South Africa: Minister Bathabile Dlamini – Amendment of Social Assistance Act Media Briefing

Statement by the Minister of Social Development, Ms Bathabile Dlamini, during Amendment of Social Assistance Act media briefing in Parliament, Cape Town

Programme Director,

Deputy Minister of Social Development, Mrs Hendrietta Bogopane-Zulu;

Acting Director-General of Social Development, Mr Thokozani Magwaza;

Acting CEO of SASSA, Ms Raphahle Ramokgopa;

Acting Deputy Director-General of Comprehensive Social Security, Mr Brenton van Vrede;

Ladies and gentlemen of the media

Good morning!

Thank you very much for being part of this media briefing. We are hosting this briefing to inform South Africans about amendments to one of the most important pieces of legislation – the Social Assistance Act.

Cabinet reviewed a proposal from the Department of Social Development for Amendments to the Social Assistance Act and approved its release for public comment.

These amendments include, amongst others, changes to the administration of social grants which will improve the efficiency of the Appeals process and the operationalisation of the Inspectorate for Social Assistance.

The amendments also seek to establish a supplementary benefits fund; which will enable government to provide funeral benefits to the elderly and a savings vehicle for caregivers of children with the aim of linking social grants to developmental activities.

The amendments also allow the Ministers of Social Development and Finance to make additional payments for certain social grants. This will enable the introduction of the policy approved by Cabinet in December 2015 for the payment of additional amounts for the Child Support Grant to orphans and children in child headed households.

On the administration front, as mentioned, the amendment Bill provides for efficiency improvements in the management of appeals and for the setting up of the Inspectorate as an independent unit.

However, I am aware that everyone is interested in how our Social Development entity, South African Social Security Agency (SASSA), will be paying social grants from April next year at the end of the current contract with Cash Paymaster Services (CPS).

Programme Director

It is on record that SASSA has been paying grants for more than a decade now and before then the Department of Social Development for more than two decades. This is not the first time a contract comes to an end.

For the first time, so much hype has been created in the public space about the system and this pose unnecessary challenges as it affects the market and the confidence of potential suppliers. Over the last Five years; SASSA has been planning to implement a new payment system which it will have more control over.

In the contrary, SASSA has experienced a number of setbacks through court challenges and various other forms of interference. In 2014, SASSA made attempts of issuing a new payment contract but a potential bidder tried to influence the tender specifications through the courts.

What is happening now is an unprecedented amount of requests and media opinions trying to either gain information about payment specifications before SASSA releases it to the market. This includes leaked information that jeopardises procurement and continuous questions to undermine government’s ability to deliver the service which destroys supplier confidence. This unfortunately creates many challenges.

I am confident that the new CEO of SASSA will be up to the task and walk on the foundation that was laid by Dr Virginia Peterson. We are also confident that the transitional process will run smooth.

Members of the media

The Appeals Tribunal

The current appeals process in the Social Assistance Act provides for an administrative review of the decision within SASSA. This is causing unnecessary delays in accessing the right to appeal in relation to social grants and delayed access to administrative justice.

In the current process, if someone is not happy with the outcome of their grant application they need to first approach SASSA within 90 days to request them to reconsider their decision. SASSA also has 90 days to respond.

If the appellant is still not happy; they can appeal to the Independent Tribunal for Social Assistance Appeals within 90 days and the Tribunal then has another 90 days to adjudicate the appeal. This is almost a year.

The reason for this initial internal mechanism for reconsidering applications within SASSA was to limit the envisaged errors which could have been made by SASSA staff. SASSA has however improved their administration system significantly and has many built-in quality control checks and balances.

Hence there is no longer a need for this potential six month delay before SASSA can lodge an appeal. The Amendment Bill proposes that a person will; immediately after receiving a decision from SASSA relating to their grant application; be able to directly lodge an appeal with the Independent Tribunal within a period of 90 days from the date of SASSA’s decision.

There are examples of appeals taking up to 18 months to be finalised mainly as a result of poor exchange of documents between SASSA and the Tribunal. The amendment Bill now sets clear standards that these documents need to be submitted to SASSA within 30 days of the Tribunal’ request.

As a result, the Tribunal has 60 days to adjudicate the appeal and this will allow us to hold each entity accountable without pointing fingers.

Fellow South Africans

The Inspectorate

The Inspectorate is going to look into number of fraud and corruption cases over the last three years at SASSA indicates an entrenched endeavour by people inside and outside the entity to defraud the grants system.

