Could SASSA run out of money to pay beneficiaries?

The country’s small tax base and high unemployment rate could hurt South African Social Security Agency (SASSA) beneficiaries.

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An example of this is Social Security in the United States (U.S.).

A U.S. government report points out that the country could run out of money to pay pensioners in 6 years.

Comparing SASSA to Social Security

In the U.S., Social Security is a state-owned retirement fund.

When U.S. citizens retire at 67, they receive a monthly payment from this fund, similar to an old-age grant in South Africa.

All the money the U.S. Social Security Administration collects comes directly from income taxes.

Americans aren’t earning as much as they once did, which puts pressure on Social Security.

Now, a report by the agency shows it may have to start cutting pension benefits in 2032.

The agency says not enough money is coming in to support the millions of Americans over 67.

SASSA in South Africa could face a similar future, even though the system isn’t the same.

The country’s pensioners are living longer.

Unemployment is rising among young South Africans.

Rising unemployment is shrinking the tax base.

The SARS and SASSA Connection

Taxes impact SASSA.

If there are fewer taxpayers in the country, the South African Revenue Service (SARS) has less money to collect, and the government has less money to spend.

When the government has less to spend, the amount it budgets for SASSA could drop.

This may not affect current payments, but it could impact future social grant increases.

How long before the system begins to show cracks?

Social Security believes the U.S. only has 6 years.

Does South Africa have the same timeline?

Beneficiaries Can Celebrate Tax Wins

Maybe not.

In fact, SASSA beneficiaries can celebrate that SARS collected more money this year.

SARS also hopes to increase these gains in 2027 and 2028.

But there’s always the chance that this may not be possible because one in three South Africans is without work.

YearSARS Collection (Gross)Social Grant Allocation2025R2.303 trillionR267 billion2024R2.155 trillionR250 billion2023R2.07 trillionR233 billion2022R1.563 trillionR222.7 billion2021R1.249 trillionR218.9 billion

SASSA beneficiaries can expect increases next year. But according to the 2026-2027 budget, there’ll be a significant drop in 2028.

That drop stems from the National Treasury reducing spending on the Social Relief of Distress (SRD) grant.

YearSocial Grant BudgetDifference (%)2027R292.7 billion+ 4.52%2028R268.8 billion– 8.16%2029R277.7 billion+3.33%

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