Sassa offices in Cape Town. Photo: Masixole Feni
6 December 2016
The Department of Social Development is considering paying funeral benefits to recipients of social grants, through a new fund to be run by the SA Social Security Agency (SASSA). But though this would stop private companies preying on grant beneficiaries, the Black Sash has warned that the chief executive of SASSA would have too much power.
Among proposed amendments to the Social Assistance Act currently before Parliament is the creation of a Supplementary Benefits Fund to pay out funeral benefits to grant recipients.
This would put an end to what Minister of Social Development Bathabile Dlamini has called “exploitative and predatory practices by private insurance providers”.
So far the Department has battled to stop the inappropriate sale of funeral policies by private companies to grant recipients. Regulations published in May preventing the sale of funeral policies to recipients of children’s grants, for instance, have been contested in court by Net1 and its associated companies Cash Paymaster Services (which pays out the social grants on SASSA’s behalf), Moneyline and Smart Life Insurance, as well as Finbond Mutual Bank and Grindrod Bank.
Payment of benefits through the new fund would solve the problem of inappropriate deductions for funeral insurance. But the Black Sash has warned that the creation of such a fund would give too much discretionary power to the head of SASSA. The agency – and the Minister – are already under fire for bad management and spending policies, and there are widespread doubts that SASSA will meet the March 2017 deadline for taking over direct payments of grants when the current contract with Cash Paymaster Services expires.
Commenting on the amendments to the Act, the Black Sash says the purpose of the proposed Supplementary Benefits Fund is not clear, and the fund would give the CEO of SASSA discretion over a large sum of money, with far too much discretionary power. “We are deeply concerned about the institutional arrangements, governance principles and transparency and accountability mechanisms that are proposed or absent in the current version of the Draft Bill.”
Rather than set up a new fund, the Black Sash argues, it would be better to include an automatic funeral benefit to everyone who gets an old age pension or a permanent disability grant. The amount should be set at 12 months of grant payments, the Black Sash argues, so that it would increase automatically every year, and should be paid out to a beneficiary nominated by the grant recipient, within 48 hours of the production of a death certificates and other documents.
“This lump sum pay-out, which is minimal and not an expensive benefit, will completely remove any funeral deductions from the social grant directly,” says the Black Sash.