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Social Grants and Funeral Insurance Premiums

The government proposes to amend regulations concerning deductions from social assistance grants by making an affordability assessment a prerequisite to entering into any agreement to provide funeral cover to the beneficiary of a social grant, writes Pam Saxby for Legalbrief Policy Watch. This is in keeping with provisions in the National Credit Act.

Currently, regulation 26(A)(3) states that a funeral insurance or funeral scheme deduction may not exceed 10% of the value of the social grant concerned: a requirement that would remain in place. In addition, the proposed amendments seek to ensure that no deductions other than for funeral insurance premiums are made to any bank account opened for a social grant beneficiary explicitly to facilitate grant payments.

Once operational, the amendments will also prohibit direct funeral insurance deductions from foster child, care dependency and child support grants as well as temporary social grants. In this regard, a three-month grace period is proposed in order to allow alternative arrangements to be made.

It is proposed that a “representative” of the beneficiary of a social grant should be allowed to request the South African Social Security Agency to deduct one funeral insurance payment per month at source. Such a request should be made personally and in writing, and the “representative” should not be the service provider concerned.

Please click here to download the relevant Government Gazette.

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