South Africa Cash Grant Helps Jobless Seek Work, Study Finds

A simple cash payment is helping millions of South Africans search for jobs instead of giving up. New research from the University of Cape Town shows that South Africa's Social Relief of Distress grant increases the likelihood that recipients will actively seek work by 3.4 percentage points.

The grant started in April 2020 as temporary COVID relief when lockdowns destroyed informal livelihoods overnight. President Cyril Ramaphosa announced it would help working-age adults, a group that had never received government support before.

Six years later, the program still serves millions of people who depend on the monthly payment. The grant amount rose from R350 to R370 in April 2024, roughly $20 USD.

Critics worried the payments would discourage people from seeking jobs. Researchers Tim Köhler, Ben Stanwix and Haroon Bhorat decided to test that fear with hard data from 2021 and 2022.

They found exactly the opposite. People receiving the grant were more likely to look for work and even try starting businesses. The probability of attempting entrepreneurship increased by 1.5 percentage points.

Overall, employment probability increased by 2.2 percentage points among grant recipients. The researchers say the cash likely eases financial pressure, giving people resources to travel to interviews, print resumes, and take other job-seeking steps.

The program faced serious growing pains. Early on, only 116,867 people received payment by May 2020 despite 6.3 million valid applications. Technical checks against government databases caused massive delays and incorrect rejections.

Fraud also became a problem as the program grew. In October 2024, two university students discovered criminals were filing fraudulent applications using ID numbers of teenagers who just turned 18.

The South African Social Security Agency responded by requiring biometric verification. Many legitimate recipients then struggled to complete the checks, especially those with older green ID books.

The Ripple Effect

The research matters far beyond South Africa's borders. Governments worldwide debate whether cash assistance helps or hurts employment, and this evidence suggests support can actually enable job-seeking rather than replace it.

The findings show that when people have their basic needs met, they gain capacity to invest in their futures. The small monthly payment covers transportation costs, phone airtime for job applications, and other expenses that create barriers for the unemployed.

Of course, the grant alone can't solve unemployment. The researchers emphasize that lasting employment still depends on whether jobs actually exist in the economy.

A January 2025 court ruling found several program regulations unconstitutional and ordered the government to increase both the grant amount and income threshold over time. The government has appealed, with the Supreme Court of Appeal set to decide.

Meanwhile, millions of South Africans continue using their monthly support to keep searching for better opportunities.