D
OZENS OF SOUTH
African civil society
organisations,
trade unions,
academic and research
bodies –and influential
observers like the
Organisation for Economic
Cooperation and
Development –have been
calling on the government to
phase in a universal basic
income by ramping up the
Covid-19 social relief of
distress grant.
Instead, the Treasury
and Presidency reportedly
favour an exceedingly
narrow, exclusionary and
complicated approach. This
approach would deprive
millions of people of
desperately needed income
support by adding new layers
of restrictive conditions.
The proposals hark back to
the heydays of neoliberal
social policy: the overriding
goal seems to be to limit the
state’s obligations to the
citizenry while focusing on
economic growth and job
creation as a cure-all.
Policymakers remain in thrall to that
dogma, even though it’s refuted by decades
of evidence. Our unemployment rate has
exceeded 20% since at least the early-
1990s and it stood at 34% in mid-2022,
or almost 45% when, more realistically,
counting people who had given up looking
for work. Our economy is structured in
ways that generate great wealth (that is
seized by a small minority), but without
the paid labour of close to half the adult
population.The downsides of
means testing
The latest proposals downplay the
severity of the social crisis and ignore
its structural causes. They artificially
segment populations who, in reality, live
in similar desperation –– offering one
group rationed support, while denying it
to the other. They do this by tying support
to certain conditions (for example, proof
that one is looking for work). They require
proof (through means testing) that one
“needs” income support. The fact that this
became a staple of social policy globally
over the past 40 years makes it no lessunfair, inefficient and ineffective.
Those sorts of schemes require
collecting detailed information about the
targeted beneficiaries –– for instance,
regularly verifying their incomes –– that
is often out-of-date, incomplete or plain
inaccurate. Or, when tied to job-seeking,
they force people into the costly theatrics
of proving they’re looking for work, even
when the odds of finding employment are
vanishingly slim.
Burdensome and prone to error and
delay, targeted programmes routinely miss
large proportions of intended beneficiaries.
This makes them poor at drastically
reducing income poverty. Brazil’s flagship
Bolsa Familia programme, for example,
missed very large percentages of intended
beneficiaries (despite the country’s
relatively strong administrative capacity)
as did Mexico’s Oportunidades programme.
None of the 42 targeted social protection
schemes examined in a large review had
exclusion errors of less than 44%; 12 of
them had exclusion errors of over 70%.
Similarly, the emergency cash
payments provided in South Africa
during the first wave of the Covid-19
pandemic brought vital relief to millions
of people. But they were marred by seriousinefficiencies and inaccurate and out-
of-date information. This led to huge
delays and gaps in coverage. In the grant’s
initial cycle, only 6.4 million applicants
were approved, even though the eligible
population was estimated at 10-12 million
people. Almost half of eligible individuals
who were not receiving the social relief of
distress grant by mid-2020 were in the
poorest third of households.
Means testing is also highly unfair in
places with very widespread poverty, like
South Africa, since it is insensitive to the
tiny changes that can shift people in and
out of eligibility. Limiting income support
to people earning less than, say, R663 per
month (the current “food poverty line”)
and denying it to others earning, say, R800
involves a pitiless distinction between
people in equally dire circumstances. The
schemes also struggle to reliably identify
who should receive support at a given
point, leading to unmerited interruptions
and delays in the receipt of support.
This is why Thandika Mkandawire
insisted that targeted and means-tested
income support does not make sense in
places where large proportions of the
population are poor. This is especially the
case if universal payments can be clawedA UNIVERSAL BASIC INCOME:
no to means testing
By Hein Marais
Limiting income support to people earning less than, say, R663 per month (the
current “food poverty line”) and denying it to others earning, say, R800 involves a
pitiless distinction between people in equally dire circumstances.ANALYSIS