Year: 2006
Working paper number: 154
Author: Seekings, Jeremy
Unit: SSU

South Africa developed, during the course of the twentieth century, an exceptional welfare system based on social assistance rather than social insurance, and focused especially on old-age pensions.  The origins of South Africa's welfare state lay in the 1920s, not in the 1930s as has generally been suggested.  This paper examines the process leading to the 1928 Old Age Pensions Act, paying particular attention to the 1926-28 Pienaar Commission on Old Age Pensions and National Insurance.  The introduction of old age pensions enjoyed the support of all parties representing white and coloured voters in Parliament, but for diverse reasons.  For the National Party and Labour Party – partners in the coalition Pact Government of 1924-29 – non-contributory old-age pensions were a crucial pillar in the 'civilised labour' policies designed to lift 'poor whites' out of poverty and re-establish a clear racial hierarchy.  Welfare reform was thus, in significant part, a response to the 'swartgevaar' or menace of black physical, occupational and social mobility.  The choice of a system of tax-financed social assistance, in preference to a system of social insurance financed out of contributions by employers and workers, was due to a combination of factors: the perceived need to provide immediate redress against poverty and unemployment (motivating the National Party); the powerful influence of left and liberal thinking from Britain, Australia and New Zealand (on both bureaucrats and the Labour Party); a concern that contributory schemes would add to much to the costs of production (among employers and workers alike); and a worry about the racial coverage of contributory schemes.

Publication file: wp154.pdf