Amendments to Social Grant Deductions

The Minister of Social Development, Ms Bathabile Dlamini (pictured above), issued a media release on Friday, 6 May, to explain the background to amendments to the Social Assistance Act, 2004, published on the same date.

The amendments apply to regulations relating to the application for and payment of social assistance and the requirements or conditions in respect of eligibility for social assistance.

The revised Regulations firstly seek to clarify aspects of the existing regulations, which the industry has found ways to bypass. It now makes it clear that a beneficiary must in person provide written permission to SASSA for a deduction. Where they cannot do this in person, SASSA will assist the beneficiary either through a home visit or other means in accordance to their policies.

The amendments to the Regulations now accurately reflect the fact that only insurers registered under the Long-term Insurance Act of 1998 may offer funeral policies. This is important in facilitating access to funeral policies by social grant beneficiaries in a way that offers adequate consumer protection and ensures that funeral benefits are indeed made available to the beneficiaries when a death occurs.

Further, payments for funeral policy premiums will now only be made directly to the insurer that is responsible for providing benefits under the policy. No payments to brokers will be allowed. This will ensure a direct relationship between the insurer and the social grant recipient, and ensure that insurers have direct access to policyholder information. This will go a long way in ensuring that funeral benefits are paid timeously and directly to the beneficiaries.

We have also noticed that some brokers, when faced with a case of misrepresentation, often refund premiums paid from their own funds. This is probably because they know if the case goes to the insurance underwriter and they are found guilty they will forfeit their licence.

These amendments will also assist SASSA to work with the Financial Services Board to ensure that social grant recipients and their beneficiaries are treated fairly.

Funeral deductions from children’s grants will not be allowed. Regulation 26A was intended for adult grant beneficiaries. The amended Regulations seek to clarify this original intent by limiting funeral policy deductions to adult grants only.

Lastly, these Regulations will also clarify the payment options that are in existence for social grant beneficiaries. There have always been two options; either the beneficiary’s own personal bank account or through the SASSA payment mechanism.

Please click here to download the Amendments.

Some of the examples cited in the media release are shocking, to say the least, and reiterates the need for protection of those most in need thereof

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