South African Social Security Agency

Last updated

The South African Social Security Agency (SASSA) is a national agency of the South African government created in April 2005 to administer South Africa's social security system, including by distributing social grants, on behalf of the Department of Social Development (DSD). It is under the oversight, but not the operational control, of DSD and the Ministry of Social Development. [1] Established in terms of the Social Assistance Act of 2004 and South African Social Security Agency Act of 2004, SASSA is a public entity in terms of Schedule 3A of the Public Finance Management Act. [2] As of 2022 its chief executive officer was Busisiwe Memela-Khambula. [3]

Contents

SASSA was founded in 2005 to centralise the provision of social security assistance, formerly a primarily provincial function, in order to reduce corruption and improve service delivery. [4] It was closely modelled on its Australian counterpart, Centrelink. [4] Its key functions relate to the administration and payment of social grants, which support a large proportion of the South African population: in 2022, 46% of South Africans received a social grant. [5] SASSA's functions including processing applications for social security assistance, verifying and approving applications, disbursing and paying the grants to eligible beneficiaries, and preventing and detecting fraud. [2] SASSA employs biometric technology, including fingerprint and facial recognition, to verify the identity of beneficiaries. This helps ensure that the grants reach the intended recipients and reduce the risk of identity theft and fraud.

Types of grants

The social assistance disbursed by SASSA takes the form of various grants; most of them are means-tested and paid in cash on a monthly basis. These are the Child Support Grant, the Care Dependency Grant, the Foster Child Grant, the Disability Grant, the Grant-in-Aid, the Older Person's Grant (an old-age pension), and the War Veteran's Grant. [6] A special case is the three-month Social Relief of Distress Grant, which provides immediate temporary assistance in the form of vouchers, food parcels, or cash. [6] The temporary Covid-19 Social Relief of Distress grant was introduced in May 2020 during the Covid-19 pandemic; [7] in October 2022, Enoch Godongwana, the Minister of Finance, announced that it would be extended to remain in place until March 2024. [8]

In 2015, of the R155.3 billion given in social welfare, R53.5 billion went to pensioners, R47.8 billion to Child Support Grants, R20.2 billion to Disability Grants, and R8.5 billion for other grants, with the remainder spent on management and administration. [9]

SASSA announced that all grants would be increased from 1 April 2023. The Older Persons Grant will be increased to R2080 (for recipients between 60 and 74) and R2100 (for recipients over 75 years old).

Recipients of the Disability Grant and the Care Dependency Grant will be increased to R2080, while the Child Support Grant will be increased to R500 (with the top-up increasing to R250).

The Foster Child grant will increase to R1120, with the War Veteran grant increasing to R2100 and lastly, the Grant-In-Aid increasing to R500.

Further SASSA Grants Payment has been increased from 1 October 2023.

The SRD Grant remains at R350 and is being extended until 31 March 2024.

SASSA R350 grant is designed to help unemployed South African between the age of 18–59 years with no source of income.

SASSA aims to eliminate long queues at its local offices across the country, so that beneficiaries can check payment dates and application status online, SASSA ensures smooth experience when applying for their Social Grants.

Operation

In January 2012, Cash Paymaster Services (CPS), a subsidiary of Net1 UEPS Technologies, was awarded a five-year, R10 billion tender to distribute social grants on behalf of SASSA from February 2012. [9] [10] A rival bidder, AllPay, challenged the procurement process in court; in 2014, in AllPay v CEO of SASSA , the Constitutional Court found that irregular processes had been followed, and consequently declared the tender invalid, but suspended the order in order not to interrupt grant payments, and to allow SASSA an opportunity to initiate a new tender process. [11] [12]

Each month, the National Treasury deposits the total amount to be paid out into a Nedbank trust account. Interest earned during this period goes to the state. All beneficiary accounts are held at Grindrod Bank. [9]

A grant recipient can withdraw their grant from any SASSA paypoint across the country, which carries no withdrawal charge, and which Net1 CEO Serge Belamont claims is more secure because of the biometric security checks on fingerprints; or from designated retailers such as Pick n Pay, which work with EasyPay, another company owned by Net1, to allow these withdrawals; or from ATMs. [9]

Moneyline, another Net1 company, provides loans to grant recipients. Umoya Manje, also another company owned by Net1, allows grant beneficiaries to buy cellphone airtime on credit. [9]

Grants crisis

In December 2014, a ministerial task team concluded that SASSA itself should take over the paying out of grants. [13] In 2015, SASSA issued a new tender but did not award it, [9] opting instead to insource the disbursement of grants by 2017. [14]

