Special Pensions Amendment Bill: hearings

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Finance Standing Committee

01 November 2005
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Meeting report

 

FINANCE PORTFOLIO COMMITTEE
02 November 2005
SPECIAL PENSIONS AMENDMENT BILL: HEARINGS

Chairperson
: Mr N Nene (ANC)

Documents handed out
Special Pensions Amendment Bill [B28-2005]
ANC Veterans League submission
uMkhonto we Sizwe Military Veterans Association
Submission by Group of former uMkhonto we Sizwe
Submission by Human Rights Media Centre

SUMMARY
The Committee heard submissions mostly from MK veterans on the Special Pensions Amendment Bill. All presenters were against the dissolution of the Special Pensions Board. It was submitted that the criterion for determining who qualified for a pension was discriminatory and arbitrary. Priority should be given to the fact that a person had made a contribution towards the liberation of the country and not to their age.

MINUTES
Submission by Group of Former uMkhonto we Sizwe (MK)

Mr J Ngcobo and Mr V Thabethe represented the Group of Former MK. Mr Ngcobo thanked the Committee for the opportunity to make some submission before it. He said that in the 1980s the generation of the Young Lions joined the liberation movement and subsequently swelled the ranks of the MK in exile. The majority of them were affected by the after effects of the conditions to which they had been exposed and there was little attention being given to them. They suffered from psychological problems and memory lapses. They were young people who had made sacrifices to successfully bring about apartheid's demise. Some of them had not reached the age of 35 years when the Special Pensions Act came into operation. They did not qualify for special pensions as a result of their age. They also did not have any skills to enable them to compete in the market place. One was talking about people who where not asked how old they were when they joined the ANC and the MK. Those people were inspired by the late OR Tambo who said that they should make apartheid unworkable and render the country ungovernable. The people heeded the call, young as they were. Some of the people were between the ages of 16 and eighteen and had not reached the age of 35 in 1996.

He said that there was an oversight on the part of the authors of the Special Pensions Act. They did not take cognisance of all persons who contributed to the struggle. Some of them did not even go to school and therefore did not have qualifications that would make it possible to assimilate them into the mainstream of the economy. The intention of the Act was to address the plight of persons who had made sacrifices or served public interest in the cause of establishing a democratic and constitutional order. The Act was adopted in good faith but nevertheless had a disproportionate effect on a number of former MK members and members of other liberation movements. The mere exclusion of certain groups on the basis of age was discriminatory and defeated the purpose of the Act. Some of the people who participated in the armed struggle could have joined the labour force and ensured that they had some kind of pension. Most of the former MK members were unemployed and there were many women and children suffering as a result.

Discussion
Mr A Moloto (ANC) wanted to establish if the presenter was saying that a person had to be eighteen years in 1996 in order to qualify for the pension. A person who was 21 years in 1983 would have been 35 in 1996 and would therefore have qualified for the pension. He asked what would be the most appropriate cut-off period in terms of age for a person to qualify for the pension.

Ms J Fubbs (ANC) said that there was not doubt that some people had made some sacrifices for the liberation of the country. Some people would not be covered no matter what age the Committee might choose. This was the sad reality that the Committee and presenters should consider when making their inputs. She welcomed the submission. It would be helpful to look at those who would not be covered, no matter what age was adopted, and begin to come up with suggestions on how to deal with them.

Mr L Johnson (ANC) said that in terms of the law a person had to be of a certain age and had to have an uninterrupted service of a period of five years prior to 2 February 1990 in order to qualify for a pension. This would impact on any decision that the Committee might make it terms of the qualifying age.

Mr Thabethe replied that the age of eighteen was used because it was the age at which most people started working. It was not intended to be a cut-off point but rather to ensure that there would be no discrimination because ordinarily most people had joined the workforce and started accumulating pensions by that age. The MK was aware than some people were as young as fourteen when they had joined the liberation movements. Such people had served in the struggle for more than five years but were still excluded due to their age. He agreed that the age issue was very tricky and that there would be some people left out even if the cut-off period was to be set at eighteen years. He requested that the Committee shy away from using a cut-off date. There were other measures that the Committee could use to strengthen the legislation. The liberation movements could be required to submit information to ensure that no benefits would be paid to people who had not benefited the struggle.

Mr B Mnguni (ANC) asked if the presenter had ever thought of any other means of assisting those who were not covered in terms of the Act. He referred to skill development, social assistance and training or employment of any other sort. There were former MK members who could not fend for themselves due to their mental conditions. Some of them might even not be able to make proper use of the special pension if they were to get it.

