HOW township woman turns SASSA grant into R18 000 a month, tax free

So much of what you hear around the South African Social Security Agency (SASSA) grant is that it’s not enough to survive on each month. Understandably so, when electricity has increased by 101% and fuel 59% since the COVID-19 pandemic, taking all other living expenses along with them …

Nevertheless, a decade ago, a Khayelitsha woman started building with her SASSA grant, and we can all learn from her example. Every month she took half of her social welfare and she purchased building materials on lay-by. No bank was willing to touch her, so no loan, no bond, which may have been the most serendipitous outcome as it turns out.

HOW TO TURN SASSA GRANT INTO R18 000

A decade later, she owns six rental rooms on her property, each one brings in R3 000. That’s R18 000 a month, tax-free, and now she’s a respected landlord in her community. This is according to informal-economy-expert GG Alcock’s book, Kasinomics. He explains that cash-based, informal rentals are a R30-billion-a-year industry. And it’s almost completely off the books and invisible to government’s formal tax system. Even more fascinating is what Capitec bank discovered when analysing the bank statements of its SASSA grant recipients …

It found the average SASSA beneficiary was earning roughly five-times their grant amount, through side hustles, small businesses and informal work. Stats SA data suggests only 23% of grant recipients report it as their only income source. While the other 77% treat a SASSA grant as a secondary stream, on top of tax-free earnings.

REASON FOR HIGH UNEMPLOYMENT RATE

Moreover, former Capitec CEO Gerrie Fourie, points out that this is one of the reasons for SA’s high unemployment rate. “Admitting to being employed, even informally, risks losing the SASSA grant entirely. So, recipients understandably never say it. And it means unemployment data, and the real scale of grant-funded entrepreneurship, is almost certainly undercounted,” concludes Fourie.

But what do you think? Are you surprised to hear so many people earn five-times more than the SASSA Grant? Do you agree with such practices? Please share your thoughts in the comments section below …