Minister accuses insurers of ‘exploitation’

By Janice Roberts

Social Development Minister Bathabile Dlamini has accused insurers of what she termed ‘exploitation.”  In her budget vote speech to the National Assembly in Cape Town this week, she said the country faced “a huge challenge with deductions on social grants”.

The minister added that these deductions were eroding the value and impact of social grants “in addressing the deep levels of poverty and inequality in our society.”

“We have witnessed high levels of unacceptable practice of illegal, immoral and unauthorised deductions of money from all grant types for services ranging from airtime, water, loans and funeral policies.

“We published revised Regulations to the Social Assistance Act for public comment in February this year, which will deal with this practice. The department has considered all the comments and made some revisions to the Regulations. These revisions will be published this week.”

Dlamini said the Ministerial Task Team on Deductions would continue to monitor these practices and ensure that deductions were ultimately brought to an end.

“The absence of a funeral benefit has opened our social grant beneficiaries to exploitation by private insurance companies,” she added.

“The lack of government action to protect them has led to a very loud outcry by our beneficiaries and various civil society organisations. We intend to introduce legislation into Parliament during this current financial year, for the establishment of a funeral benefits fund.”

The Minister added that this year marked 10 years since the establishment of the South Africa Social Security Agency (SASSA).

“The agency has earned world recognition for transforming a fragmented social assistance payment system into a single and effective grant payment system. Since its inception in April 2006, the agency has been at the forefront of our efforts to provide a safety net to the most vulnerable members of our society.

“As reaffirmed by the Ministerial Advisory Committee, SASSA is taking over the management and control of the payment process that is currently performed by a third party, from 1 April 2017. The intention is to have a single payment platform, which will facilitate the payment of Social Assistance through multiple channels.”

Insourcing the payment processes would ensure that SASSA was in control of the entire operational value chain. “This will further improve the delivery of our services.”

Regulations currently state that SASSA may permit deductions for funeral insurance to be made directly from social grants where the beneficiary requests the deduction in writing.

SASSA can grant one deduction for a funeral insurance scheme, not exceeding 10% of the value of the beneficiary’s grant.

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