In the 2015/2016 financial year, SASSA recorded additional, irregular expenditure on the CPS contract for the re-registration of grant beneficiaries because legal requirements had been circumvented. [15]

The then Finance Minister, Pravin Gordhan advised the Minister of Social Development Bathabile Dlamini to award a new contract to commercial South African banks and the South African Post Office (SAPO), [14] and forego biometric identification, which contract requirement disadvantaged others bidders against CPS. However, this proposal was rejected on the grounds that the biometric system had eliminated fraudulent claims amounting to R2 billion annually; [16] that further work to remove duplicate entries could save another R2 billion annually; and that SAPO did not have a banking licence, nor enough post offices to properly distribute grants. [11] [15] Dlamini expressed a desire to remain with CPS until SASSA was capable to take over, reasoning that this posed the least risk of SASSA defaulting on grant payments. [12] She claimed that the process to distribute grants through SASSA was well underway, insisting that the Department was halfway through a four-phase plan which would culminate in 2019 with the handing over of the responsibility to SASSA. [13]

Dlamini claimed in 2017 that she had only become aware in October 2016 that SASSA was likely to be unable to take over grants payments from April 2017. [15]

SASSA estimated it would pay CPS about R3.5 billion annually under a renewed contract, between 52% and 59% more than it already did. SASSA later denied that it had done such estimation, and then claimed that it was a simple inflation-related adjustment, which was not true. [17] [18]

Dlamini had been advised in October 2016 that the DSD was obliged to engage in competitive tendering, and could therefore not sign a contract with CPS; she was informed that the grants crisis was also not a justification to continue using CPS, since the emergency had been self-created; and she also received a legal opinion from senior counsel Wim Trengove that the extant CPS contract could not be legally extended since it had already been ruled invalid by the Constitutional Court. [17]

In December 2016, SASSA was also advised to inform the Constitutional Court of its predicament, "that it faced the highly irregular prospect of going into contract for another year with [CPS]". The Agency waited until 28 February 2017 to lodge a plea, which it immediately withdrew the next day, using a letter dated the previous day. [18]

In February 2017, SASSA told Parliament's social development portfolio committee it had come up short in attempts to find working solutions to pay social grants, and claimed that the only way to make social grant payments from April was to stick with the service provider whose contract had been declared invalid. [14] [19]

SASSA's Zodwa Mvulane told Parliament in March 2017 that they "only had a year, from September 2015, to prepare for being a paymaster". However, SASSA only began preparations in December, and it had until then been ignored for years. While SASSA told Parliament it had not had enough time, it had also claimed before the Constitutional Court that it would not need CPS a year after the 2017/2018 financial year—contradicting a letter by Dlamini, sent on 2 February, that stated CPS would no longer be needed at the end of 2019, and another letter sent a week later by SASSA chief executive Thokozani Magwaza, which claimed that the contract with CPS would only last until November 2018—both longer than a year. [18]

The Black Sash Trust, through representation by the Centre for Applied Legal Studies, launched an application to the Constitutional Court, asking it to compel Dlamini and SASSA to take necessary measures to ensure the social grants system and its beneficiaries were protected when the CPS contract ended on 31 March. [10] On 6 March 2017, the contract with Cash Paymaster Services was renewed, and the Constitutional Court's order of invalidity with regard to that contract again suspended, for another year. The Court held that no party had “any claim to profit from the threatened invasion of people’s rights” but also understood that CPS could not be expected to deliver grants at a loss; it therefore ordered CPS to continue to deliver social grants at the same price it had contracted for in 2012. [20]

The Constitutional Court found that "the responsible functionaries of SASSA" had been aware from April 2016 that they could not comply with their undertaking to the Court previously that they would be able to pay social grants from 1 April 2017. [20] The Constitutional Court held Dlamini primarily responsible for the crisis, [21] with Chief Justice Mogoeng Mogoeng saying there was no explanation for the incompetence displayed by her and SASSA. [22] According to constitutional scholar Pierre de Vos, the Constitutional Court had concluded that SASSA and Dlamini could not be trusted to do their constitutionally mandated job to ensure delivery of social grants, and could not be trusted not to lie to the courts in the future. [20]

Between 2013 and 2017, the DSD spent R30 million on the costs of legal appeals involving SASSA. [23]

Unauthorised deductions

In 2004, the DSD amended the Social Assistance Act in order to disallow anyone other than the beneficiary to deduct money from their account. [10] [15]

