This paper investigates the expected costs of the system of cash transfers to
children in South Africa up to 2015. In 2008, the Child Support Grant (CSG) already
reached about 60% of children and future increases in beneficiary numbers are
driven by easily modelled changes in eligibility criteria. The child population is not
expected to grow between 2008 and 2015 and thus the fiscal cost of the CSG is
expected to stabilize in the near future. The other major child grant, the Foster Care
Grant (FCG), is far less predictable. Three-quarters of FCG beneficiaries are
orphans. If the FCG were to become a de facto orphan grant, the costs of the FCG
would escalate rapidly. The nature of the HIV/AIDS pandemic is such that the
number of dual orphans is expected to double between 2008 and 2015, reaching 1.3
million in 2015. The overall number of maternal, paternal and dual orphans is
expected to reach 4.8 million by 2015. We emphasise the need for the government
to clarify whether the FCG is the appropriate instrument for addressing the needs of
orphans. If it is, then the cost implications are substantial. In the interim, there is an
urgent need to establish why many maternal orphans are not receiving any form of
child grant.