Standing Committee on Community Development (Social development) Briefing to Standing Committee on Community Development (Social development) Unauthorized & unlawful deductions from social grants 17 July 2018

Presentation Layout Black Sash Mission Social security/assistance is a constitutional right Unauthorized airtime and electricity deductions Easy Pay Everywhere bank account Regulation 26 A: Funeral policy deductions Unauthorized funeral deductions Funeral policy deductions disputes Protect beneficiaries’ confidential data Actions by Black Sash & its community partners SASSA’s new payment system for social grants Outcomes of Hands Off Our Grants (HOOG) Campaign Recommendations

The Black Sash’s mission is to realize socio-economic rights, with emphasis on social security and social protection for the most vulnerable, particularly women and children, to reduce poverty and inequality. The implementation of socio-economic rights demand open, transparent and accountable governance by state, corporate and civil society.

Social security/assistance is a constitutional right: Health Care, Food, water and social security Section 27 (1)(c) “Everyone has the right to have access to ­ social security, including, if they are unable to support themselves and their dependants, appropriate social assistance.”

Unauthorized airtime and electricity deductions The majority of the deductions are for airtime and electricity from Manje Mobile (a Net1 subsidiary) – SASSA to provide the stats. CPS and Net1 changed the requirement to lodge a complaint for these deductions several times since 2012. When dispute for airtime and electricity deductions are lodged the beneficiary cell phone number is blocked Many beneficiaries have not received refunds for these airtime and electricity deductions. They claim that CPS has not received affidavits, but it is unclear why. We also find the CPS/Net1 refund policy arbitrary. There needs to be a clear, transparent refund policy that beneficiaries can follow.

Easy Pay Everywhere bank account The EPE bank account facilitate EFT/debit order deductions for various Net1 companies including Manje Mobile (air and electricity), Moneyline (loans) and Smartlife (funeral policies) We took up the cases of over 1 000 beneficiaries in Ceres and surrounding areas. We found that following: - many were told that the EPE card was the new SASSA card (misrepresentation) - many could not access bank statements to assess what is going on in the EPE bank account - many were struggling to close the EPE account with no success - many could not stop the Smartlife funeral policy or the airtime and electricity deductions from the EPE account

Easy Pay Everywhere (EPE) bank account - many could not stop the Smartlife funeral policy or the airtime and electricity deductions from the EPE account There is no Grindrod Bank or Net1 offices in Ceres to seek recourse. Beneficiaries have to travel to Worcester (over a 100km a return trip). They pay the transport cost from their own pockets. See documentary Grant Grabs 3: The Green Card - get your copy In May and June 2018 CPS agents refused SAPO officials access to the SASSA pay points to conduct SASSA/SAPO card swop. SASSA lodge an interdict at the ConCourt against this behaviour. The ConCourt has decided to consider the matter. The Recourse Forum last week, established a sub group to deal with the systemic and operational challenges facing EPE card holders.

Regulation 26 A: Funeral policy deductions SASSA has started to implement a special system for permissible funeral policy deduction in terms of Regulation 26 A. The Clean Up project will ensure compliance with the requirements of one funeral deduction that is not more than 10% of the value of the grant. Beneficiaries who want to make use of a Regulation 26A funeral policy deduction need to complete a mandate form to instruct SASSA to effect this deduction. Funeral policy deductions are managed by Q-Link (as payroll deduction) and are made prior to the transfer of social grant funds to beneficiaries’ bank accounts. SASSA staff to perform compliance checks on funeral insurance companies with the Financial Services Board (FSB).

Unauthorized funeral deductions SASSA also check the validity of mandates, that the product offer is value for money and compliance with the one deduction of not more than 10% of the value of the grant. The May 2016 amendments to the Social Assistance Act Regulations prohibit funeral deductions from children’s and temporary grants, in addition to the criteria of one funeral policy of not more than 10% of the value of the grant. There are still concerns about funeral policy deductions (via debit order) from beneficiaries with the SASSA/Grindrod Bank Account and those with commercial bank accounts including the Easy Pay Everywhere account

Unauthorized funeral deductions As a result beneficiaries may end up with more than 1 funeral policy deduction and/or more than 10% of the value of the grant. Funeral policy deductions continue to be made from children’s and temporary grants. Many beneficiaries also end with unauthorised (and fraudulent) funeral policy deductions as illustrated in the example below. - Beneficiaries were promised food parcels by sales agents who alleged they worked for SASSA. - Beneficiaries provided confidential data including IDs, SASSA card number etc. - Two month later funeral deductions were made from the SASSA bank accounts -

