Social Security Delivery in the Eastern Cape: briefing by MEC

Social Development

28 March 2003
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report


28 March 2003 (Friday)

Mr E Saloojee (ANC)

Documents handed out:

Relevant Document:
Mail & Guardian news article 6 Sept 2002: Judge slams E Cape welfare MEC [see Appendix]

The Director of Social Services briefed the Committee on behalf of the MEC. He outlined the challenges faced by the Eastern Cape Department and the measures taken in order to deal with the problems. Discussion was wide ranging and included such issues as contracts and performance of the paypoint service providers, facilities at paypoints, using banks instead of paypoints to collect grants, mobile disability assessment panels, fraud by officials and members of the public and public education about the details of the child grant extension.

Introduction by Chairperson
Mr Salojee welcomed Mr Maqethuka (Director of Social Services, Eastern Cape) and Ms N Gugwini from the Eastern Cape Department. Mr Maqethuka expressed the MEC's apologies for not attending. The MEC had to attend a Minmec meeting.

Mr Salojee said that in light of the increasing press reports on the difficulties people were experiencing in accessing social services, the Portfolio Committee had taken a decision to invite the MECs of Social Development from all provinces to report to them.

He noted that some of the Committee members had been visiting the provinces themselves. The Limpopo Province and the Eastern Cape had been visited, although they were planning another visit to the latter. They would be visiting Mpumalanga soon.

Mr Salojee commented that it was a pity that the MEC could not have been there, as it was critical that the Committee got a chance to interact with the MECs. He would like it to go on record that invitations are sent out well in advance. Commenting on the small number of committee members at the meeting, he commented that Friday was to be seen as a working day and this applied to Members of Parliament too.

Social Security Delivery in the Eastern Cape
Mr Maqethuka said that the Eastern Cape had been in the press for three months regarding service delivery and social services. In the Eastern Cape's 24 districts, there had 985 000 recorded beneficiaries of social grants, 50% of which were old age pension recipients, 30% were disability grant recipients and the rest received child support, war veteran and foster care grants.

Mr Maqethuka outlined the challenges facing the Department of Social Development in the Eastern Cape:
- According to the norms and standards in social service delivery the ratio of employee/ service deliverer to beneficiary should be 1: 800, but in the Eastern Cape (E. Cape) it was 1: 2900. He added that this gives an indication of the lack of human resources in the E. Cape.

- Most of the beneficiaries lived in rural areas, with 60% living in the former Transkei, where accessibility was often a problem. He added that prospective beneficiaries due to HIV/AIDS would mainly come from the former Transkei. They needed to establish good communication strategies with all stakeholders.

- Staff were not adequately trained.

- According to the Social Assistance Act, if an application was not finalised within 90 days, it is classified as a backlog. The E.Cape is facing huge backlogs.

- Much of the population does not have the bar-coded Identity Document (ID), which is necessary for accessing social assistance. The bar-coded ID is used to minimise the chance of fraud. In some instances there were examples of people claiming two grants, on the new and old IDs. This was not only a challenge for Home Affairs (which did not have enough capacity) but it prevented people from enjoying the usual benefits of a citizen, such as been able to use the bank.

- Fraud and corruption, including theft of public funds by government officials, members of the public and businesses, was a huge problem and the cause of much of the department's bad publicity. During the Transkei era people were paid their grants in cash. When for example a person died, a corrupt official might put his thumbprint on the records and take the cash and not cancel the grant. There has been much collaboration with corrupt officials in the Home Affairs department. Corrupt officials also collaborated with businesses in money laundering. He continued with more examples of the kinds of corruption the department was dealing with.

- Inadequate facilities at pay points. They had outsourced the payment of social grants in the E.Cape to CBS (in the eastern part of the province) and to Allpay (in the west, including Port Elizabeth). Problems experienced at the pay points were: too few machines at paypoints, huge numbers of people at paypoints, delays, people standing in queues for over a day. There was the added challenge of enrolling people onto the system of the service providers.
Sometimes the service providers do not arrive on the allotted day. Many of the service providers were not adequately trained and were often not treating people with due care. Also there were not enough helpdesks at the paypoints. Helpdesks should have a well-trained person with a working laptop using an off-line database.

