Godongwana delays Basic Income Support decision, extends R370 SRD to 2028

Key developments from the 2026 MTBPS

Finance Minister Enoch Godongwana left the long‑running question of a permanent Basic Income Support scheme unresolved in his 2026 Medium‑Term Budget Policy Statement (MTBPS). Instead of announcing a transition to a permanent programme, the MTBPS extended the existing temporary R370 SRD grant for another year, until March 2028.

What the MTBPS announced about the SRD

The extension provides continuity for recipients of the R370 SRD payment, but the address did not set out a timetable or firm plan for converting the temporary grant into a long‑term Basic Income Support programme. Treasury signalled a focus on connecting SRD beneficiaries to employment, training and business opportunities, and described stronger beneficiary verification and review processes as priorities.

Measures highlighted by Treasury

• Linking SRD beneficiaries to employment, training and business opportunities via a data platform called MzansiXchange.
• Implementing stronger beneficiary verification and review processes.

The backdrop: worsening youth unemployment

The MTBPS update came as South Africa faces a deepening youth employment crisis. Recent official labour figures show unemployment among young people aged 15 to 34 rose to 47.4% in the second quarter of 2026, up 1.5 percentage points from the previous quarter. The total number of unemployed young people increased by 264,000 to five million.

Those statistics frame the stakes for decisions about long‑term income support and wider social and economic policy. Extending the temporary SRD payment preserves immediate relief for many households but does not resolve the longer‑term questions about scope, financing and eligibility.

Treasury’s stated concerns about a permanent scheme

National Treasury has repeatedly emphasised the need for careful costing before supporting a permanent Basic Income Support scheme. In earlier statements this year, Treasury said the proposed policy must be properly costed, and the minister warned that a broader scheme could cost hundreds of billions, placing pressure on an already constrained fiscal framework.

Those fiscal concerns were reiterated during the MTBPS, and Treasury signalled that further technical and legal clarity is required before a permanent commitment can be made.

Legal uncertainty and potential cost implications

The MTBPS also noted ongoing legal and fiscal uncertainty related to the SRD regulations. Treasury is waiting for the outcome of the government’s appeal against a High Court ruling on SRD regulations. Preliminary estimates referenced in the policy statement suggest that if the ruling is upheld, the annual cost of the SRD could rise from about R36 billion to R74 billion because it would bring millions more people into the system.

That possible increase in cost is one of the concrete fiscal risks Treasury says must be resolved before it can back a permanent Basic Income Support solution.

Process and next steps

The policy process for Basic Income Support has been slow and contingent on Treasury support. A revised costing was expected to go to Cabinet in March 2027, subject to Treasury backing. The latest extension of the temporary SRD payment effectively buys government more time, but the MTBPS did not announce a firm transition timetable or next‑step milestones for moving from the temporary grant to a permanent scheme.

Why this matters

Decisions on income support touch on immediate household welfare, longer‑term poverty dynamics and the national budget. Extending the temporary R370 SRD sustains short‑term relief for recipients, while leaving policymakers to balance social needs against fiscal constraints and legal uncertainty.

As the government and Treasury continue to deliberate, two facts are clear in the MTBPS: first, the R370 SRD payment has been extended until March 2028; second, Treasury is calling for further costing, verification and legal clarity before endorsing a permanent Basic Income Support programme. Against a backdrop of rising youth unemployment, those choices will shape social policy debates and budget priorities in the months ahead.

What readers should watch for

• Updates from National Treasury on the revised costing and any new fiscal assessments.
• The outcome of the government’s appeal concerning SRD regulations, and the fiscal estimates tied to that decision.
• Any formal transition plan or timetable announced by Cabinet or Treasury for a move from the temporary SRD to a permanent Basic Income Support scheme.

Until those pieces fall into place, the extension of the temporary SRD maintains continuity for beneficiaries but leaves the larger policy question unresolved.