Cash Paymaster Services (CPS) has been instructed to remove debit order facilities from South African Social Security Agency (Sassa)-branded cards, social development minister Bathabile Dlamini said on Friday.
Briefing media in parliament, the minister vowed to stop the scourge of illegal deductions from Sassa grant holders.
“Airtime advance was the main cause of deduction disputes and it is on the increase,” she said.
Dlamini said the Sassa management were sending the instruction to remove debit order facilities to CPS on Friday.
The executive manager for grants administration, Dianne Dunkerly, said in February that they had received 46 705 deduction enquiries.
“These cover a range of enquiries. Of those … 15 000 related to airtime. So you can see, by far the vast majority relates to airtime,” she said.
She said they received over 35 000 inquiries in March, and 12 000 were related to airtime.
“The amounts vary from multiple deductions of R5 each time, to a once-off deduction of R100 or R150.”
The minister also slammed “unscrupulous” funeral insurance brokers and loan companies for targeting the elderly.
She said they were deeply disappointed in CPS, the service provider that was appointed in 2012 to pay social grants.
“Instead of carrying out their ‘organ of state’ function, CPS seems to be profitably participating in these questionable activities through subsidiary companies,” she said.
With the new system, she said, they had looked at closing all the gaps and loopholes that financial institutions had used to “fleece” the elderly.
She announced the publication of the revised regulations to the Social Assistance Act, which will put an end to unauthorised and unlawful deductions.
The new regulations made it clear that a beneficiary must in person provide written permission to Sassa for a deduction, she said.
Only insurers registered under the Long-term Insurance Act of 1998 may offer funeral policies.
Payments for funeral policy premiums would now be made directly to the insurer responsible for providing benefits under the policy.
And funeral policy deductions from child grants would not be allowed, she said.
“We have consulted with the South African Reserve Bank and the Payment Association of South Africa and together we believe this is a necessary intervention to stop deductions.
“I have approved the recommendation for a Sassa-owned and controlled recourse system to be in place and for beneficiaries to be refunded back dated to 2012,” she said.
She said they wanted to accelerate progress and had agreed to further improvements to the system.
She detailed some of the challenges faced by Sassa beneficiaries.
A new one was the Easy Pay Everywhere, she said, also referred to as the green card.
They were investigating cases where beneficiaries were allegedly told they needed an Easy Pay bank account to receive social grants and that they had to pay monthly fees.
She said attempts to cancel these Easy Pay accounts were nearly impossible once opened.
Currently, beneficiaries receive R1 500 (old age pension), R890 (foster care grant), R350 (child support grant) and R1 500 (disability and care dependency grants).