Mr Maqethuka outlined measures taken to alleviate these challenges:
- There were now 66 mobile pay teams with helpdesks for both service providers. The Department has utilised R1.5 million in buying laptops for the helpdesks and they were loading the system at the moment and it should be ready by April.

- The Integrated Provincial Support Programme (IPSP) had been approached to provide contract workers, whilst the department was training the officials and service providers. The IPSP has also been approached to provide inspectors (based in Bisho), to ensure that service providers comply with their contracts and the norms and standards. They will also be inspecting whether applications are being timeously processed.

- As from 1 May, six mobile assessment panels would be working to process and assess prospective recipients of disability grants. There were currently too few doctors to deal with the number of assessments. The panels will be rurally based, as there were fewer doctors in these areas.

- In addition to the panels, the Department has contracted 100 doctors on a month-to-month basis (even though this was a Department of Health competence). The Department's full time doctor was to help with rolling out the assessment panels and to deal with appeals against refusals to give a disability grant.

- To deal with the problem of the Department losing people's files - for which the Department was being taken to court daily - they were developing an e-file system with the help of the IPSP. About 200 contract workers were to be employed for this purpose. If the youth of the area could be part of the project, it would help decrease unemployment. The development of an e-file system is to enable the department to trace files and thus, hopefully, to minimize fraud and the number of court cases against the department.

- A task team had been established with the assistance of the Interim Management Team dispatched to the E.Cape. He added that the department and the Joint Anti-Corruption Task Team had recently arrested a corrupt doctor and teacher who were fraudulently issuing fake medical certificates.

- The Department was responsible for the mobile teams (consisting of officials from the Departments of Health, Home Affairs, Social Development), which were going around to communities, enrolling people on site and helping with other problems. Mobile teams were currently in the Transkei. Over 70 000 applications had been captured in this manner between November and March.

- The Department had been moving around to each office to check on backlogs and the officials. A data capturing centre had been established in the E.Cape with the assistance of the private sector. They had reduced the backlog of applications from 130 000 to 20 000 by last week.

- An internal unit for the prevention of fraud, headed by a former policeman, had arrested 50-plus people (R15 million worth of fraud) with the help of the Joint Anti-Corruption Task Team. The unit also needed to develop controls so that the anti-corruption efforts are not only reactive.

Mr M Masutha (ANC) said that the progress made in the E.Cape was impressive, but there were still big challenges ahead. He asked what Mr Maqethuka saw as needing the greatest prioritisation of government resources if they are to ensure that the people of the E.Cape get full access to social security: would it be road building or paypoints etc.

Mr Masutha said that he had been a legislative drafter of the Social Assistance Act and knew that it did not provide for the controls that Mr Maqethuka said was needed. He asked to what extent the National Department was getting input from the E.Cape Department to ensure that their experiences were being taken into account.

Mr Masutha also asked for details on the grounds on which the litigation against the Department were based and whether these grounds continued to exist and what the Department was doing to change this. Did the Department anticipate further court cases?

Mr Maqethuka replied that the majority of the court cases emanated from delays in processing applicants forms (as well as losing the forms) and secondly due to officials destroying incomplete forms rather than returning to the applicant in order to get the necessary information. The department also believed that some officials were purposely trying to cause litigation. Lawyers are paid R4000 for such cases and they believe that corrupt officials gain a "kickback". Inadequately trained officials exacerbated the problem.

He continued that they had established a team that moved around the province, training service providers to help with these problems. They had put independent supervisors in place in many offices. Previously there had been no separation of duties in processing forms, thus leaving it open for officials to tamper with forms and defraud the system. The department was now separating duties.

He noted that a Litigation Task Team was responsible for coming up with strategies to help decrease the number of courts cases. The number of court cases against the department was decreasing. The Social Assistance Task Team is putting controls in place and has identified areas for immediate, medium and long-term attention.

He pointed out that people had voiced appreciation of the improvement in delivery on a recent radio programme.

Mr Maqethuka said that despite the lack of controls provided for in the Act, they were taking necessary steps in the above-mentioned initiatives.

