Welfare Financing Policy: briefing by Department

Social Development

19 October 1999
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report


20 October 1999

Documents handed out:
The New Financing Policy - An instrument to transform social welfare services [this slide presentation was not presented]
Departmental Briefing on New Financing Policy for Welfare Services
Financing welfare for transformation and development: a guide to Department of Welfare policy
Government Gazette: Department of Welfare Financing Policy (Notice 463 of 1999) [email
info@pmg.org.za for the electronic copy]

After a brief introduction on the historical perspective of the Financing Policy the deputy Director-General of the Department of Welfare indicated that the underlying principles thereof were empowerment and participation on the part of the users and accountability for those who intervened by providing the service. The policy was family as well as community-centred in that it focused on building and strengthening the family and the community structure.

The approach in terms of the policy was a holistic one. This means that people should be trained so that they are multi-skilled. In this way they would be able to treat the family structure as a whole and would thus be able to treat the underlying cause of the problems rather than focusing on an individual crisis alone. The primary focus is however on prevention and early intervention.

The financing policy also envisages a slow shift from subsidy funding to competitive funding. The time period which has been set for this transformation is five years. There is a proposal by the Katz Commission that organisations which donate monies to the Welfare Department receive certain tax exemptions. The purpose of this is to encourage sponsorship. There is a hearing on this proposal by the Portfolio Committee on Finance on Tuesday, 26 October 1999.

Due to the memorial service of the late president of Tanzania, the briefing could not be completed and was adjourned to be heard on another day.

The meeting commenced with a brief introduction to the presentation. It was explained that what was being sought was a paradigm shift in financing. Welfare organisations are currently funded on a subsidy basis according to the number of staff employed in a particular environment. This means that the larger-staffed organisations receive more money than the smaller ones. There are various shortcomings related to such a system, including the fact that it does not interrogate the quality of services being offered. It was indicated that the desired shift should take place slowly. The intent is that the financing policy should be phased in over a period of five years, starting from April 1999. Comparison was made to the science and technology institutions who moved away from subsidy funding to competitive funding slowly. This is what is envisaged for the Welfare Department.

The chairperson, Mr E Saloojee, noted that there was a proposal by the Katz Commission that organisations which donate monies to the Welfare Department receive certain tax exemptions. The purpose of this is to encourage sponsorship. This proposal will be heard by the Portfolio Committee on Finance. The chairperson of that committee, Ms Barbara Hogan has invited the Welfare Committee to attend and participate in that hearing which will take place on Tuesday, 26 October 1999.

Three members of the Department of Welfare were present but the presentation was made by Ntjantja Ned, the deputy Director-General of that organisation.

Historical perspective of the finance policy

She noted that the acceptance of this financing policy document was an offshoot of the White Paper. The challenge now was to bring life to this document through its implementation.

She noted that the policies they were using had to be realigned to provide service to the whole country regardless of issues such as race. "This", she said, "was the new challenge".

She indicated that the new policy had to be drafted within a short time-frame. Two task teams were formed; the first consisted of government and non-government organisations while the other consisted of a reprioritisation task team whose primary function it was to develop a model whereby you took the available resources and realigned them.

This task team had made various proposals and the Minister had given them a mandate to finalise the document, such finalisation had to be completed within a period of three weeks. This document was gazetted in March.

Principles that underpin the document
It was noted that the document has two parts; firstly, the transformation of services and secondly,financing. According to Ned, one must look at whom welfare is mandated to serve. Four service delivery levels were identified.

Level One relates to prevention. Particular focus was given to what is referred to as the 'softline'; ie women and older persons. The reason for this categorisation is that in relation to these two groups specifically, no equity exists. Ned continued that one could target the 'poorest of the poor' and that would include 'all', but, this would not have the equitable results desired because our history as a nation have left women greatly vulnerable.

The same rationale applies to older persons. It was noted that the pensions which are paid out to them are often used, not only for their own subsistence, but also to maintain whole families. The essence of this transfer of services is to look at people and communities and to strengthen them. Thus, the focus in this regard, is to prevent problems such as alcoholism and drug abuse from arising rather than simply treating it when it does arise.