Mr Thabethe replied that a study had been conducted on the impact or implications of the Special Pensions Act for people who were under 35 years. The study had made some suggestion relating to skills development and retraining so as to capacitate people and enable them to compete in the mainstream of the economy. It mentioned that this did not take away the need to assist them specifically because some of the people were destitute. Skills development was a long process.

Mr Moloto asked if the presenters were saying that a person had to be eighteen in 1996 in order to qualify for pension. The Committee would have to deal with a range of issues if the submission was saying that the person had to be eighteen years in 1996.

Mr Nene understood the presenters to be saying that the issue of age was tricky and the Act should not be decisive about the cut-off point.

Mr Thabethe replied that the age of eighteen was mentioned to show that most people started working at the age of eighteen. People who joined the liberation movement at the age of eighteen but had not reached 35 in 1996 had forfeited an opportunity to accumulate a pension.

Submission by Human Rights Media Centre
Ms S Gunn (Executive Director) made the submission. The cut-off age in the draft Bill was 40 years and not 35 years. This had upset her because she would have been the only one in her detachment who would have qualified for the pension. She had become aware that some of the MK combatants that she had worked with inside South Africa (SA) would not qualify for a special pension because of the limitation placed in the Act. Most of the combatants she had worked with outside the country would have qualified for a pension. She had applied and was granted a special pension and she was enormously grateful for it. This was a victory because most members of the former liberation movements had not thought that they would get pensions.

She had conducted interviews with staff and officials of the Special Pension administration and the Minister of Finance, Mr T Manuel. The memorandum of the Bill "assumed that most persons that qualified for a pension or survivor’s lump sum in terms of the Act would have applied in the extended period allowed for late applications". The Bill called for the dissolution of the Board 60 days after 31 March 2006 and the Review Board 90 days after that date on the basis of this assumption. She was of the view that the assumption could not be substantiated. According to Mr M Lesufi (Assistant Director: Special Pensions), 29 766 pensions' applications had been received up until the cut-off date. However, despite this deadline the Special Pensions offices still gave out and accepted forms for the purposes of addressing specific cases. They also received other applications that were put aside as late applications because they interpreted the Act to have given the Board the discretion to condone late applications.

Ms Gunn said that some people had failed to apply for pensions because they had missed the cut-off date. The further cut-off date of October 2004 had not been well publicised. Some provinces did not have offices where people could lodge their applications. The question was how people in those provinces that had no offices were reached. In 2003 a research was commissioned by the Special Pensions Board to deal with applications that had inadequate information to verify them. The research was also aimed at reaching to those who had not made their application. It had been stated that the research endeavour was not successful. She submitted that the 'quick wrap up' of the Special Pensions unit by March 2006 was not feasible due to lack of proper reporting, monitoring and research. She put the blame on the Committee and the Minster of Finance. The Committee should have received 108 reports from the Special Pensions Board to date. The Board was expected to report to the Minister and the Committee every month. There had been two audited statements and too many areas of fraud. The Special Pensions Board did not have to comply with the Public Finance Management Act (PFMA).

Discussion
Mr L Wort (Treasury) said that there were 15 700 beneficiaries. Treasury had received 36 000 applications over nine years. The majority of applicants who had not been successful did not succeed due to their age or they had provided insufficient information. With respect to the statement by Ms Gunn that the Committee should have received 108 reports, he said that section 23(c) of Act required the Board to send a report to the Minister if requested. Some reports had been submitted to the Minister. The Special Pension Fund was, by its nature, vulnerable to fraud and false applications. Treasury was busy looking at a number of cases and there was a court case in the Eastern Cape where people had been charged with fraudulently benefiting from the Fund. The statement that the Fund did not fall under the PFMA was incorrect. Special pensions fell under Programme 7 of the National Treasury budget vote.

Mr Mnguni said that these were public hearings and not an opportunity for Treasury to come and justify certain matters.

The Chairperson said that he had allowed Treasury to speak because he thought they were going to raise some issues for clarity. Treasury would be afforded an opportunity to present its case at a later stage.

Mr Mnguni noted that most people had been cut off at the stage of applying for pensions. The Regional Offices had sorted out the applications instead of putting them through to the Board where they would have been processed. He asked if it was not the responsibility of political organisations to verify that those who applied, were legitimate people who were entitled to make such applications. What were the findings in respect of people who just did not bother to apply for pensions? What were the reasons for not applying apart from missing the cut-off period? The legislation did not refer to people who were members of armed wings of the African National Congress or Pan African Congress. It generally referred to people who contributed in bringing about a democratic dispensation. These would include civic organisations and the United Democratic Front. The question was how one would verify that all people who had applied deserved the benefits if political organisations had not screened them.

Ms Gunn replied that some people did not apply for pensions because their friends or comrades had unsuccessfully applied for pensions. They felt that they would not receive the pensions since that person had failed to receive the benefits.