Ms J Chalmers (ANC) asked if the 100 contracted doctors were employed to help catch up with the backlog or whether they would be permanently employed. She asked how they would interact with the mobile units as she had found the concept of mobile units to be an idealistic one and that interaction between the necessary people was often lacking.

Mr Maqethuka replied that doctors would be contracted on a month-to-month basis. The doctor's certificate of the disability grant applicant is brought to the assessment panel (consisting of a nurse, a social worker and a member of the community in the particular area). The inclusion of the last person was to ensure a holistic approach to health assessment so as to help with culturally defined illness that a medical doctor may not pick up or may define differently. (Mr Maqethuka gave an example in Xhosa).

Ms Chalmers mentioned that in her constituency of Somerset East, ABSA did not provide sufficient machines.

Mr Maqethuka replied that consultants are looking at both CPS and Allpay to see if they can deliver as contracted in Somerset East. At the beginning of their contract there was severe overcrowding but at present, 70% of the people were being paid before midday. Problems were often caused by employing untrained people in the area (intended to reduce local unemployment).

Prof L Mbadi (UDM) thanked Mr Maqethuka for his presentation. He noted the outsourcing of social grants delivery to CPS and Allpay. He had seen a woman so frail she had been brought to collect her pension on a mattress. He had asked the MEC about the matter and had been assured that the officials were supposed to go to frail people's homes themselves. What were the service providers doing to address this problem.

Mr Maqethuka replied that the previous month a list of bedridden people had been handed over to the service providers so that they could visit such people in their homes or have the person appoint a collector.

Prof Mbadi said that another matter raised with the MEC was the payment of grants in the form of cheques. Were the department's cheques non-negotiable and non-transferable so that other people could not steal the money. People had experienced problems changing the cheques.

Mr Maqethuka replied that the cheques were still non-transferable and non-negotiable. Many people, especially in the rural villages, bought provisions from shops on credit and that some banks accepted the social grant cheques as payment on these accounts. However shop owners and officials were sometimes in cahoots and defrauded the system or the supposed beneficiary. Twenty six people had been arrested for such fraud the day before. They were no longer going to pay grants in the form of cheques.

Prof Mbadi noted that the service providers get R28 per beneficiary but that ABSA charged R7, and therefore the department could save in utilising the banks. In addition people could access grants through the bank at anytime not just on the grant payday. Many people prefer using the bank to CPS or Allpay and he asked if such people were being catered for.

Mr Maqethuka replied that the average amount paid per beneficiary to service providers was R22. The department was currently campaigning to encourage people to use the banks. However many people did not use the banks as they deducted service charges from the recipient. The Department had approached the banks to come up with a package that would entice people. The MEC was about to sign an agreement with the banks and hopefully there would be no charges for these account holders. Another reason they were encouraging people to use the banks was that there was less chance of being defrauded.

Mr Saloojee asked if the national department was interacting with the Banking Council.

A DA member asked why the Post Office's Post Bank was not been utilised more as they had fewer charges and had far more branches in rural areas.

Prof Mbadi commented that officials in the grants offices were often not encouraging people to use the banks. The department must give the officials a directorate to encourage people to use the banks and the post office.

Mr Maqethuka responded that there were discussions at national level with the Banking Council. The Post Bank was not registered with the ACB and thus could not be used. He said that they had tried to persuade Post Bank, as well as the community banks, to register.

Mr Salojee commented that in the very rural areas there were no roads and thus no access, no post offices etc.

Mr Maqethuka said that it was the choice of the grant recipient to say whether they want to use the bank or not. He added that for some people the collection of grants from the paypoints was a social gathering. Ms B Dlamini (ANC) and Ms S Rajbally (Minority Front) agreed.

Mr Salojee pointed out that in the rural areas they had no choice as there was simply no transport available.

Ms Dlamini said that by using the shopkeeper they can get transport from him. She thanked Mr Maqethuka for his input. She gave the example of a district surgeon who had seen a poor woman who was unable to work and he had told her to come back for a re-assessment in six months. She was very pleased with the introduction of the assessment panels, as it would prevent this from happening.

Ms Dlamini suggested that the department should be firm with people who were still using old Ids. They should stipulate that no one can use them after a certain date to prevent fraud. Regarding training, she said that there should be more in training rather than new employment.