Level Two which overlaps with the first level to a large extent, is that of early intervention. According to Ned, the best way to prevent matters from getting worse is to teach people self-reliance. Early intervention at level 3 and 4 is aimed at ensuring that no further deterioration takes place, that no further statutory intervention is necessary and that families and communities are restored under the shortest time frame possible.

Level Three is that of statutory process. At this stage the individual will be involved in some kind of court case, eg. a child being placed in alternative care away from home. Again, services here are aimed at strengthening communities during such periods of crisis, uncertainty and transition.

Level Four is that of continuum of care and developmental services. This relates to community based care such as foster care, day care and probation supervision. The focus is on the family holistically with the purpose of ensuring that the service is delivered as far as possible in the form of a "one-stop" service.

Ned indicated that the challenges are about special development areas. Currently, the position is that you wait for the abuse to occur, then you try to rehabilitate the individual. This system of treatment is however not very successful. It was indicated that the level of relapse is greater than 70%. Thus, this system of treatment is the most expensive and the least effective.

The primary reason for this is the fact that the underlying problems are not dealt with. This means that you should not only deal with the abuse but also the problem which is causing the abuse to occur.

Social assistance
It was indicated that this is a resource which is not appropriately used. The people who require this service come from a very vulnerable group. The shortcoming it possesses is that no-one follows up on the service to the recipient. This means, for example, that where an older person receives a pension, it is not even considered whether she might have abusive children who take the money that she receives, as is often the case. Thus, what is needed is resources in terms of information about the recipient and his family. The idea is that the truly vulnerable will get extra support.

Aims of the financing policy
- To eliminate imbalances in services.
- To look at the resources and realign them with the strategic policies of the
day. In this regard it was noted that the resource allocation between the provinces and within the provinces is a cause for concern.
- To take services where people need them the most.
- It was stated that it was an option to finance different organisations differently. Certain criticisms were levelled at the current mode of financing. Ned noted that at present funding was not done in an appropriate manner as it was not considered how well-capacitated that organisation was to deliver. Further, the strengths and weaknesses of the organisations were not evaluated; money was simply given and then they would 'hope for the best'.

Principles of the financing policy
- It is applicable to service providers in the government and non-government sector.
- The focus is on the levels of intervention and early intervention.
- Human resource development has to be maximised.
- There has to be promotion of effective and efficient service delivery.
- There must be a holistic approach to service division.
- Historical imbalances must be taken into account.
- It is aimed at alleviating poverty and improving the quality of life of people.

Financing shifts
During her presentation certain shifts were highlighted.
Shift 3 - The shift would be from a focus on financing specialist organisations and services to the financing of holistic services with specialist components integrated. To demonstrate, one might consider one family experiencing three problems; the mother is a drug addict, the father is an alcoholic and the child is being abused. In terms of the old system three different persons would deal with each separate issue. In terms of the proposed policy one organisation will provide one holistic service to that family. Thus, people should be trained to be multi-skilled, to do the work better.

Shift 5 - A shift from financing on the basis of entitlement to financing on the basis of effective and necessary services.
Here financing decisions will be based on the compatibility of policies and plans with identified needs; and the provision of an effective service that meets minimum standards.

Shift 8 - From financing based on arbitrary criteria to value-based criteria.
This shift will ensure that services reflect in policy and practice, the principles and values of the new developmental social welfare service system.

The paradigm shift looks at the basket of services that must be supplied. Three categories are identified:
Direct services - This refers to the case where persons go from house to house to train individuals.
Organisations developing and training others to do the work - This includes the co-ordinating and monitoring of services. It is ensured that there will be no unnecessary overlaps.
The final category is the mobilisation of communities to go for services.

Financing options
In relation to the finances at the disposal of the Welfare Department it was noted that funding went to the provinces, and in this way was distributed to the various departments. As fiscal discipline was very important the department was bound to remain within the budget.

When financing organisations, one should look at where they are situated, what they do and how they are aligned. It was suggested that organisations be financed in phases. Funding should include funding for skills training for women. This was part of the job summit commitment.

At this stage the chairperson adjourned the meeting for members to attend the memorial service for the late president of Tanzania. A date for the follow-up meeting which will consist of the final part of the presentation and a question and answer session has not yet been set.


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