Designing a Basic Income Guarantee

The document examines the trade-offs between universal and targeted Basic Income Guarantees (BIG) for South Africans aged 18-59. It argues that targeting creates administrative burdens, high exclusion errors, and social stigma, whereas a Universal Basic Income Guarantee (UBIG) ensures broader coverage and social cohesion. The brief contends that a UBIG is fiscally feasible through progressive taxation, such as a Social Security Tax, and provides superior poverty reduction by allowing households to pool resources. It specifically critiques the use of employment status or household-level targeting, noting that the latter can exacerbate gender inequalities. The brief recommends a universal BIG as the most efficient path to economic recovery and social stability.

• Targeting a basic income grant at specific vulnerable groups often fails in practice due to administrative burdens, stigmatisation, and unwarranted exclusions, whereas universality minimises these risks.
• Economic modelling indicates that a universal basic income, even at lower amounts, can have a more positive impact on household income and poverty reduction than targeted grants set at higher levels because it allows multiple adults in low-income households to pool their income.
• The claim that social assistance creates dependency is unsupported by evidence; conversely, targeted grants may actually discourage formal employment because recipients risk losing the benefit if they find work.
• A Universal Basic Income Guarantee (UBIG) is financially feasible in South Africa through progressive financing, such as a Social Security Tax (SST) that recoups benefits from high-income earners.
• Targeting based on employment status is problematic because it is nearly impossible to accurately distinguish the unemployed from those not registered in formal databases, such as informal sector workers.
• Targeting grants at the household level rather than the individual can deepen internal power imbalances, entrench women's reliance on male heads of household, and increase the risk of gender-based violence.
• The COVID-19 Social Relief of Distress (SRD) grant demonstrated the failures of targeting, with an estimated exclusion of almost 40% of the target population and significant administrative errors.
• Phasing-in a BIG by age cohorts is viewed as an arbitrary approach that ignores the urgency of the current socioeconomic crisis and would be slower to implement than a universal model due to SASSA's capacity constraints.

APA

Institute for Economic Justice (2021). Designing a Basic Income Guarantee. https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-UBIG-3_2.pdf

Chicago

Institute for Economic Justice. Designing a Basic Income Guarantee. 2021. https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-UBIG-3_2.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=Designing a Basic Income Guarantee |date=October 2021 |url=https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-UBIG-3_2.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2021designing, author = {{Institute for Economic Justice}}, title = {{Designing a Basic Income Guarantee}}, institution = {Institute for Economic Justice}, year = {2021}, month = oct, url = {https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-UBIG-3_2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }