South African Social Security Agency and Legislative Framework: briefing

Meeting report

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
7 September 2005
SOUTH AFRICAN SOCIAL SECURITY AGENCY AND LEGISLATIVE FRAMEWORK: BRIEFING

Chairperson: Ms J Tshivhase (ANC)

Documents handed out
PowerPoint presentation on the establishment of the SA Social Security Agency
PowerPoint presentation on Legislative Framework
PowerPoint presentation on Department oversight optimisation

SUMMARY
The Department of Social Development and the SA Social Security Agency (SASSA) briefed the Committee on the establishment of the Agency, an overview of its legislative framework, and the proposed oversight optimisation plan to ensure a smooth migration to the new Agency. The presenters noted the need to further combat fraud, and the problems experienced on the ground with security at pay points, and inadequate resources such as the serious lack of social workers.

Members informed the Department about their recent oversight visit to the North West Province, and the delivery problems seen there. Despite its illegality, some provinces were allowing deductions from social grants before payouts. The Committee expressed particular concern that the information technology (IT) system for the Agency should talk to existing state systems.

The Committee and Department agreed that further engagement was required, particularly on the Regulations, which the Committee had not yet viewed. The issue of conditional grants and their management would also be addressed at this future meeting.

MINUTES

SA Social Security Agency briefing
Mr F Makiwane (SASSA Chief Executive Officer) noted that the provision of social assistance grants was a key government poverty alleviation programme, which ensured income support to over 9.8 million vulnerable individuals. Major service delivery problems had been experienced over the years, resulting in significant fraud, indignity for the poor, and so on. The government had therefore decided to shift the function to the national sphere, and the administration to a specialist, focused agency, namely SASSA.

The attached presentation details some of the institutional challenges and constraints of the Agency, the new Service Delivery Model, the Process Map towards agency establishment, the Agency business plan, and its progress to date.

Discussion
Ms I Direko (ANC) commented that it was important to start high when eliminating corruption. Her province had given a contract to its payment service providers for three years, and this had not yet reached the end of its term. What would happen about this?

Mr Makiwane replied that the Agency existed in name only at present. The provinces were still dealing with issues of grant administration. The Department was interacting with them to ensure minimal problems when these were migrated to the Agency. The contracts with the payment contractors would be ceded to the Agency, which was currently looking at payment models to adopt. Only one fifth of the beneficiaries used banks, for example. The current model was not sustainable and contracts were becoming kickbacks to friends. The model had to be improved, particularly in terms of the dignity of beneficiaries.

Ms Direko commented that, on the Committee oversight visit, they noted that there had been an agreement between Cash Payment Services (CPS) and certain provincial department officials that a certain amount should go to a funeral scheme. To the best of her knowledge this was illegal. Mr L Nzimande (ANC) added that some provinces had allowed people to transact on their disability grants before these were handed to the beneficiaries. The legislation did not allow this, but the provinces had done so.

Mr Makiwane replied that, in terms of the current law, no deductions were allowed. The Department had realised that it was desirable to allow deductions at times, and the Minister had been empowered to look at socially desirable deductions. He would follow up on the issue of the officials mentioned by Ms Direko.

Ms H Weber (DA) asked what type of IT was being installed, and whether it would be easily accessible, with good security.

Mr Makiwane replied that the top priority was looking at systems that would interface with other government systems. There should also be rules in the systems, such as calculators for means tests. The system should work out whether a person qualified. A fraud module was also being considered. The current system did not capture the name of the official capturing the application, and what information was captured. A prototype model had been prepared, and it was hoped to roll this out. It was hoped that roll out would happen over the Medium Term Expenditure Framework (MTEF) period.