Ms Fubbs said that this was a very difficult hearing to undertake. The Committee was expected to look at the law itself and see how it could address the concerns. She was not aware of the Special Pensions Fund not falling within the ambit of PFMA since it dealt with public funds. The Committee should make a follow up on the statement that it should have received 108 reports and two audited statements from the Board. A point had been made that many people had not been covered. Three provinces appeared to be the most vulnerable in this regard because they had no offices. It seemed that people were under the impression that the Act would cover everybody at the time when the special pensions came up. This could explain why the submissions that had been made today were not made when the Committee dealt with the Bill that resulted in the current Act. She asked why there was such a misunderstanding.

Mr Asiya said that Ms Gunn was speaking from experience. It appeared that she was saying that the deadline proposed in the Bill would not be workable. He asked what advice she could offer on the course to be taken in dealing with the issue. He was surprised that submissions had not touch on people who had died in detention or combat. It would be interesting to know how the Bill should deal with the dependants of such people. In Northern Cape the records of former MK members were kept by a certain man who had since passed away. He burnt to death in his car and the records were also in the car. There was no office in which records were kept. This could explain why it had been very difficult for Treasury to have all the information in relation to ex-MK members. It had been stated that some people just did not bother to apply for the special pension. He asked what were their reasons. It was their right to apply for the benefits and it was important to do so.

Ms Gunn replied that the situation in Northern Cape where the records were burnt in a car was a glaring example of the difficulties that people in certain provinces had encountered. There were creative ways that could accommodate people who had not yet reached the age of 35. There was a very serious situation in the communities in terms of former self-defence units and young people who did not qualify for benefits, who were unemployed and unemployable because they did not have any education. Those people had put liberation before education. There were specials ways of accommodating such people and the solution was not only a monetary one. There was also a need for trauma counselling.

Mr Moloto asked if Ms Gunn was saying that a cut-off date could only be determined after thorough research had been done and if she had any date in mind.

Ms Gunn replied that there was a need to evaluate what research had accomplished. There was been an indication that the research that had been done, was unsuccessful. There was a need for a complete database of every single person who had been detained for a long period of time. One could not come up with a cut-off date in the absence of the necessary information.

Mr Y Bhamjee (ANC) said that one could make an informed decision only if there was a database. The Committee would have to ask if there was a commitment by any body or group to create a database.

Submission by uMkhonto we Sizwe Military Veterans Associations
Ms N Thusi, representing the Association, said that it was worrying that those who stood up to be counted in a fight against apartheid had nothing to show for the sweat and suffering they had endured during the years of hardship. It was ironic that those who had fought for the preservation and sustenance of an undemocratic government were receiving pensions at the expense of those who had made South Africa a free country. Many people who were bread winners had died and left their families destitute because their pensions contributions were too little and there was no recognition of their heroic and loyal service towards freedom. She submitted that priority should be given to the service that a person had rendered towards freedom and not his or her age. An alternative solution should be found for people who were under the age of 35. There should be monthly payments to the dependants of comrades who had since died and not just a simple one-off payment.

Discussion
Mr Mnguni asked how many years of service should be recognised. He wondered if discrimination would not remain regardless of whatever period might be agreed upon. Should it be decided that benefits should be paid to people who had a minimum of five years of service, question would still be asked about those who had served for only three or four years.

Ms Thusi replied that people should be recognised on the basis of their service.

The Chairperson understood Ms Thusi to be saying that what was important was whether a person had served in the former self defence units.

Dr Msimang replied that he had joined the ANC whilst he was still doing primary school. He had just came back from exile. The 35 years limit should not be the cut-off date. Some people could not be reintegrated back into society. Some people had spent their lives in the struggle and were now being told that they could not get a special pension due to their age.

Mr Johnson asked for clarity on the submission that payments to dependants should be monthly and not a once-off payment.

Ms Thusi replied that people should get monthly payments but she was unsure for how long.

Submission by ANC Veterans League
Mr T Mbiyabo (Acting Secretary) and Mr S Hina represented the Veterans League. Mr Mbiyabo said that people who had sacrificed their time, families and lives in pursuit of liberation were not looked after by schemes that were aimed at alleviating the plight of the disadvantaged. The League was concerned about the age limit.

Mr Hina said that he had joined the ANC in 1955 and MK in 1961. He was disappointed that the government had not recognised the services of MK veterans during the struggle. He had served a number of years in prisons for political offences and was released from Robben Island in 1991. He then joined the South African National Defence Force in 1994 and retired in 2003. African soldiers who had served in the World War II had been given bicycles and jackets after they had successfully defeated the Nazi regime. He was given a similar bicycle when he retired from the Army. His special pension was scrapped in June 2005 on the basis that he was receiving a military pension of R2 700. This pension was not enough given his responsibilities. He cited examples of people who had died in the struggle and whose families were not receiving any monthly payment from the government. Some families of people who were killed in the Maseru massacre were given a lump sum of R70 000. No monthly payments were made thereafter. He and other people were given a lump sum of R25 000.

