This comes amid uncertainty over Sassa’s plans as the contract with Cash Paymaster Services (CPS) to administer R10 billion in monthly grants expires at the end of March.
Sassa spokesman Kgomoco Diseko declined to give details, and said a media conference was scheduled to take place before the end of the month. However, Sassa and the department assured Parliament’s portfolio committee on social development in November that grant beneficiaries would continue to be paid from April 1.
In April 2014, the Constitutional Court declared the present CPS-Sassa contract for the payment of social grants invalid. During the presentation to the parliamentary portfolio committee, Sassa spoke of long-term plans, including two options for a fully insourced system, and for ending all deductions including loans from the Sassa accounts.
“In the short term, however, this does not address the scourge of unauthorised, fraudulent and unlawful deductions, which we continue to witness. It is imperative that unsecured deductions for airtime, electricity and water must end immediately. Automatic transfers to the EasyPay Everywhere bank account without a mandate to Sassa must stop effective from March 31, 2017,” the Black Sash said in a statement.
Despite this, social grant beneficiaries formed long queues at the company’s subsidiary, Net1, to apply for unsecured loans.
They said they needed the money to buy stationery and school books for their children and grandchildren as the money they received was not enough to meet monthly household expenses.
Most recipients admitted that it was not their first time applying for oans, but were concerned that it was difficult to get out of the “debt trap”.
Although no interest is charged on these loans, the deductions are made to cover service fees and these can add up to 50% of the principal amount over a six-month period. Repayments are deducted before the grant reaches the recipient.
The Social Assistance Act states that a grant cannot be “transferred, ceded, pledged or in any other way encumbered or disposed of”. The only legal deduction is for one funeral deduction a month to a maximum of 10% of the grant value.
The Credit Ombud said granting credit was set out in the National Credit Act, which states that consumers have the right to apply for credit, and if they met the criteria, credit could be granted.