Mr M Masutha (ANC) noted that the Committee had deliberately scheduled the briefing for the period after which a provincial visit had been held, during which the Committee had been able to look at the existing service delivery levels on the ground. The Committee had visited the North West Province, and had seen outdated machines, security concerns, and the challenges confronting beneficiaries at a social level, such as loan sharks waiting at the gates of pay points. The law was clear on what was and was not allowed, including social protection mechanisms. It was of great concern that, in respect of the social services element, there was absolutely no capacity and there would never be enough social workers. The Committee had also observed some community-based initiatives helping, without any State support. That issue should be investigated. Did the Department envisaged that social intervention would be done at provincial levels, including a possible monitoring of the efficacy of the grants in terms of poverty alleviation. Would this be a function of the Agency?

Mr Makiwane replied that the Department dealt with all social issues. The Agency had limited scope in terms of grant administration and payment services. Social services were the province of the Department.

Mr V Madonsela (Director-General) reiterated that social security was the mandate of the Department. The Agency had been established to manage the administration and payment of grants, but the Department was ultimately accountable. The Department was looking at the mechanics of the system. The Department had gone on record about the number of social workers required, as well as other categories of social services professionals, and this had been taken up with the National Treasury.

Mr Masutha noted that the regulatory authority would reside within the Department, and asked whether there would be a vacancy in the Department when Mr Makiwane left. Mr Madonsela replied that Mr Jehoma was the Acting Deputy Director-General.

Mr K Morwamoche (ANC) noted the lack of uniformity and inefficiency as institutional challenges. There had been no mention of levelling the playing fields before the establishment of the Agency.

Ms H Bogopane-Zulu (ANC) asked how the Agency would manage regular review of grants with minimal disruption to the recipients. It was to be hoped that the tender had been awarded to the right people, because their competencies were very important. Would they be able to resolve the problems?

Mr M Waters (DA) agreed, noting that persons with irreversible illnesses should not have to go for an annual medical examination.

Mr L Nzimande (ANC) asked whether the appeals system or some degree of flexibility would be retained.

Ms J Chalmers (ANC) noted the ongoing problem of a lack of doctors to do screening for disability grants, and asked how this would be addressed with the new system.

Mr Makiwane replied that the Agency was looking at a system of reviews in which the beneficiary would know exactly what was expected. People needed to be supported to find other solutions.

Ms Bogopane-Zulu asked whether disabled persons had also been employed in managerial positions. She then referred to the procurement of offices, and said that the usual assumption was that service points had to be accessible, but offices were neglected. It was also important to address access in terms of disability, and compatibility of IT systems with programs that assisted disabled persons. She noted that a lot of legislation had been passed that would have an impact on the Agency. There tended to be no synergy, and was the Agency in touch with developments?

Mr B Mkongi (ANC) noted the secondment of staff to the Agency, and remarked that some of the fraud had emanated from the staff. Would the staff from the Department be used in the Agency?

Mr Makiwane replied that there was a broader issue in terms of the transfer of staff. People were being seconded who were capable cadres to assist in the establishment of the Agency. It was envisaged that the contact level with people should be enhanced.

Mr Mkongi asked whether the process of transformation was also going to take place at pay points, as there was also corruption there. He asked about the relationship between the Agency and the Departments of Social Development and Home Affairs. People were still experiencing problems with acquiring IDs. Would the existing workers be used, and what programme was in place to ensure that people were used to assist recipients at pay points?

Mr Makiwane replied that these were the issues that the Agency had been set up to deal with. There was already a small structure in place, and it was hoped that this would make it easier for Home Affairs and Social Development to fast track services to the needy. The Department was looking at a protocol to address this as a matter of urgency.

Mr Mkongi noted a problem with disability grants, asking whether the grant would be cancelled if the recipient were to be enrolled as a community development worker.

Mr Madonsela proposed that the Department would return at a later stage to discuss these issues. The simple answer was that expanded public works jobs were largely limited to three to six months. It was only in the social services sector that people were likely to have work opportunities for about two years. If a person was on the programme and received a stipend guaranteed for two years, they would not meet the means test, but the Department would like to discuss these issues with the Committee.

Ms Bogopane-Zulu emphasised that there had been lobbies for the employment of disabled people, but she raised the concern that the number of disabled persons employed had increased yet it did not result in a decrease in disability grants.

Mr Madonsela replied that this was another policy matter requiring its own presentation. The Department was working very closely with the National Treasury in this regard, and this was closely linked to the processes in the social cluster relating to the new definition of disability, as approved by Cabinet.

Mr Waters asked for more information on the labour dispute.

Mr Madonsela replied that it related to the transfer of staff from the Department to the Agency, both at provincial and national level. In interactions with the National Treasury, a formula had been used which sought to underwrite an understanding of what was being transferred. It would go beyond core people, and include support services. Labour had noted a need to enter into negotiations in terms of Section 197(6) of the Labour Relations Act, rather than just consult with staff. The government was refusing to negotiate except insofar as it related to core staff.

Mr Waters asked whether HIV positive persons in its late stages, who were entitled to disability grants, were compelled to enrol at state hospitals and go on the antiretroviral (ARV) programme, suggesting that this would be desirable.

Mr Madonsela replied these persons would not qualify purely on the grounds of their HIV status. The new definition was not yet law, and legislation had to be amended. Legislation sought to distinguish between people with chronic illnesses, and the Department had been tasked to look at a special representation for people with chronic illness. He could not pre-empt whether people living with HIV would fall within the ambit of persons with chronic illnesses.

Ms Bogopane-Zulu suggested that a chronic illness grant be established for such a purpose, as such persons did not fit the profile for a disability grant.

Mr Waters suggested that if parents were accessing the child support grant, this should be linked to the child’s actually going to school. This would have two positive effects, namely that the child would be at school and that that it would cut down on corruption.

Mr Makiwane replied that this was encouraged. A child of school going age should be assisted, so that the child would also benefit from the schooling.

Mr Nzimande asked what agreements had been reached in terms of the composition of the advisory panel.

Mr Makiwane replied that there would be a review of the way in which committees had been operating. These issues might be brought back to the Committee.

Mr Nzimande asked about the provincial levelling of costs in terms of service delivery. Also, who would take responsibility in managing issues of fraud for the future?

Ms Chalmers suggested the need for some creative thinking to reach the really inaccessible areas, where there were no banks or post offices, and appalling roads. Currently the shopkeeper was handing out grants at great risk. How would this improve? There were a large number of people, and how could queries be answered on the spot?

Ms Bogopane-Zulu asked the Department to define disability with specific reference to the disability grant.

Mr Madonsela replied that a disabled person had essentially been described as someone with a moderate to severe functional limitation, for the purposes of accessing a social grant. The distinguishing factor was that the limitation should render the person incapable of entering the labour market to support himself. Under-eighteens were not eligible for disability grants because they were not eligible to enter the job market.

Ms Direko noted that there were children under the age of eighteen who were badly disabled and needed assistance. She looked forward to a more comprehensive reply from the Department.

Mr Madonsela noted that the Department would appreciate adequate time in another meeting to address issues such as that of disability.

Mr Masutha replied that the Committee had gone to the provinces to see how the transitional processes were unfolding, particularly in view of the fact that this would now be a national function. In terms of the way forward, the Committee should agree with the Department on the frequency and way in which they would exercise oversight over the Agency.

Mr Mkongi noted the importance of Member’s receiving information ahead of time.

Ms Bogopane-Zulu supported the idea of a dedicated discussion on disability issues, but reiterated her question on the employment of disabled persons, and whether IT systems would be able to respond to disability-friendly software.

Mr Madonsela replied that the Department of Social Development was one of the few departments that had exceeded its disability targets, and the Agency was based on similar principles. Very few posts were being recruited, as most staff was being transferred. The comment in respect of the IT user-friendliness would be taken to the IT people for comment.

Mr Masutha reiterated the imperative that persons who were historically discriminated against be allowed equal access, and that this included the disabled. The Department should be expected to lead in this respect.

Department briefing on Legislative Framework
Ms L Pembe (Department Director of Legal Services) noted that the amendments considered related to matters affecting the transitional arrangements, the establishment of appeal institutions, the review of definitions, including that of disability, the insertion of such sections into current legislation in order to align the legislation to current policy considerations. Draft Regulations had been published for comment in early 2005, and public hearings held. Some of the issues that had arisen during the public hearings related to the acceptance of alternative identification, for example.

