This Thematic Brief discusses social pensions, a specific social protection instrument that is currently the focus of much favourable policy attention in southern Africa. Social pensions are regular, non-contributory and unconditional cash grants made to older people. They differ from conventional pension schemes in several fundamental respects.

1. Occupational and private pension schemes are designed to protect people against loss of income following retirement from work, but social pensions are triggered by reaching an age milestone (usually 60 years, sometimes older), not by a change in employment status.
2. Occupational and private pension schemes are funded by contributions made by employees and employers, but social pensions are funded entirely by the state out of general revenues. (A social pension is a ‘flat-rate defined benefit’, rather than a ‘defined contribution’ scheme.)
3. The level of benefits paid by occupational and private pension schemes varies across individuals according to their contributions and pre-retirement incomes, but social pension benefits are generally fixed at the same level for all beneficiaries, either related to basic living costs or dictated by government budget constraints.
4. Benefit levels on social pensions are typically a tiny fraction of the benefits paid by regular pension schemes – their purpose is to provide a minimum level of protection against destitution and hunger rather than to maintain a pre-retirement standard of living.

Given these fundamental differences in function and design, it is debatable whether ‘pension’ is an appropriate label for cash transfers targeted at older citizens. In the terminology of social protection, contributory pension schemes provide ‘social insurance’ against a livelihood shock, but social pensions provide ‘social assistance’ to a category of people who are presumed to be poorer than others. Since many recipients of social pensions have not retired from formal employment – they might be farmers who continue farming even after receiving the pension, or they might have been unemployed for years before receiving the pension – total income in social pensioner households could even increase after they register for the programme.