New Law for Informal Workers – South Africa is on the brink of a groundbreaking shift in its social welfare policy. A new government report reveals that by 2026, an estimated 1.5 million informal workers could become eligible for SASSA grants under proposed legislative reforms. This move, part of the Department of Social Development’s broader agenda, aims to expand the safety net to include workers outside the formal economy — such as street vendors, domestic workers, and day laborers — many of whom were previously excluded from consistent financial support. Currently, millions of South Africans rely on grants like the SRD (Social Relief of Distress), Old Age, Disability, and Child Support. However, informal workers often fall through the cracks due to inconsistent income records, lack of UIF contributions, or undocumented employment history. The new proposal, still under policy review, recommends redefining eligibility based on income thresholds rather than strict employment classifications. If implemented, the revised policy would mark a significant expansion of SASSA’s mandate. The National Treasury and Department of Social Development are jointly assessing the fiscal implications, and pilot projects could begin as early as mid-2025. Public consultations are also expected to take place in the coming months. This article explores how this policy change could impact informal workers, what categories may qualify, and what beneficiaries can expect in terms of timelines and benefit amounts.
What Is the New Law for Informal Workers and Who Will Benefit?
The new legislative proposal aims to expand SASSA’s reach by updating qualification criteria and targeting economically vulnerable individuals in the informal sector.
- Focuses on informal workers like street hawkers, domestic help, taxi marshals, and freelance artisans
- Targets people earning below a fixed monthly threshold (to be defined in 2025)
- Uses alternative verification methods like community attestations or mobile payment records
- Expected to roll out nationally by 2026 with phased implementation from mid-2025
- Could cover over 1.5 million new recipients
- Includes monthly support aligned with SRD grant level (currently R370-R410)
- Will require legislative amendment and National Treasury approval
Breakdown of New Law for Informal Workers Who Could Qualify
Below is a projected estimate of how many informal workers across categories may be eligible under the revised proposal:
| Category | Estimated Eligible Workers | Average Income (Monthly) | Grant Amount Proposed | Region Coverage |
|---|---|---|---|---|
| Street Vendors | 450,000 | R2,000 – R2,500 | R400/month | Urban & Township Areas |
| Domestic Workers | 300,000 | R1,800 – R2,200 | R400/month | Nationwide |
| Farm Labourers | 200,000 | R1,500 – R2,000 | R400/month | Rural Areas |
| Construction Day Workers | 180,000 | R2,000 – R3,000 | R400/month | Semi-Urban |
| Taxi Marshals | 120,000 | R1,500 – R2,000 | R400/month | Transport Nodes |
| Freelancers (Craftsmen) | 100,000 | R2,500 – R3,500 | R400/month | Mixed Urban/Rural |
| Waste Pickers | 80,000 | R1,000 – R1,800 | R400/month | City Landfills & Suburbs |
| Part-time Tutors/Cleaners | 70,000 | R2,000 – R2,800 | R400/month | Metro & Towns |
New Law for Informal Workers – How Will Eligibility Be Verified Without UIF or Payslips?
Since many informal workers do not have formal contracts or UIF records, the government is proposing alternate ways to verify income and employment.
Community Verification System
Government is exploring trusted community-based systems to help verify a person’s informal employment and income situation.
- Local NGOs and community leaders may be asked to certify applicants
- Digital records from mobile money transfers could serve as income proof
- Utility bill payments and rent receipts may also support applications
New Law for Informal Workers – Pilot Projects in 2025
To test these systems, SASSA and Social Development will run pilot projects starting early 2025.
- Phase 1 in Gauteng, KZN, and Western Cape
- Phase 2 expansion to Limpopo, Mpumalanga, and Free State
- Aim: To refine application, verification, and payment processes before full rollout
Financial Impact and Budgeting by National Treasury
Expanding coverage to informal workers will require additional funding and structural planning. Treasury has signaled cautious optimism.
Cost Projections and Allocation (2025–2026)
| Year | Estimated New Beneficiaries | Annual Budget Required | Budget Source |
|---|---|---|---|
| 2025 | 400,000 (pilot phase) | R2.2 Billion | Reallocated grant funds |
| 2026 | 1.5 Million (full rollout) | R8.9 Billion | National Budget Increase |
| Post-2026 | 1.7 Million+ (growth) | R10 Billion | Long-term welfare planning |
Funding Strategy
- Reallocate underutilized funds from existing welfare programs
- Introduce progressive taxation proposals for social development funding
- Partner with NGOs to reduce administrative costs
When Will the Expansion Happen?
The reform is currently in its proposal and review stage. A detailed roadmap outlines the key milestones:
Legislative and Rollout Timeline
| Stage | Estimated Date | Activity Description |
|---|---|---|
| Final Proposal Draft | October 2024 | Submission to Parliament for review |
| Public Consultation Period | November 2024 – Feb 2025 | Open comments and town hall meetings |
| Pilot Program Launch | May 2025 | Begins in select provinces |
| Policy Approval by Parliament | July 2025 | Legislation passed |
| Full Rollout Commences | January 2026 | Nationwide expansion begins |
Challenges and Criticisms
Not all stakeholders support the proposed expansion. Some economists and officials have raised flags.
Budget Concerns and Implementation Risks
- Risk of overburdening national welfare budget
- Concerns about fraud and false declarations without payslips
- Challenges in rural areas with low documentation or verification tools
- Political resistance from sectors prioritizing employment over welfare expansion
Balancing Welfare and Economic Productivity
Some experts argue that while the intention is good, it may inadvertently discourage job-seeking behavior among able-bodied citizens.
- Government promises “periodic review” of beneficiary list to ensure only those who qualify receive aid
- Digital tracking systems may help remove ineligible recipients over time
This new proposed expansion of SASSA coverage has the potential to uplift millions of informal workers who have long remained outside the formal safety net. While challenges in verification, budgeting, and administration remain, the government appears committed to widening social support in an inclusive and adaptive manner. As developments unfold, potential beneficiaries are encouraged to follow official SASSA updates and participate in public consultations to voice their concerns and suggestions.
FAQs: SASSA Informal Worker Grant Expansion
1. Who qualifies as an informal worker under this proposal?
Anyone working without a formal contract—such as street vendors, domestic workers, or freelancers—may qualify.
2. Will I need a payslip or UIF record to apply?
No, alternative proof like community verification or mobile payment records will be accepted.
3. When will this new grant be available?
Pilot programs will begin in May 2025, with full rollout expected by January 2026.
4. How much money will be given each month?
Eligible workers will likely receive around R400 per month, similar to the SRD grant.
5. Can I receive this grant if I already get SRD?
No, this new grant will replace the SRD for informal workers who qualify.