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Grants
As announced in Wednesday’s Budget speech, the government’s social grants will increase only slightly for the 2020/21 tax year, although the special Covid-19 social relief of distress grant has been allocated R2.1 billion to extend it until the end of April. Old age, war veterans’, disability and care dependency grants increase by 1.6%, from R1 860 to R1 890 a month. The grant for people over 75 increases from R1 880 to R 1 910. The foster care grant increases by 1%, from R1 040 to R1 050, and the child support grant increases by an inflation-related 3.4%, from R445 to R460.
In line with announcements made by Finance Minister Tito Mboweni in Parliament on Wednesday, the South African Revenue Service (SARS) will establish a separate unit to focus on wealthy taxpayers with complex financial arrangements. In a release this week SARS says the unit will be known as High Wealth Individual Taxpayer Segment. “We believe that statements of assets and liabilities often say more about [these individuals’] financial affairs than statements of income. SARS is on a journey to foster a culture of compliance. Consequently, we have been paying particular attention to taxpayers with undeclared offshore holdings,” SARS says.
I have been contributing to my company pension fund since I joined 10 years ago (there is about R1 million accumulated, although I haven’t looked recently), but it is my only retirement savings. I am 35 years old. I am not sure what I need to do next. I don’t really have much other savings, except R30 000 in a money market account. I try to keep that at around that level for emergencies, and I do add to it occasionally. What should I do first? Add more to my pension or maybe open a tax-free savings account (TFSA)?
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