pension of R780 (US$109). Means testing is based on an individual’s (and partner’s if married) income levels.

Cost

The scheme is administered by the Department of Social Development and financed by general taxation. The old-age pension makes up 1.4% of gross domestic product (GDP) and 38% of the Department’s total cash transfer expenditure.

Coverage

About 2 million people receive the old-age pension. This is 94% of those over 65, so despite being means tested, it has near universal coverage for those over 65.

Impact

The social pension reduces the number of people living below the poverty line by 2.24 million. It increases the income of the poorest 5% of the population by 50%. People in households receiving a pension are 12.5% less likely to be poor in South Africa.

A survey in Cape Town, South Africa, revealed that older people spent their pension as follows:

• 46% on food
• 12% on utilities
• 10% on social participation
• 9% on other household expenditure
• 5% on debt repayment
• 3% on healthcare
• 3% on education
• 2% on savings and investment.

The bulk of a pension is spent on food and therefore it is not surprising that a pension has positive impacts on health and nutrition. Children, in particular, benefit from the old-age pension.

With the impact of HIV/AIDS and the increasing number of older people looking after orphans in South Africa and the rest of sub-Saharan Africa, social pensions can enable carers to better provide for themselves and their dependants, reducing money anxieties.

Accessing the pension

HelpAge International’s partner, The Muthande Society for the Aged (MUSA), in Durban, South Africa, helps older people access the social pension.

The majority of older black South Africans do not have a birth certificate so rely on their identity papers for proof of age. When the age is wrong on the identity cards, a pension application cannot be made until the correct age is proven and new identity documents obtained.

MUSA’s trained team of paralegals help complete forms and ensure that all the required documentation is available. MUSA also provides transport to pension pay points and runs a literacy programme to enable older people to sign for their pension.

Maria’s story

75-year-old Maria Papela helps to support four generations of her family, using her pension. She lives in Durban with her daughter Margaret, who is in her late 40s, teenage grandson Timothy, and three other young grandchildren, left behind by Margaret’s two daughters who both died from AIDS. Maria owns the house they live in and four rooms at the back of the house which she rents out for extra income.

Escaping the cycle of poverty

Her pension gives the family a chance of escaping the cycle of poverty that traps many families affected by HIV and AIDS. It means Maria and her family can access food, shelter, education and health care.

The future for the younger generation is already looking brighter. Maria’s grandson Timothy is a talented violinist. “Timothy is training with an orchestra at the state theatre,” says Maria with pride in her eyes.