Eastern Cape Pension payment crisis and provincial finances: briefing by Minister of Welfare & Population Development

SELECT COMMITTEE ON SOCIAL SERVICES
10 FEBRUARY 1998
EASTERN CAPE PENSION PAYMENT CRISIS AND PROVINCIAL FINANCES: BRIEFING BY MINISTER OF WELFARE & POPULATION DEVELOPMENT

MINUTES

The Minister of Welfare and Population Development, Geraldine Fraser-Moleketi addressed the Committee on the pensions crisis in the Eastern Cape where pensioners went for 14 days without payment as well as the status of finances in all provinces.

Much of the crisis was caused by gross inefficiency and mismanagement. This is in the process of being corrected. Teams of competent departmental officials from provinces nationwide are being sent into this department to train officials in correct administrative procedures. There will be monthly monitoring of budgets. Payments through Post Offices are a problem because the Post Offices do not properly reconcile their books. There is a problem with the administration of the cash flow.

It is hoped that the new data-base will facilitate the amalgamation of the 14 previous registers. The re-registration exercise was aimed at ridding the system of fraud and corruption.

Problems were experienced with the handling of backlogs. The shortage of funds was exacerbated when attempts were made to back-pay large amounts all at the same time when current commitments had to be met. Such back payments would have to be staggered. Also there was discussion about whether payment should be started from date of application. It was anticipated that in future all applications would be fully processed within three months, so that back pay should never exceed three months.

Where large sums of money were due for back pay, unscrupulous officials were siphoning off some of the grants for themselves.

Many officials were extremely rude and treated pensioners with disrespect and contempt. This type of behaviour would no longer be tolerated and should be reported. Officials must learn to be people-friendly.

Many people applied for pensions from more than one source, for example, an old age pensioner would also apply for a disability grant. With the new registration system, it will not be possible to apply in two different places. A period of 24 months was set for re-registration. There are still 19 months of this period left.

Problems experienced by the various provinces include:
a) Double issuing of ID books
On collecting their ID book from the Department of Home Affairs when such ID book could not be found, people who had applied for identity books were told that their applications had been lost and that it was necessary for them to re-apply. They did this, and in due course two books arrived with different numbers. They then applied for pensions twice, were granted them twice and continued to collect double payments.
Solution: The Minister said that with the pension re-registration, each person would be given a unique pension number registering pensioners in such a way that applications could not be duplicated.

b) Whereas some people did not report deaths, others who did and presented death certificates found that pension money continued to be paid.
Suggestion: In all such cases overpaid money must be claimed back.
With the new database when people are deceased or when dependents turn nineteen, will have their names automatically deleted from the payment register.

c) District Surgeons, especially in certain rural areas are unscrupulous in granting or withholding pensions. In many cases they do not examine the patient properly, and people who are not disabled are granted pensions, whereas persons who are genuinely disabled have their requests rejected.
Solution: Pension applications should be handled by a panel of at least three.

d) The difficulty of payment by cheque especially in rural areas where there are often no banks, and where pensioners have to walk many miles to receive the cheque and then to cash it. The Minister said that it was difficult to arrange cash payments due to cash heists.
Solution: Private contractors were being carefully screened and asked when tendering for pension-payout contracts to explain exactly how payments would be made, what precautions would be taken, and what arrangements they would put in place for the safe distribution of fortnightly payments. Presently there is a national investigation into the private companies tendering for payout contracts.

E) Details have emerged concerning fraud syndicates. Concrete evidence is sought so that convictions can take place.