Social Security Green Paper (Mandatory Pension and Basic Income Grant)

The Minister of Social Development invites the public to comment on the Green Paper on Comprehensive Social Security and Retirement Reform (Mandatory Pension and Basic Income Grant).

    • increasing income taxes to fund a Basic Income Grant
    • mandatory contributions to a state-run pension scheme.

Add your suggestions, or have your say below.

21849 comments delivered (closes 10 December 2021) WITHDRAWN

click to view a report on the public participation
click to view details, statements and documents
click to download a PDF of the public comments
DearSA-mandatory-pension-and-basic-income-grant
Dear South Africa

[CLOSED] Have your say – shape the outcome.

    Do you support the proposals within this Green Paper?

    What is your top concern? (view details at orange link above)

    What is your status?

    Dear South Africa

    LISTEN

    ChaiFM – New Blue Review with Benji Schulman (Rob Hutchinson as guest)

    Mandatory government pension fund

    The green paper proposes creating a mandatory pension and insurance system called the National Social Security Fund (NSSF) that will be funded with payroll contributions ranging between 8% and 12% of earnings, with the following thresholds in place:

    • Workers earning more than the ceiling of R276,000 per annum, or R23,000 per month, will not be obligated to contribute on income above that level.
    • Workers earning less than R20,000 per year should not be obliged to contribute to the NSSF, though they will continue contributing to the UIF.

    Universal Basic Income Grant

    To fund the lowest level of its proposed universal basic income grant, the Department of Social Development said a 10-percentage point increase on income taxes would be needed to raise R200 billion.

    The paper says that government should strive to achieve a basic income for all South Africans of at least R7,500 per month using a combination of the grant and labour.

    WHAT IS A GREEN PAPER?

    Kindly provided by PMG

    The process of making a law sometimes begins with a discussion document, called a Green Paper. This is drafted in the Ministry or department dealing with the particular issue in order to show the way that it is thinking on a particular policy. It is then published so that anyone who is interested can give comments, suggestions and ideas.

    The Green Paper is sometimes followed by a more refined discussion document, called a White Paper, which is a broad statement of government policy.

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    MEDIA STATEMENT

    Proving yet again that public participation can sink bad laws before they get started

    On Monday, 31 August 2021, the government announced that it was withdrawing its controversial green paper on comprehensive social security and retirement.

    The green paper proposed setting up a new National Social Security Fund (NSSF) into which employers and employees would have to pay up to 12% of their earnings, with a ceiling of R276, 000 per year or R2,760 per month.

    Dear South Africa launched a public participation campaign to gauge the reaction of ordinary South Africans to these proposals.

    “Of all the campaigns we have run, this one was unique in two respects: it elicited a huge response in a relatively short period of time – more than 21,000 responses in a period of two weeks – with about 99% voicing their opinions against the proposals,” says Dear SA campaign director, Rob Hutchinson.

    “This shows yet again the power of participative democracy, and there is no doubt that the Dewar South Africa campaign was a key reason behind the government’s decision to withdraw the green paper.”

    The green paper was also widely condemned by trade unions, business and non-governmental organisations (NGOs).

    Business members of the National Economic Development and Labour Council (Nedlac) condemned the green paper for not considering amendments they had put forward several years ago.

    Trade unions likewise rejected the green paper proposals because it would reduce take-home pay for workers, and place private savings in the hands of government apparatchiks.

    The middle and working classes of South Africa would have borne the brunt of these proposals. If implemented, it would mean South Africans would become the seventh most taxed people in the world – effectively, paying First World taxes for emerging world services.

    Economists also condemned the proposals as unaffordable, irrational and possibly illegal in that they had not been subjected to economic impact assessments as required by law.

    Commentary from Dear South Africa shows the extent of the anger over a “cheeky” move by the government to introduce what is, in effect, another tax on working people.

    “I think it’s unfair on the general public to fund these ludicrous proposals. We are already tax[ed] to the extent that a quarter of our salaries already go towards funding the government,” says one commentator.

    “[I am] not prepared to pay more tax to assist an inept government, failing at every level!”

    Says Hutchinson: “Dear South Africa can certainly count the withdrawal of the green paper as a success. Our job is not to take a position on whether these proposals or good or bad but to provide a platform for ordinary South Africans to express their opinions. It is a credit to the government that it is responsive to these campaigns, and it should be commended for withdrawing this green paper so quickly.

    “This is not our first success. Based on a campaign we ran last year, South Africans were fed up with the restrictions imposed on them by the lockdown, and in particular, they wanted schools reopened. We forwarded the results of this campaign to the government, and again it responded by reopening schools.”