National Health Insurance
Income and Social Security in South Africa
The purpose of this series of policy briefs on National Health Insurance (NHI) and the related IMSA web-site is to put in the public domain material and evidence that will progress the technical work of developing a National Health Insurance system in South Africa. This includes tools for costing NHI and evidence on where savings could be achieved in moving to a future mandatory system with universal coverage.
This policy brief deals with research on the issue of affordability of health insurance in South Africa, whether in voluntary medical schemes or mandatory NHI. The levels of income in the country are explored, followed by studies of the impact of direct and income cross-subsidies on the affordability of health insurance. A methodology is presented for exploring the effects of reform on families and the effect on affordability of the proposed health insurance reforms of 2005 is demonstrated.
Download Full NHI Policy Brief 9 PDF Document
The pie chart below shows that 74.3% of the total South African population of 48.687 million in 2008 have no earnings. Almost one quarter have no earnings but are receiving some form of social security payment, with the dominant forms being the Old Age Pension and the Child Support Grant. Roughly one quarter are working and earning, but only 9.0% earn above the tax threshold. At best, if all those who did not provide income data are also earning above the tax threshold, the total might be 10.7% of the population.
Figure 1: Income and Social Security in South Africa
There is a strong pattern by age and gender to these findings, as shown below. These slides as well as the underlying data are on the IMSA NHI web-site under Resources for this Policy Brief.
Figure 2: Income and Social Security in South Africa
Figure 3: Income and Social Security in South Africa, proportion by age-gender band
As women access the Old Age Pension earlier (from age 60) and also tend to live longer, there are more women than men at older ages receiving social security. The retirement age will be equalised at age 60 for men and women from April 2010. There are more men than women earning an income and also earning above the tax threshold of R3,833 per month (R46,000 per annum) for those under age 65.
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