However, 10,262 complaints about deductions were made between April 2015 and March 2016, and the DSD itself claimed "for the past two to three years" to have been fighting illegal deductions from social grants. [24] Many of the unauthorised deductions were claimed by CPS to be repayment of non-existent Moneyline loans, [1] [25] and sales of airtime and electricity. [24]

In June 2016, SASSA, the Black Sash, and the Association of Community Advice Office (ACAOSA) laid criminal charges against the directors of CPS and Grindrod Bank, claiming that the two companies were not implementing amended regulations under the Social Assistance Act, which amendments compelled companies not to deduct money from social grant beneficiary accounts for financial services. [24] The criminal charges were frozen until October, when Net1 was to receive clarity from a High Court as to regulations. [26] In a founding affidavit lodged with the North Gauteng High Court, Black Sash asked the court to ring-fence social grant accounts in order to protect grant beneficiaries from exploitation or abuse, and to prevent companies from soliciting beneficiaries around SASSA paypoints [27] —practices which Black Sash and the DSD accused Net1 and its subsidiaries of encouraging. [28]

Mass Fraud Allegations

In October 2024, 2 Stellenbosch University students came forward claiming that there was mass fraud among the youths ID numbers which were being used to collect SASSA SRD R370 grants. [29] [30]

In a on campus random survey of 60 people, 56 people were found to have fraudulent SASSA SRD applications. [31] They further stated that they tested all possible ID numbers of people born in February 2005 and that there was a 91% application rate, far exceeding the current youth unemployment rate of 60%. [32] [33] [34] [35]

In Parliament, the minister of Social Development gave SASSA 30 days to investigate this matter. [36]

Related Research Articles

<span class="mw-page-title-main">False Claims Act of 1863</span> United States federal anti-fraud law

The False Claims Act of 1863 (FCA) is an American federal law that imposes liability on persons and companies who defraud governmental programs. It is the federal government's primary litigation tool in combating fraud against the government. The law includes a qui tam provision that allows people who are not affiliated with the government, called "relators" under the law, to file actions on behalf of the government. This is informally called "whistleblowing", especially when the relator is employed by the organization accused in the suit. Persons filing actions under the Act stand to receive a portion of any recovered damages.

<span class="mw-page-title-main">Social Security (United States)</span> American retirement system

In the United States, Social Security is the commonly used term for the federal Old-Age, Survivors, and Disability Insurance (OASDI) program and is administered by the Social Security Administration (SSA). The Social Security Act was passed in 1935, and the existing version of the Act, as amended, encompasses several social welfare and social insurance programs.

<span class="mw-page-title-main">Life insurance</span> Type of contract

Life insurance is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of an insured person. Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The policyholder typically pays a premium, either regularly or as one lump sum. The benefits may include other expenses, such as funeral expenses.

Guaranteed minimum income (GMI), also called minimum income, is a social-welfare system that guarantees all citizens or families an income sufficient to live on, provided that certain eligibility conditions are met, typically: citizenship and that the person in question does not already receive a minimum level of income to live on.

<span class="mw-page-title-main">Chicago Public Schools</span> Public school system of the municipal government of Chicago, Illinois

Chicago Public Schools (CPS), officially classified as City of Chicago School District #299 for funding and districting reasons, in Chicago, Illinois, is the fourth-largest school district in the United States, after New York, Los Angeles, and Miami-Dade County. For the 2023–24 school year, CPS reported overseeing 634 schools, including 477 elementary schools and 157 high schools; of which 514 were district-run, 111 were charter schools, 7 were contract schools and 2 were SAFE schools. The district serves 323,251 students. Chicago Public School students attend a particular school based on their area of residence, except for charter, magnet, and selective enrollment schools.

Vodacom Group Limited is a South African mobile communications company, providing voice, messaging, data and converged services to over 130 million customers across Africa. From its roots in South Africa, Vodacom has grown its operations to include networks in Tanzania, the Democratic Republic of the Congo, Mozambique, and Lesotho, and provides business services to customers in over 32 African countries, including Nigeria, Zambia, Angola, Kenya, Ghana, Côte d'Ivoire, and Cameroon.

<span class="mw-page-title-main">Crime in South Africa</span>

Crime in South Africa includes all violent and non-violent crimes that take place in the country of South Africa, or otherwise within its jurisdiction. When compared to other countries, South Africa has notably high rates of violent crime and has a reputation for consistently having one of the highest murder rates in the world. The country also experiences high rates of organised crime relative to other countries.

<span class="mw-page-title-main">Corruption in Nigeria</span>

Corruption is an anti-social attitude awarding improper privileges contrary to legal and moral norms and impairs the authorities' capacity to secure the welfare of all citizens. Corruption in Nigeria is a constant phenomenon. In 2012, Nigeria was estimated to have lost over $400 billion to corruption since its independence.