The grants administration system is currently plagued by illegal deductions, involvement of SASSA officials in fraudulent activities, unethical conduct of health practitioners who deliberately recommend disability grant applicants to be disabled for disability grants and officials accepting cash to approve grants.

The significant number of grant beneficiaries complain about poor service delivery at local SASSA offices claiming that the elderly are often neglected. The anti-fraud function has been performed by the Special Investigations Unit in the past and more recently by SASSA.

The establishment of the Inspectorate as an independent entity will provide an improved level of oversight as well as governance over the social assistance function because SASSA cannot be a player and a referee.

The Inspectorate will have a specific mandate in terms of the Social Assistance Act to conduct investigations. It will further ensure that there is maintenance of the integrity of the social assistance frameworks and systems, execution of internal financial audits and audits on compliance by the South African Social Security Agency (SASSA).

This will be done through regulatory, policy measures and instruments, investigation of fraud, corruption and other forms of financial and service mismanagement including criminal activity, within SASSA and in connection with its functions, duties and operations.

On the policy front, the amendment Bill introduces a new Supplementary Benefits Fund and the ability for grant values to be increased for certain categories of beneficiaries.

Ladies and gentlemen

Supplementary Benefits Fund

The Supplementary Benefit Funds will focus on funeral benefits. Lack of death and funeral as social security benefits has left social grant beneficiaries vulnerable to exploitative and predatory practices by private insurance providers. Private insurance companies are often unable to properly calculate the risks in low income markets and do not have the scale to pool these risks adequately.

Insurance for low income earners is based on a high risk profile with corresponding high premiums. Funeral costs are amongst the highest expense for low income earners. Most poor South Africans are unprepared for the eventuality of death. Households without adequate coverage occasionally resort to loans and sell productive assets to cover these expenses.

Family members may also be unaware of an existing cover and do not claim benefits. Older persons are not always aware of the underwriter and do not know who to approach when they experience problems.

There is also bad conduct of financial service providers or their brokers. Beneficiaries are sold multiple products under the understanding that it is a SASSA benefit. We have evidence that some brokers have even put SASSA logos on their cars when selling their products.

The South African Reserve Bank also requested us to reconsider the preferential deduction facility we provide through Regulation 26A; which to some extent encourage this behaviour.

The introduction of a Supplementary Benefits Fund provides a vehicle for government to provide additional benefits such as funeral benefits and any other benefit linked to the beneficiary linked benefits.

The actual benefits levels will be determined between the Minister of Social Development and Finance at the time of implementation and annually, as it is with the grants. This will also enable the provision of saving products.

It will also allow government to expand its current investment in children through the Child Support Grant (CSG), Early Childhood Development (ECD), schooling and other services. Currently, the CSG ends at the age of 18 years and the youth often find it difficult to navigate other forms of government support.

Small savings fund can greatly assist during this time and it will to some extent reduce the vulnerability of the youth; in particular the young women who may be affected by abuse to meet the basic necessities of life.

Programme Director

Additional grant payments

In December 2015, Cabinet approved the policy proposal to increase the value of the CSG for orphans and children in child-headed households (CHH) in line with the medium terms strategic framework of Government. This amendment Bill seeks to provide a legislative framework for the implementation of this policy.

Extended families caring for orphans have to take on additional responsibility often with limited resources. The central objective of the policy is to provide social assistance for poor children who are orphaned and living with family members and children living in child-headed households.

The policy proposes a higher value for CSG, which may be determined by the Minister of Social Development in agreement with the Minister of Finance from time to time. This is not a new grant but builds on the success of the existing CSG.

This proposed provision in this policy would require neither a court process nor the associated heavy social work process for placement. However, in order to ensure adequate care and protection; social workers may still need to monitor and serve these families depending on available resources.

By increasing the value the of the CSG to orphans; government can provide greater income support to all orphans and not only for those fortunate enough to access the foster care system.

Such increased value would reduce the administrative burden on the state as it is easier to administer Child Support Grant as opposed to the Foster Child Grant.

It is anticipated that this provision will address poverty and build human capital amongst these two categories of children. This is in line with the National Development Plan (NDP) and Outcome 13 of the Medium Term Strategic Framework, including South Africa’s regional and international objectives.

I thank you.

Source: Department of Social Development.

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