Task team to probe illegal lending to social grant beneficiaries

SOCIAL Development Minister Bathabile Dlamini has established a ministerial task team to investigate the problem of illegal lending to social grant beneficiaries.

Representatives from Black Sash, the department and the South African Security Agency (Sassa) would be included in the task team, the minister said in her budget vote speech in the National Assembly on Wednesday.

"During my visits to many poor rural and urban communities, I received many complaints from beneficiaries about various types of deductions, including loans, deductions from multiple funeral schemes, electricity and airtime from social grants payments, often without their knowledge or consent," Ms Dlamini said.

"According to the National Credit Regulator, illegal money lending is a huge and profitable business in South Africa. These lending businesses are for the most part illegal, predatory, immoral and exploitative in nature," Ms Dlamini said.

"Work is underway to introduce amendments to the social assistance regulations to prohibit credit providers and other persons from conducting and marketing their products within defined perimeters of Sassa offices and pay-points. Penalties for those who contravene these regulations will be introduced."

Action would also be taken, Ms Dlamini said, to prevent the commercial exploitation of the Sassa brand and to protect its intellectual property rights. "We will criminalise illegal possession of Sassa-branded cards by credit providers and loan sharks," she said.

The minister said she had also received numerous complaints regarding the implementation of the voice-biometric method of payment of social grants.

The complaints mainly related to the long toll free number, which made it difficult for most people to memorise, while some beneficiaries, particularly the older persons, could not remember their identity numbers. Sassa had been instructed to review the implementation of the system to remove the burden from the beneficiaries.

Ms Dlamini said she had also appointed a ministerial committee to advise on a future payment model for social assistance benefits. A preliminary report was expected to be submitted before the end of this month.

She said that the modernisation of the grant payment system had saved R2bn by end-September 2013 and resulted in the cancellation of 850,000 grants which should not have been on the system. In addition a saving of R1bn in unspent funds had been achieved by the end of the financial year in March.

A key feature of the current payment model is the institutionalisation of the biometric system, which offers many important benefits, both as a measure to combat fraud and corruption and as a more accurate and reliable means of beneficiary authentication.

A review of the 1997 White Paper on Social Welfare had highlighted the need to improve the accessibility and quality of social development services, the transformation and financing of welfare services and strengthening the workforce and funding of nongovernmental organisations in the sector.

The department had committed itself increase the number of social service professionals, particularly social workers. Government's ultimate goal was to ensure that there was one social worker per ward throughout the country,
starting with the 1,300 poorest wards.

More than 16-million social assistance grants are paid monthly, though Ms Dlamini said that the take-up rate for the child support grant for infants from birth to two years was low.

"This is a serious concern for us because early intervention yields better outcomes for children," she said. "We plan to increase the take-up rate in this group by 70 % through the implementation of various initiatives."

A ministerial committee would also be established to undertake an assessment of the status of foster care system throughout the country. The target was to assess 500,000 foster care cases.

"Our ultimate aim is to ensure that no child falls through the cracks as a result of administrative processes," she said.


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