Medicare Advantage is a type of health plan offered by private companies which was established by the Balanced Budget Act (BBA) in 1997. This created a private insurance option that wraps around traditional Medicare. Medicare Advantage plans may fill some coverage gaps and offer alternative coverage options in an attempt to make them appear more attractive to the subscriber as compared to traditional Medicare.

<span class="mw-page-title-main">Bathabile Dlamini</span> South African politician (born 1962)

Bathabile Dlamini is a South African politician who was the President of the African National Congress (ANC) Women's League from 2015 to 2022. She was previously the Minister in the Presidency for Women from 2018 to 2019 and the Minister of Social Development from 2010 to 2018.

Biometrics are used by the South African government to combat fraud and corruption and to increase the efficiency of service delivery to the public.

The Simandou mine is a large iron ore mine which is tied to one of the biggest mining corruptions in modern history. The mine is located in the Simandou mountain range of southern Guinea's Nzérékoré Region. Simandou represents one of the largest iron ore reserves in the world, having estimated reserves of 2.4 billion tonnes of ore grading 65% iron metal.

<span class="mw-page-title-main">Welfare fraud</span> Form of illegally using state welfare systems

Welfare fraud is the act of illegally using state welfare systems by knowingly withholding or giving information to obtain more funds than would otherwise be allocated.

Unaoil is a Monaco based company which provides "industrial solutions to the energy sector in the Middle East, Central Asia and Africa." Unaoil is incorporated in the British Virgin Islands, a tax haven with an opaque banking system.

<span class="mw-page-title-main">Pule Mabe</span> South African politician (born 1980)

Puleng Peter "Pule" Mabe is a South African politician who served as the national spokesperson of the African National Congress (ANC), South Africa's governing party, from 2018 to 2023. He formerly represented the ANC in the National Assembly from 2014 to 2017.

South Africa has one of the most extensive social welfare systems among developing countries in the world. In 2019, an estimated 18 million people received some form of social grant provided by the government.

Lesaka Technologies is a South-African financial technology company that is listed on the NASDAQ and Johannesburg Stock Exchange. Lesaka’s primary focus is on financial inclusion, offering financial services to previously underserved communities and merchants.

Sibongile Pearm Tsoleli is a South African politician currently serving as an African National Congress councillor in the Mangaung Metropolitan Municipality. She also serves in the Mayoral Committee of acting Mangaung mayor Gregory Nthatisi as the Member of the Mayoral Committee (MMC) for Public Safety. Tsoleli had previously served in the Free State Provincial Legislature and in the National Assembly of South Africa.

AllPay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social Security Agency and Others is the name of three related decisions of the Constitutional Court of South Africa, handed down in 2013, 2014, and 2015 respectively. The decisions led to the invalidation of an irregular contract between the South African Social Security Agency and Cash Paymaster Services for the administration of social grants nationwide, precipitating the grants crisis of 2017. Litigation continued in Black Sash v Minister of Social Development.

