South African Pensions
The means-tested, non-contributory (social) pension in South Africa was first introduced in 1928 but it was only in 1993 that the same amount was paid to all racial groups.
Women over 60 and men over 65 may be eligible for a monthly pension of R780 (US$109). Means testing is based on an individual’s (and partner’s if married) income levels.
The scheme is administered by the Department of Social Development and financed by general taxation. The old-age pension makes up 1.4% of gross domestic product (GDP) and 38% of the Department’s total cash transfer expenditure.
About 2 million people receive the old-age pension. This is 94% of those over 65, so despite being means tested, it has near universal coverage for those over 65.
The social pension reduces the number of people living below the poverty line by 2.24 million. It increases the income of the poorest 5% of the population by 50%. People in households receiving a pension are 12.5% less likely to be poor in South Africa.
It is so negligible that South Africans must plan for their own retirement.
Holborn Assets are members of SABCO in the UAE and have qualified South African financial advisers to help you do this. Contact a qualified Holborn Assets Adviser today.