THE PITFALLS OF POVERTY TARGETING

The Institute for Economic Justice (IEJ) conducted a mixed-methods study involving 900 survey respondents and 58 interviews in Durban and rural North West to analyze exclusions from the SRD grant. The research found a monthly average erroneous exclusion rate of 89.7% among eligible respondents, with only 10.3% of eligible participants receiving payments. Key drivers of exclusion include a flawed bank verification system that counts non-income inflows (such as child maintenance or loans) as 'means', digital barriers due to online-only applications, and language barriers from an English-only process. The study highlights that marginalized groups—including women, rural dwellers, and those with lower education levels—are at higher risk of exclusion. Furthermore, 98% of 10 million grant appeals in the 2023/24 financial year were unsuccessful. The IEJ recommends transitioning toward a universal basic income, reforming the appeals process, and increasing grant values to align with the food poverty line.

• The study identified a staggering rate of erroneous exclusion among eligible individuals living in poverty, with a monthly average erroneous exclusion rate of 89.7% and only 10.3% of eligible participants actually receiving payments.
• The government's bank verification system is fundamentally flawed because it classifies any bank inflow as 'means', including non-income transfers such as child maintenance, loans, once-off donations, and funds held for others.
• The SRD grant appeals process is largely ineffective, as it relies on the same automated checks without allowing for new information; consequently, 98% of the 10 million appeals lodged in the 2023/24 financial year were unsuccessful.
• Digital and financial exclusion significantly hinder access, as individuals without smartphones, email addresses, or their own bank accounts are more likely to not apply despite being eligible.
• Specific demographic groups face higher risks of exclusion: eligible 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 refugee IDs were not approved in the sample.
• Approved grants are frequently not paid, with an average of 44.5% of approved grants remaining unpaid across the study period, particularly affecting those using Post Bank.
• The current means-test threshold of R624 has not been adjusted for inflation since 2021, meaning applicants must now be poorer to qualify as the food poverty line has risen to R796.

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} }