Welfare fraud costs SA R191-million

By Time of article published May 20, 2010

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By XOLANI MBANJWA Political Bureau

Teachers, nurses, policemen and soldiers are among 13 000 public servants and civilians who have been convicted of swindling the state out of R191.3 million through fraudulent welfare-grant claims.

Social Development Minister Edna Molewa said that, of the 13 145 people convicted so far, 7 829 were public servants and 5 316 were civilians.

Molewa's spokesman, Mandla Mathebula, said they had repaid at least R56m of the defrauded amount.

Mathebula said many of those who had been found guilty in court had been sentenced to a year in prison, suspended for five years.

All had been forced to sign "acknowledgment-of-debt agreements" with the department.

"Most of the public servants supplied false information when they applied for social grants.

"They are employed in various departments, such as health, education, the South African Police Service, the South African National Defence Force and the social welfare department. Some were junior clerks, managers and assistant directors.

"All of them are still paying back the money," he said.

Some of the public servants had been fired, but Mathebula said he could not provide details.

The department intended to recover the entire R191.3m.

In a written reply to a Parliamentary question, Molewa said her department had introduced measures to verify grant applications, including visiting applicants' homes before and after they were approved.

Molewa told Parliament earlier this year that 14 million people received financial help in the form of pensions, disability allowances, military-veterans' and child-support grants.

Such grants made up 93 percent of the department's entire expenditure, totalling R89.4 billion last year, Molewa said.

Mathebula said the department was also working hard to encourage grant recipients to open bank accounts rather than receive money through "expensive" service providers.

Molewa said that banks charged the department lower rates for welfare transactions compared to those charged by service providers.

Replying to a question from ID leader Patricia de Lille, Molewa said the department paid Standard Bank and First National Bank R13.68 and R15.50 respectively for each social welfare transaction made through those banks.

This is in stark contrast to the R35.91 charged by Cash Payment Services, R23.80 by AllPay, R17.50 by Sekulula, R20.42 by the Regional Post Office and R35.92 by Empilweni - all of which had contracts with the department to pay out social grants.

"We are encouraging social grant beneficiaries to open bank accounts so that we can do electronic transfers because the department is spending a lot of money on service providers who pay these grants out on our behalf," said Mathebula.

Although the department could not force people to open bank accounts, it would save millions of rands if beneficiaries received their grants through the banks, he said.

But in her Parliamentary reply, Molewa defended the cost of transactions made through service providers contracted by her department. She said they had to go to "terrains" in rural locations to pay out grants to beneficiaries.

"Some provinces have more rural locations and are not easily accessible, compared to urban locations where access is fairly easy," said Molewa.

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