References

  1. 1 2 Maregele, Barbara (2016-03-07). "Sassa shows "contempt" for poor – Social Development". Ground Up. Retrieved 2017-05-10.
  2. 1 2 "Public entities and statutory bodies". Department of Social Development. 2008-09-25. Retrieved 2017-05-09.
  3. ↑ "Chief Executive Officer". SASSA. Retrieved 2022-12-15.
  4. 1 2 Reddy, Trusha (2008). Corruption and Social Grants in South Africa. Institute for Security Studies. pp. 47–54. ISBN   978-1-920114-54-1.
  5. ↑ Human, Liezl (2022-02-23). "Finance Minister announces 2022 social grant increases". GroundUp News. Retrieved 2022-12-15.
  6. 1 2 "Everything you need to know about social grants". GroundUp News. 2022. Retrieved 2022-12-15.
  7. ↑ Köhler, Tim; Bhorat, Haroon (2020-11-20). "Lockdown economics in South Africa: Social assistance and the Ramaphosa stimulus package". Brookings. Retrieved 2022-12-15.
  8. ↑ Magubane, Khulekani (2 October 2022). "SRD grant extended for another year, but solution must be found, says Godongwana". News24. Retrieved 2022-12-15.
  9. 1 2 3 4 5 6 "Spotlight on social grants: How the system works". Ground Up. 2015-10-07. Retrieved 2017-05-10.
  10. 1 2 3 Mzekandaba, Simnikiwe (2017-03-01). "SASSA fails to get affairs in order". ITWeb Technology News. Retrieved 2017-05-07.
  11. 1 2 Gallens, Mahlatse (2017-02-16). "Dlamini rejects Gordhan's social grants proposal". News24. Retrieved 2017-05-06.
  12. 1 2 "Minister & SASSA on readiness to implement Constitutional Court ruling". Parliamentary Monitoring Group. 2017-02-22.
  13. 1 2 "Sassa changes its tune: No deal yet with CPS". The Citizen. 2017-03-05. Retrieved 2017-05-07.
  14. 1 2 3 Mzekandaba, Simnikiwe (2017-02-17). "Social grants conundrum continues". ITWeb Technology News. Retrieved 2017-05-06.
  15. 1 2 3 4 October, Alicestine (2017-03-09). "10 things to note about the Sassa crisis". CityPress. Retrieved 2017-05-06.
  16. ↑ Ndaba, Baldwin (2015-02-15). "Gordhan, Dlamini square off on grants issue". Independent Online. Retrieved 2017-05-06.
  17. 1 2 Wet, Phillip de (2014-03-05). "Minister Dlamini: Sassa crisis? That's a media invention". The M&G Online. Retrieved 2017-05-08.
  18. 1 2 3 Wet, Phillip de (2017-03-03). "A litany of lies: Sassa's greatest hits". The M&G Online. Retrieved 2017-05-08.
  19. ↑ "Sassa faces yet another glitch". eNCA. 2017-02-01. Retrieved 2017-05-06.
  20. 1 2 3 de Vos, Pierre (2017-03-17). "Sassa grant crisis: In this game of thrones, can Social Development Minister Bathabile Dlamini survive?". The Daily Maverick. Retrieved 2017-05-08.
  21. ↑ Quintal, Genevieve (2017-03-17). "Dlamini responsible for social grants crisis, says Constitutional Court". Business Day Live. Archived from the original on 2017-03-17. Retrieved 2017-05-09.
  22. ↑ Chabalala, Jeanette; Raborife, Mpho (2017-03-15). "No explanation for Sassa, Dlamini's 'incompetence' - Mogoeng". News24. Retrieved 2017-05-09.
  23. ↑ Dentlinger, Lindsay (2017-04-13). "Social Development Dept spent R30m on legal costs since 2013". Eyewitness News. Retrieved 2017-05-03.
  24. 1 2 3 Damba-Hendrik, Nombulelo (2016-06-21). "I cry every month for my money, says pensioner". Ground Up. Retrieved 2017-05-10.
  25. ↑ Maregele, Barbara (2016-03-15). "Social grants: deductions are getting out of hand, says Black Sash". Ground Up. Retrieved 2017-05-10.
  26. ↑ "SASSA criminal charges against Net1 frozen". Ground Up. 2016-06-29. Retrieved 2017-05-10.
  27. ↑ Dasnois, Alide (2016-08-15). "R4,000 taken from 89-year-old's pension for a loan he never took out". Ground Up. Retrieved 2017-05-10.
  28. ↑ Gonstana, Mary-Anne (2016-09-09). "Mother of three left with R20 a month after illegal deductions from her social grant". Ground Up. Retrieved 2017-05-10.
  29. ↑ Gosai, Joel Cedras and Veer (2024-10-14). "We discovered massive fraud in SASSA's grant system". GroundUp News. Retrieved 2024-10-28.
  30. ↑ Ndenze, Babalo. "Minister Tolashe instructs SASSA to investigate alleged R350 SRD grants fraud". EWN. Retrieved 2024-10-28.
  31. ↑ Gosai, Joel Cedras and Veer (2024-10-14). "Reboot needed after huge fraud discovered in Sassa's Social Relief of Distress grant system". Daily Maverick. Retrieved 2024-10-28.
  32. ↑ "SASSA corruption | Students' investigation points to large-scale fraud - eNCA". www.enca.com. 2024-10-25. Retrieved 2024-10-28.
  33. ↑ Seeletsa, Molefe (2024-10-24). "'List of Sassa failures are endless': Calls for SIU probe into alleged fraud and corruption". The Citizen. Retrieved 2024-10-28.
  34. ↑ "Students who exposed SASSA fraud urge overhaul of grant system". Jacaranda FM. Retrieved 2024-10-28.
  35. ↑ Gosai, Joel Cedras and Veer (2024-10-18). "Social grant fraud: SASSA needs to act, not deny". GroundUp News. Retrieved 2024-10-28.
  36. ↑ "SASSA hearing".
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.