Discussion
Ms Bogopane-Zulu noted that the presentation was not helpful for anyone who had not seen the Regulations, as it was too short on content. Members should be given copies of the Regulations and be informed of the Department’s plans.

Mr Nzimande agreed and noted that the consultative process needed to be adequate to ensure the best interests of the beneficiaries, particularly in respect of the care dependent grant.

Mr Masutha remarked that there should be a future meeting where the draft Regulations were presented. The Chairperson agreed and noted the importance of receiving documents timeously.

Ms Pembe replied that it was still possible to consider comments around issues such as the care dependent grant.

Mr S Jehoma (Acting Deputy Director-General) noted that Members might recall that, in previous changes to the Regulations, the Department had always come back to the Committee to consult. The Department was looking at finalising the Regulations and liaising with National Treasury, and they would return to the Committee to brief them on their content, within the next month or so. The Social Assistance Act had never been intended to introduce major policy changes, but there had been extensive public consultations. There had also been consultations with civil society in respect of the Regulations, and these had been extensive.

Department briefing on oversight of the transition to SASSA
Ms P Maloka (Department Acting Chief Operations Officer) gave a progress report in respect of the oversight optimisation process, the management of the transition, governance framework and interface management, and the Department’s initiative to enhance service delivery. The attached presentation includes details of the plan.

Discussion
Mr Masutha noted his interest in the intention to define demarcation, and suggested that the Committee should follow this up. He had not had a sense of feedback on the challenges posed by the transition so far. On the oversight visit, the Committee had noticed that in smaller towns with smaller infrastructure, there was no physical space for both the Department and SASSA. A number of contractual engagements would have to be put on hold, such as office leasing arrangements, and in many instances, existing service providers were not in a position to modernise equipment. It was essential that the Committee hear about the challenges as well as the plans. The phases, milestones and timeframes were also not clear.

Mr Nzimande asked how many computers and buildings were to be taken over, and whether numbers had been finalised.

Ms Bogopane-Zulu noted that, when the Committee did oversight, it was also trying to determine how informed people were on the processes. There had been little sense of this during their last oversight visit. The presentation seemed very positive, but the provinces were complaining. Was there any way to get the provinces to the intended level?

Ms Maloka noted that the process had been carefully considered, and that operations had been started. Each province would be visited, and the process validated. The functions to be migrated had been ring-fenced, but they still had to be validated. There would be major challenges, and problems would emerge as the Department went through the provinces.

The Chairperson remarked that, in some provinces, Social Development was mixed with Health. Clarity was needed on how the funds required for social services would be assigned.

Mr Madonsela replied that, in the current period, the money for grants was effectively ring-fenced, and was therefore separate from other provincial monies. As soon as the Agency was fully operational, it would have a budget completely separate from that of the Department, and provincial departments would only have budget relating to the developmental projects of Social Welfare Services, which would form part of the equitable share. There had been advocacy for budgets for other residual needs, and provincial departments had made budget bids for a range of services. The task remaining was to justify the sizeable budgets required for provincial departments to deliver.

Ms Direko expressed a concern that the Department would become the "step child" Department.

Mr Madonsela pointed out that over the years, Social Welfare Services had been rendered with only approximately three per cent of the budget. The starting point was now that three per cent, and the Department felt that it was in a better position to lobby for more money.

Ms Bogopane-Zulu asked how the reporting mechanisms would be managed, and whether the Department would be monitoring itself.

Ms Chalmers asked how conditional grants would be managed, as money would still be needed at provincial level.

Ms Maloka replied that the Department had felt that conditional grants and their management required another full presentation to the Committee. Measures had been put in place, including a monitoring plan. The Department would appreciate the opportunity to deal with the issue in another meeting.

The Committee agreed to invite the provinces to participate in the process, and that a further dedicated day would be required.

The meeting was adjourned.