Pension theft: how low can you go?

File picture: David Ritchie

File picture: David Ritchie

Published Apr 18, 2016


Illegal deductions from the accounts of Social Security Agency grant beneficiaries is rife, says consumer watchdog Georgina Crouth.

The parliamentary shenanigans of recent times have certainly been entertaining to watch on television, but they detract from the actual work that should be done in the country’s legislative body.

At Parliament, yet another opposition walkout from the chambers was overshadowed by a poignant moment when an IFP MP asked President Jacob Zuma what he intended to do about the illegal deductions from the accounts of Social Security Agency (Sassa) grant beneficiaries.

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Noting that the state pensioners seated in the gallery were there to get clarity on illegal deductions from their Sassa accounts, MP Liezl van der Merwe asked the president to establish a commission of inquiry to get to the root of the problem, “considering that reports of such deductions are on the increase and that the ministerial task team has been unable to resolve the ongoing concerns”.

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In Zuma’s response, he admitted the illegal deductions were on the increase, but that the task team set up to investigate the issue was sufficient: “(The) ministerial task team on deductions, comprising representatives from civil society, officials from the Department of Social Development and Sassa (seeks) to address the matter of deductions in general and to assist the social grants beneficiaries to report whenever there have been deductions from their accounts and to assist them find recourse.

“As a result, social grant beneficiaries do not have to seek recourse alone. They have the ministerial task team to help them.”

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“Over 13 000 cases of deductions have been reported to (the task team).

“It has assisted in the resolution of 10 500 of those cases and is busy addressing the approximately two thousand cases that are outstanding,” Zuma said.

“Other achievements include the development and implementation of the recourse mechanism; the publishing of the amended regulations in February 2016 for public comment; and the amendments to the Social Assistance Act which will be going to cabinet (this month) and Parliament thereafter.

“Other achievements (sic) include the support received from civil society in two major court cases with the insurance industry, with a third pending, and the tireless effort of committee members and their organisations to support grant beneficiaries on the ground to find recourse.”

But the problem is rife. Virginia Petersen, the chief executive of Sassa, believes that this matter is under-reported.

I’ve received a fair number of complaints myself – most recently, when Hettie Ellis and Estelle Vermeulen wrote: “We as Sassa pensioners are becoming desperate, as we do not know what to do.

“Every month for the past four months somebody has been deducting money from our pensions. We would appreciate it if you could appoint someone to investigate this matter. This is tantamount to fraud – stealing from old people.”

Something is clearly amiss because the deductions are made via EFT off social grant accounts, often without the knowledge or permission of the Sassa beneficiary.

And what makes the deductions even more worrying is the fact that the poorest of the poor are being prejudiced – particularly rural pensioners who are forced to pay transport costs to their nearest pay points to lodge disputes, often have no reliable cellphone or internet connection, and may not be in the position to check their statements regularly.

Legally, the only deduction which can be made from a social grant before it is paid is a single 10 percent debit for funeral insurance.

The Black Sash, which has been running its “Hands off our grants” campaign since 2013, said its attention was drawn to the problem by an NGO in the Upington / Keimoes area in October 2012.

The Black Sash’s advocacy manager Elroy Paulus explained: “In our view, the deductions are often without the permission of the beneficiary (which is fraud), in violation of the Social Assistance Act (a grant may not be transferred, ceded or encumbered) – that is, it cannot be used as collateral. These are airtime, electricity, loans, insurance – and a range of others.”

The Sassa accounts are offered free of monthly charges at most supermarkets (unless withdrawals are made via an ATM), though there have been some who experienced charges at some retail stores.

According to Sassa, once the money is transferred into a beneficiary’s personal bank account, they can then authorise deductions, like any account holder.

The Black Sash and civil society partners have a different view.

The payment system is managed by Cash Paymaster Services (a company owned by Net1) – a tender which the Constitutional Court declared invalid.

The recipients’ accounts are held by Grindrod Bank – which has a partnership with Cash Paymaster Services ’s holding company, Net1. And since Sassa has been unable to find a suitable bidder, as reported to the Constitutional Court, that tender will run until next year, which is when the agency will take over the grant payments.

The Black Sash approached the Reserve Bank to intervene by issuing a directive to the Payments Association of South Africa, BankServ and Grindrod to stop the debits, but Paulus told me: “In their view at the time (the Reserve Bank), did not think it warranted a directive. (Meanwhile, the debits) continue unabated and have actually increased.”

From next year, “the Social Assistance Regulations will be also be amended to block deductions on the Sassa payment card”, Sassa spokesman Kgomoco Diseko assured. Some of the deductions were ordered by members of the beneficiaries’ families or by fraudsters.

Social Development Minister Bathabile Dlamini set up a task team to investigate the problem in response to Black Sash’s campaign, which recommended that Sassa designs and implements a system to stop “unlawful and immoral debit deductions”, and to make sure the money is refunded to beneficiaries.

Sassa set up a payment dispute resolution mechanism, which thus far had limited success – and is being monitored by civil society. NGOs have received many complaints about the repayment process – with many beneficiaries saying they simply don’t receive their refunds.

I asked Diseko about Black Sash’s demand that the agency block and reverse any debit deductions that are not related to funeral policies as the deductions are illegal, but Diseko said it’s not that simple: “The challenge for Sassa is that not all deductions are illegal because some of them are initiated by the beneficiary.

“We can only stop a deduction after it has been reported and investigated. There should be proof that the deduction was unauthorised.”

Black Sash disagrees – it says the minister’s instruction was clear and should be complied with.

However, Diseko said Sassa only authorises funeral policy deductions from grant accounts – the debits are loaded by service providers. When I asked how long it takes for a dispute to be resolved, he said: “The money is refunded the in next payment cycle after the investigation has been concluded.”

About those refunds: the NGOs have said the refunds are not being made but Diseko insisted: “That generalisation is grossly untrue. People do get their refunds if they are genuine.”

He also assured me that the Sassa helpline was toll-free but when I checked on a pay-as-you-go number, the call was charged.

I then asked for details of how much has been paid out to claimants and how many claims are outstanding, but he hadn’t responded to my query by deadline.

Wise up

For any queries about grants, phone the Social Security Agency (Sassa) helpline number: 0800 601 011.

If you are having difficulty with your grant, contact the Black Sash helpline for free paralegal support and advice: 072 663 3739, or e-mail [email protected].

* Georgina Crouth is a consumer watchdog with serious bite. Write to her at [email protected]. Check out more helpful consumer tips and advice at [email protected]

** Follow Georgie on Twitter: @askgeorgie

Cape Argus

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