76 CHAPTER 5


Table 5.2—Summary of impacts of South African social grants, assuming full take-up (percent change)


Poverty Program Old Age Pension


Child Support Grant (to age eighteen) All social security grants


headcount –1.5 to –4.5


–12.4 to –35.6 –15.2 to –45.4


Poverty gap –3.8 to –6.2


–29.9 to –58.7 –33.5 to –58.6


Source: Samson et al. (2004). Notes: Range reflects different poverty lines. Poverty headcount is measured for individuals, and poverty gap is the aggregate national poverty gap.


choice of poverty line and the methodology for quantifying impact. Similarly, there is notable variation in the potential poverty impacts of the various types of grants (Table 5.2). With respect to expanding take-up, the OAP with full take-up would have small impacts on all poverty measures because the level of coverage is already quite high and most of the elderly who would be eli- gible are less poor. However, extension of the CSG is likely to have significant poverty reduction impact, particularly if the age for eligibility is raised from the current level of age fourteen to age eighteen and the transfer value is adjusted to the current-day value. Gassmann and Behrendt (2006) simulate the impact of several types of social transfers in Tanzania including an old-age and disability pension, a uni- versal child transfer, and a targeted transfer for vulnerable households using data from nationally representative household budget surveys. Their micro- simulations are based on household consumption measured by expenditures and use a food poverty line and a basic poverty line, both calculated per adult equivalent.4 The study assesses the impact of several types of transfers. The basic old-age and disability pension entitles all individuals age sixty or older, regardless of income or other social assistance benefits, to a transfer repre- senting 70 percent of the food poverty line per person. In Tanzania this rep- resents about $10 PPP, considered sufficient to lift the elderly out of poverty in each country.5 The universal child benefit covers all school-age children (ages seven through fourteen) and orphans under age seven and provides 35 percent of the food poverty line per eligible child, representing just under $5 PPP. The targeted cash transfer provides cash equivalent to the value of


4The food poverty line is based on the cost of a food basket covering specified daily calorie requirements (2,200 kilocalories per adult equivalent). The basic poverty line is adjusted to


account for the need for nonfood goods and services (Gassmann and Behrendt 2006). 5PPP: purchasing power parity.


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