Ms Dlamini and Mr Salojee both said that they had seen groups of money launderers and fraudsters waiting inside the paypoints with large bags of false IDs being handed out. Some people where being beaten up outside the paypoints if they did not hand over their money to such people. The department should stipulate and monitor that no one, apart from recipients, is allowed with so many metres of the paypoints.

Mr B Solo (ANC) said that it was a pity that the MEC was not at the meeting. He added that other departments such as public works were also implicated in these issues, for example the problem of lack of accessibility in the rural areas.

Mr Solo commented that the political reputation of the E.Cape was a joke. In their business plans, CPS and Allpay had convinced the Department that they should be contracted, but they were not up to the challenge. He asked why the penalty clause was not being used. He suggested that churches and community based organisations (CBOs), which were all over the country, should be utilised in social grants delivery. He gave numerous examples of under-utilised resources in the Cradock region, from where he came. Mr Solo said now was not the time for retraining and that incompetent people should be fired. He had encountered appalling attitudes from many of the officials and service providers.

Ms Rajbally asked what was being done to deal with the lack of physical access to grants that many people were experiencing in the rural areas. Some people had to leave a day in advance to reach the paypoints.

A committee member, referring to the role of the shopkeepers, said that they were charging up to R20 to fetch cheques for people. Recipients thus had to pay for what was the government' responsibility to provide.

Ms Dlamini said that the MEC in the E.Cape had visited the local governments twice and briefed the councillors on what to do. The social cluster had also been briefed. This social cluster in turn communicates with the wards to monitor paypoints. They had an office for people to seek help and information. She added that she was thankful that the MEC was working for the community.

Prof Mbadi said that he had only seen one mobile Home Affairs unit in the Northern Cape, which was insufficient.
He had been informed that the date of payments to a recipient is from the date of application not grant approval. He asked if the department had budgeted for this back payment.

In response, Mr Maqethuka made the following comments:
- The MEC was undertaking road shows to give people all the information they needed and to inform them about the recent outsourcing. Particular attention was paid to Port Elizabeth where they had experienced political problems.
- Further, they have signed an agreement with unemployed graduates to bring them into the delivery process.
- They were encouraging the service providers to issue payment on certain days according to the grant type so that for example, the young people did not push away the elderly in the queues.
- They were encouraging especially the youth to use the banks for their grant payments.
- They had imposed the penalty clause (especially on CPS).
- The deployment of supervisors would hopefully help with the problem of incompetent officials.
- There were seven mobile Home Affairs teams in the E.Cape at the moment. The department is in negotiations with the IPSP to expand this project in order to reach farm workers.

Ms Chalmers said that she had found Mr Maqethuka's visit to the Committee informative. However she believed that the lack of facilities at the paypoints was not a priority for the department. It did not fall under the service providers contract to provide toilets, shelter etc. She asked if there was engagement with the local pension forums to come up with context-specific solutions.

Mr Maqethuka replied that the problem of facilities at paypoints was being debated. Public Works was now part of the Grants Task Team. They have been in communication with other stakeholders, including welfare committees, many of whom placed representatives at the paypoints. However some welfare committees were not genuine and were in fact working for their own gain. The chairs of the welfare committees would soon have to be a ward councillor in order to control this problem. They had just compiled a database of welfare committees so that if they were experiencing problems with a committee, they had the necessary contact information.

Prof Mbadi pointed out that ward councillors were often teachers and at work during the day.

Mr Maqethuka replied that in such cases a ward councillor would at least have to be a member of the Welfare Committee.

Mr Salojee asked if work had actually begun with regard to improving access and facilities.

Mr Maqethuka replied that it had begun in some areas, if only in building basic access roads. They had consulted with their legal advisor as to whose responsibility it was to maintain facilities at paypoints. The legal advisor had said it was the responsibility of the service providers. Mr Maqethuka added that the community could also play a role in this. The provision of water is a joint responsibility. He noted that 30c of the service providers R28 per beneficiary is paid back into a fund for the development of such facilities.

Responding Prof Mbadi's question on backlogs, Mr Maqethuka said that receiving a social grant was a right not a privilege. By 31 March, the backlog from the 1992 financial year should be dealt with and had been budgeted for this year. He added that backlogs could not altogether be avoided. He referred to the extension of the child grant and said that thousands would be at their offices on the 1 April. Government has said that each province must say what it needs in order to be ready. However, not everybody would be captured on time.