Submission by Qibla
Mr A Cassiem on behalf of Qibla, said that Qibla's position was that people and families of those who fought in the struggle would be cared for by the first democratic state that they had helped to establish. The youth was the most dynamic component of the struggle. He said that he was 15 years old when he participated in the anti-pass campaign. He was 17 years old when he was imprisoned in Robben Island. He met five other youth aged eighteen who were serving life sentences in Robben Island. The youth had also made dramatic sacrifices perhaps because they were expendable, naive and did not have families to feed. 588 youth were killed in 1976 and all of them were under 19 years. Their parents were now suffering as a result of their detention, torture and deaths. The Cape Argus newspaper had carried a report indicating that 31% of coloureds and 35% of black families still borrowed money for food. Some of the former freedom fighters came from these families.

He said that there was unfair discrimination and therefore a violation of rights as contained in the Constitution. The very intention of the Special Pensions Act was being violated. There should be one criterion for determining who qualified for a special pension: participation in the struggle. People were not asked how old they were when they were given petrol bombs and handmade guns to fight the apartheid government. People who had spent less than five years in an organisation or structure should also receive some pension. Some of the people who had been arrested where suffering from post traumatic stress syndrome and this was a certifiable illness in other countries. Special pensions should be reviewed holistically taking into account all pensions that had been paid by the democratic government. The question was what was the total amount that the government had paid in terms of pensions. There was no doubt that the total amount ran into billions of Rand. The next question was what percentage of the total was composed of the special pension payouts. The figure was very small.

Mr Cassiem said that an important question to ask was whether the special pensions were significant or not and to whom were they significant or insignificant. He wondered if the government knew the beneficiaries under the Special Pensions Act. It could be asked why the Board had not researched this issue given that it had the money to commission an investigation. Why was an onus put on the victims to come and prove that they were entitled to the benefits? He questioned the proposed 'indecent haste' to dissolve the Special Pensions Board when its work was far from being completed. There were people who had committed political acts who were still in prison. APLA alone had more than 100 of such people. The question would be whether such people would be entitled to special pensions should it be proved that they were arrested for political offences. The proposed cut-off date was arbitrary. Some people did not read the government gazette. No announcement was made that radical amendments were going to be made to the Special Pensions Act.

He wondered what was the value of a pension of a retired Minister under the current government. What was the pension of a retired Defence Force General, for example, Mr Magnus Malan? What was the pension of the former Head of State? Was it morally right or legitimate to forsake the pensions of 15 000 people who qualified for such pensions just because they had not reached the age of 35 at the cut-off date? The question was whether the government should forsake the pensions of freedom fighters but pay those of apartheid criminals who had committed crimes against humanity.

Discussion
Ms Fubbs noted that it had been said that the cut-off date was arbitrary and that the decision on the date should be left in the hands of those who suffered. She asked if Mr Cassiem could come up with some suggestions around cut-off date and what should be considered with respect to such date. She wondered if the presenter was saying that anyone who had serve under the struggle should receive a pension. Were there any qualifications that might help in determining who qualified for a pension?

Mr Mnguni asked if there were any other means other than monetary payouts that the State could use to address the problem.

Mr Cassiem replied that the issue of special pension was complex. It was ridiculous and insulting that some people had been offered R30 000 in 1996 but were only paid eight years later. A loaf of bread and a litre of milk cost R10 per day, R300 per month and R3 600 per year. The cost of bread and milk amounted to R28 000 over eight years. In essence people were paid an equivalent of a load of bread and a litre of milk per day. Everyday there were comrades who were being treated for post traumatic stress. Psychiatrist charged R500 per hour and psychologists charged R250 per hour. It was painful that some of the comrades in the struggle had become billionaires within two years after their release from prison.

Submission by Pan African Congress (PAC)
The PAC was represented by Mr Mkhaliphi. He said that the previous presenters had already covered most of the issues he was going to raise. One of the problems was that the pensions did not increase with age. Many people in rural areas had never heard of the special pensions. He blamed the liberation movements for not informing people about special pensions. Victims should not continue to suffer only because the messenger had failed to deliver the message to them. Some people had been imprisoned for less than five years but this did not mean that they did not qualify for a pension.

The Chairperson thanked all presenters for their input. Treasury would respond to issue raised in the hearing on the 8th November 2005.

The meeting was adjourned.




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