Funeral policy deductions disputes - They are still waiting for the food parcels - They have not seen a copy of the funeral policy, nor have they signed/ authorised it. In some instances the funeral policies were activated with wrong information. When the beneficiary die no-one will benefit from the policy, yet contributions were made for years. Grant beneficiaries who take out loans on the Easy Pay Everywhere bank account are often ‘forced’ to take out a Smartlife funeral policy. An additional debit order is initiated for the funeral policy further reducing the monthly grant

Funeral policy deductions disputes Funeral policy deduction disputes continues to take a long time to resolve due to:- - Collection of evidence i.e. securing bank statements to track deductions, completing affidavit for submission to SASSA. - Submissions to the funeral service providers went missing several times, submissions to SASSA were not passed on to national office for resolution - Investigations found that some funeral insurance service providers are not properly registered with the FSB or fully compliant with the Act The problem is made complex by a lack of interface between the SASSA and CPS technology dispute systems. A beneficiary may end up with two reference numbers from the different systems

Protect beneficiaries’ confidential data SASSA handed over grant beneficiaries’ confidential data to CPS to pay social grants from 2012. The CPS/Net1 collected grant beneficiaries biometric (fingerprints in the main) information on their proprietal system. While the biometric data belongs to SASSA it does not have the machines to read the data. Subsidiaries of Net1 gained access to beneficiaries’ confidential data, which combined with debit order facility on the SASSA bank account helped to facilitate deductions. The Constitutional Court in March 2017 &March 2018 ordered that SASSA and CPS must protect the confidential data of grant beneficiaries and put mechanism in place, supervised by the Information Regulator In recent SASSA and Panel of Expert reports CPS/Net1 and Grindrod Bank argue that they want to retain access to the confidential data of grant beneficiaries. SASSA will have a potential challenge to ensure that CPS/Net1 and Grindrod Bank return the confidential data to SASSA when the CPS contract expire on 30 September 2018.

Protect beneficiaries’ confidential data In recent SASSA and Panel of Expert reports CPS/Net1 and Grindrod Bank argue that they want to retain access to the confidential data of grant beneficiaries. Grindrod Bank is advertising that the SASSA Grindrod bank card will operate beyond December 2018. SASSA has a challenge to ensure that CPS/Net1 and Grindrod Bank return the beneficiaries’ confidential data (including the biometric data) to SASSA when the CPS contract expire on 30 September 2018.

Actions by Black Sash & its community partners Black Sash addresses unauthorized, fraudulent and unlawful deductions in a number of ways and through several platforms. We used Community Based Monitoring (CBM), local and national advocacy campaigns, engaging in legislative system change and media. We served on the Ministerial Task Team (to investigate and explore solutions to the unauthorized , fraudulent and unlawful deductions and from the SASSA Grindrod bank account held As a last resort we used the Courts to ensure that grant beneficiaries issues are addressed Black Sash and community partners serve on the Recourse Forum (as recommended by the Panel of Experts on 16 March). Other participants to this forum include SASSA, SAPO, CPS, Grindrod Bank and DSD.

SASSA’s new payment system for social grants

Outcomes of Hands Off Our Grants (HOOG) Campaign: Social Assistance Act Regulations were changed in May 2018 to outlaw funeral deductions from children’s and temporary grants, deductions from the The new SASSA/SAPO Special Disbursement account is ring fenced and will not allow EFT, debit or stop orders. It will also not permit electricity or airtime or other advance purchases. Some efforts have been made by SASSA, CPS and SAPO to protect the confidential data of grant beneficiaries, but more has to be done.

Recommendations Urgent establish the Inspectorate to monitor and implement integrity checks and take up issues of fraud & corruption. SASSA and SAPO to sort out the technical glitches so that social grant beneficiaries have access to full value of the grant. Ensure that the system is user friendly. More is needed to educate beneficiaries on the benefits of this product. SASSA should not hurriedly close paypoints, particularly in the rural areas where there is no national payment footprint. This is causing a lot of anxiety among beneficiaries. SASSA to ensure that the confidential data of grant recipients are fully protected in the SASSA/SAPO and commercial bank accounts. Ensure that commercial banks have proper recourse systems to service grant beneficiaries. Deal swiftly with unauthorised deductions

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