Prof Mbadi was emphatic that the department must inform people about the details of the child grant extension, by radio for example. People would be going to the department to apply for thirteen year olds, as they had not been correctly informed. Mr Salojee added that there would be a lot of anger about the staggering of the extension to older children over the next few years.

Ms Dlamini said that mobile home affairs had processed thousands of IDs, but administrative problems arose in the Port Elizabeth area, as the wrong stamps were used for the forms. It was vital to include local government in the process to avoid these mistakes. She commented that she had heard information about the child grant extension on the radio. Also women in church councils had taken note of the information in order to pass the information on.

Mr Salojee adjourned the meeting.

Appendix 1:
Mail & Guardian news article: Judge slams E Cape welfare MEC

Date: 06 Sep 2002

About 120 people a week are bringing high court claims against Ncumisa Kondlo, the Eastern Cape MEC for Welfare, for failing to pay grants.

This week 28 people brought applications against the MEC in the Port Elizabeth High Court, bringing the total of similar cases in the past four weeks to 113 in that court alone. Similar cases are being heard in courts in Bisho, Umtata and Grahamstown.

Eastern Cape lawyers say they are preparing at least one class action against the provincial government. The lawyers say the cases indicate how the constitutional rights of many elderly, young and disabled people are infringed in the Eastern Cape.

Judge Andre Erasmus echoed their opinion in a judgement recently. Nontombi Ndevu had brought a case against the welfare MEC and her permanent secretary, Namhla Dekeda. The judge ruled that public servants under the MEC's control had failed to perform their duties properly.

"Many persons in this province are suffering real hardship through the ineffectiveness of the public service at provincial level," he said, describing the case as "the tip of the iceberg".

Ndevu had applied for a disability grant last November, but had had no response from the Department of Welfare by March. She then took her case to court. The Eastern Cape Department of Welfare filed notice of opposition in April, but withdrew it in July.

Her legal fees were mounting and she could not afford to continue with the case. She then heard that her application for a grant had been refused, but applied to the court for a cost order.

Erasmus said it appeared the provincial government had opposed her case to give the department time to process the claim. He said the tactic had added to Ndevu's legal costs and ordered the provincial government to pay them.

The judge said he was concerned about the legal costs of these matters.

Hundreds of similar cases have been heard in Eastern Cape courts and thousands are being prepared for court, according to local lawyers.

Robert Martindale, a Port Elizabeth lawyer who is dealing with hundreds of similar cases, said he had seen many cases where unreasonable delays in the processing of grants had been held to be infringements of the applicants' constitutional rights.

Gloria Jayiya applied for a disability grant in 1999. The application was approved, but civil servants did nothing to start payments. In May last year the high court ordered that the payments be made. Three months later Jayiya launched contempt proceedings against the department for not paying the grant. Jayiya lost the case in March, but was granted leave to appeal in May.

Martindale believes a successful appeal will have far-reaching impli-cations for many thousands of disabled and elderly people in the Eastern Cape whose grants have been delayed.

He has also prepared papers for a class action suit against the provincial Department of Welfare. The Black Sash has been approached for financial help.

United Democratic Movement provincial spokesperson for welfare, Christian Martin said Kondlo had turned her department into a money-making racket for the legal profession. "She is no longer running her department. It is being run by the courts. Our premier should recognise this and get rid of her."

Donald Smiles, the Democratic Alliance's provincial spokesperson on welfare, said it was unfortunate that thousands of people's only redress was to take the welfare department to court to get what was rightfully theirs.

He said the cases dealt with this week in Port Elizabeth had cost about R100 000.

Kondlo said "The UDM's focus is skew. I am doing successful payments for 600 000 beneficiaries. They are focusing only on a few human errors."

Gcobani Maswana, spokesperson for the Department of Welfare, said the MEC recognised the problems in her department and had set up a task team to implement an intervention plan.

"The biggest problems are fraudulent doctors responsible for making assessments in disability applications, touting by lawyers among the community and loan sharks collecting money from pay points on applicants' behalf," he said.


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