THE PITFALLS OF POVERTY TARGETING

This fact sheet by the Institute for Economic Justice (IEJ) examines the mechanisms and consequences of exclusion from South Africa's COVID-19 Social Relief of Distress (SRD) grant. Through a mixed-methods study, the IEJ finds that narrow poverty targeting and flawed automated verification systems lead to high rates of erroneous exclusion, disproportionately affecting the most marginalized populations, including women, rural dwellers, and those with limited digital or financial access.

• The SRD grant suffers from a significant gap between eligibility and approval; while expert estimates suggest 17 to 18 million people are eligible based on food poverty, monthly approvals have remained around 8 million since April 2022.
• An IEJ independent eligibility assessment revealed a monthly average erroneous exclusion rate of 89.7% among eligible respondents, meaning only 10.3% of those who qualified under official criteria actually received payments.
• The government's bank verification system is flawed because it classifies all account inflows as 'means', including non-income transfers such as child maintenance, loans, once-off donations, and funds held for others. This led to 'alternative income source identified' being the reason for nearly 80% of rejections for eligible applicants in the study.
• The appeals process for the SRD grant is largely ineffective and automated, preventing applicants from submitting new evidence. In the 2023/24 financial year, 98% of the 10 million appeals lodged were unsuccessful.
• Approval does not guarantee payment; on average, 44.5% of approved grants were not paid across the three months studied. Those using Post Bank were less likely to be paid than those using direct bank transfers, coinciding with the phasing out of Postbank payments between December 2023 and April 2024.
• Specific demographic and social factors increase the risk of exclusion: women are more likely to be rejected (potentially due to child support grants or maintenance payments), rural dwellers face higher rejection rates, and holders of green ID books are less likely to be approved than smart ID card holders.
• Digital and financial barriers significantly hinder access; individuals without smartphones, email addresses, or their own bank accounts are more likely to not apply, while those with lower education levels struggle to navigate the English-only application process.

APA

Institute for Economic Justice (2024). THE PITFALLS OF POVERTY TARGETING. https://iej.org.za/wp-content/uploads/2025/03/IEJ-UBIG-Factsheet-12.pdf

Chicago

Institute for Economic Justice. THE PITFALLS OF POVERTY TARGETING. 2024. https://iej.org.za/wp-content/uploads/2025/03/IEJ-UBIG-Factsheet-12.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=THE PITFALLS OF POVERTY TARGETING |date=12 November 2024 |url=https://iej.org.za/wp-content/uploads/2025/03/IEJ-UBIG-Factsheet-12.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2024pitfalls, author = {{Institute for Economic Justice}}, title = {{THE PITFALLS OF POVERTY TARGETING}}, institution = {Institute for Economic Justice}, year = {2024}, month = nov, url = {https://iej.org.za/wp-content/uploads/2025/03/IEJ-UBIG-Factsheet-12.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }