Social Assistance Bill and the South African Social Security Agency Bill: hearings

Meeting report

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
23 September 2003
SOCIAL ASSISTANCE BILL AND THE SOUTH AFRICAN SOCIAL SECURITY AGENCY BILL: PUBLIC HEARINGS

Chairperson: Mr E Saloojee (ANC)

Relevant documents:
Social Assistance Bill [B57-2003]
South African Social Security Agency Bill [B51-2003]

Documents handed out:
Joint Submission by COSATU, NEHAWU, Black Sash and UWC
Joint Submission on the Social Assistance Bill by COSATU and NEHAWU
Department of Justice and Constitutional Development submission
United Nations High Commissioner for Refugees (UNHCR) submission
United Nations High Commissioner for Refugees (UNHCR) PowerPoint presentation
South African Council of Churches (SACC) submission
Agency for Refugee Education, Skills Training & Advocacy (ARESTA) submission
Accenture submission
Advisory Board on Military Veterans' Affairs submission (document awaited)

SUMMARY
The Advisory Board on Military Veterans' Affairs (ABMVA) proposed that provisions be made in the Social Assistance Bill for grants to military veterans who qualified for state aid and who had been both income- and means-tested. These individuals had specialised skills and were therefore difficult to absorb in the mainstream economy. COSATU and NEHAWU made a joint submission that they would not support or accept the Agency until there had been engagement with key stakeholders.

The Department of Justice and Constitutional Development requested a change in Clause 31 of the Social Assistance Bill so that the judge or magistrate could have discretion in issuing a warrant.

The United Nations High Commissioner for Refugees (UNHCR) was of the view that under international and national obligations, South Africa had to include refugees in its social security arrangements. This would involve very few additional people since there were 25 000 refugees and most of these were self-reliant.

The SACC held that action on the Bill should be deferred until a proper policy framework had been developed. If the Bill had to go forward, permanent residents, refugees and asylum seekers and their dependents and undocumented children had to be recognised; means tests had to be prohibited; social relief of distress grants had to be integrated and not left to provinces; the section on the misuse of grants had to be more narrowl; the search and seizure powers of the Inspectorate had to be removed and its mandate narrowed; and the reference to welfare organisations that could receive financial awards from the Minister had to be altered to refer to public benefit organisations as recognised by the Commissioner of Revenue.

ARESTA stated that refugees had to be included in social assistance under the same terms as citizens. The Committee had to consider alternatives to the identity document and number as proof of identity since refugees had difficulty obtaining these due to a backlog at Home Affairs.

Accenture advised that the agency envisioned in the Social Security Agency Bill had to be properly structured and conceived to avoid perpetuating current problems. The Bill should provide for this in its outline. Strong leadership, staff appointment based on skills and agency-needs, explicit attention to fraud, a mandate for interaction with third parties and financial management were important. The CEO should report to an independent board,which should incorporate stakeholders.

The Committee agreed that they should examine an early return at their next sitting to complete work on the Bill.

MINUTES
The Advisory Board on Military Veterans' Affairs (ABMVA)
Rear Admiral (JG) Lukas Bakkes (Director) said the Board aimed to achieve the objectives of the Military Veterans Affairs Act, No 17 of 1999. It was therefore necessary that provisions were made in the Social Assistance Bill for grants to military veterans who qualified for state aid and who had been both income- and means-tested. The War Veteran grant had to be updated as it had been issued only up to 1952. A military veteran had first to be identified on a database and then eligibility for a grant could be determined. Rear Admiral Bakkes proposed that Sections 4(a) and 5(2)(d) be amended by adding "and to military veterans". Section 5(1) should include a new sub-section so that military veterans, as defined in the Military Veterans Affairs Act of 1999, were entitled to social assistance. Also, a section referring to a War Veteran grants must be inserted in the Bill. This grant would entitle female veterans to social assistance after reaching age 55, and men after reaching age 60.

Mr Deacon Mathe (ABMVA chairperson) added that South African military veterans had pursued the political and economic objectives of this country. These individuals have specialised skills and were therefore difficult to absorb into the mainstream economy. It had been identified that most military veterans were helpless in this regard and were anxious for social assistance.

During question time, Ms G Borman (DA) asked the reason in the age difference between male and female veterans eligible for the War Veteran grant.

Rear Admiral Bakkes answered that very few women had participated in World War II, while many more had been involved in the struggle.

The Chairperson asked why provisions for military veterans should be made in the Social Assistance Bill in particular.

Rear Admiral Bakkes said that certain categories of veterans did not qualify for special pensions. No eligible military veteran should be excluded from receiving a grant.

Mr Mathe explained that most people did not qualify for special pensions because they had served for only 3-6 months, while others who had served for ten years also found themselves without any kind of assistance. The age categories for eligibility for a grant were similar to those used all over the world. The War Veteran Grant amounts to R680 per family and the request for an additional social grant was not unreasonable.

Professor L Mbadi (ANC) asked about the difference between a war veteran and a military veteran.

Rear Admiral Bakkes stated that the term "war veteran" had been used before World War II and had negative connotations attached. "Military veteran" was a more appropriate term.

The Chairperson asked why military veterans were subjected to the same income and means test as ordinary citizens.

Rear Admiral Bakkes explained that one's life expectancy was shorter if one served in the military, and therefore the Military Veterans' Grant should be issued five or ten years before standard grants were issued.

Joint Submission by NEHAWU and COSATU
Mr Mark Sweet (NEHAWU) presented to the Committee on the SA Social Security Agency Bill. The main concern was whether the proposed Agency would serve the interests of beneficiaries. The Department would surely be able to deliver these services better than the Agency. It was worrisome that major institutional reconfiguration was to be initiated while the Taylor Committee's recommendations were still being considered. Mr Sweet highlighted problems of poor management, regulatory barriers and the assignment of the administration of the Social Assistance Act to provinces. It was unrealistic to assume that the situation would automatically improve with the assignment. Other flaws in the Agency Bill included lack of cogniscence of the difference between IT-based and service delivery agencies. Duplication would continue on specific functions and would increase costs significantly. The lack of binding norms and standards was a serious problem. The question was around whether the Agency would fit into integrated public service. Agentisation will fragment the public service and reflect a dislocated approach to service delivery.

The Department of Public Service Administration (DPSA) and National Treasury had developed a business plan to review all public entities. There was no clear reason why the Agency should be separate from the Department. Service delivery could be improved with the invalidity of assignment, centralising social delivery within the Department, clear articulation of the Minister's responsibility, delegation of social assistance delivery functions to provinces where necessary, development of a focused human resources strategy, implementation of national norms and standards and the monitoring of social security access.

Mr Sweet said that the NEC of NEHAWU had decided on an immediate dispute with the Department through the Health and Welfare Sector Bargaining Council because an incomplete policy could be implemented. To approve these Bills at the time of Parliament's closing, affected the quality of both Bills. The fact that there was no reference to the changes recommended by Treasury and that no liaison had taken place with DPSA was very serious. The human resource problems were best dealt with by the integrated strategy developed by DPSA last year. Problems in this area included resource and personnel distribution disparities and inadequate training and capacity building. A restrictive fiscal policy presented another problem because reduced staff numbers would impair delivery. Judging from past experience, private contractors would not be effective in this area. The Bill was also restrictive in terms of administration because systematic problems faced would not be solved by transferring the function from the Department to the Agency.

Mr Sweet added that, in line 2 of the long title, "sole" be inserted after "an" so that the Agency did not become contractive. He also proposed that clause 4(2)(a) in Chapter Two should be deleted as it allowed for continued private provision of payments. The following clause 4(3) would then be made redundant and also have to be removed. A new subclause 5(7) in Chapter Three would provide that the Minister's decisions overrode those of the CEO. A new subclause 5(8) allowed that the Minister to give direction on decisions made with regard to policy-making. A new subclause 5(9) would hold the CEO accountable to the Minister. An addition to clause 6(1)(b) would require that the Minister receive quarterly reports on Agency affairs. He recommended that clause 6(1)(c) and (d) be deleted.

The Chairperson alerted Mr Sweet that there was no more time and invited an address from COSATU

Mr Sydney Kgaera (COSATU) pointed out that the submission was made on short notice and under protest. Concerning the concept of overarching social security legislation, a clear policy framework was necessary before any legislative reform could take place. The Taylor Committee's report was of critical importance when considering the fragmented and expedient ad hoc current reform initiatives. Regarding the transitional framework, there was no reference made to the Department resuming the execution of social assistance competency.

COSATU was opposed to the fragmented approach to social protection reform without engaging key stakeholders, especially organised labour in terms of the NEDLAC Act and the Public Service Act. COSATU called for the suspension of further consideration of both the Social Assistance Bill and the Agency Bill until such engagement.



Discussion
Ms G Borman (DA) asked whether it had considered that the Agency would be funded out of the Department's budget vote and not its own budget vote. She conceded that both Bills would be rushed through but asked whether amendments to the Bills would be satisfactory.

Mr Neil Coleman (COSATU) pointed out that it would a fundamental mistake to rush the Bills because both had far-reaching implications. The proposal for the Agency was fundamentally flawed. Bills would be preferred without amendments, but would not be supported even with amendments. The necessary steps as described by Mr Sweet should be implemented before the Bill was processed in its amended form.

Mr Kgaera added that the situation would be even worse if funds were appropriated from Parliament. The functions envisaged for the Agency should remain within the Ministry.

Ms Borman said that 90% of the provincial budgets would be taken to establish the Agencies. The Committee's concern was related to staff left behind after the establishment of the Agency.

Mr Sweet said that the question had been raised many times. The support function and the social assistance function were equally important. The DPSA has acknowledged the problem and had gone into a human resources management process to look at weaknesses. Provincial issues should be delegated. Treasury should look at funding and determine which areas should be augmented for a qualitatively better system.

Mr Coleman added that the COSATU/NEHAWU approach was shared by a number of other civil organisations.

Ms C Ramotsamai (ANC) commented that COSATU and NEHAWU were key organisations in terms of human resources. The Department should meet with both organisations so that there could be some kind of compromise. The Agency could not work if human resource issues were not addressed. The Bill had to be able to be applied.

The Chairperson noted that time had elapsed and adjourned for lunch.

Department of Justice and Constitutional Development presentation
Adv M Attridge, on behalf of Adv P du Rand (Chief Director: Court Management, Department of Justice and Constitutional Development), stated that the Department was concerned about Clause 31 of the Bill that provided that a Judge or Magistrate had to issue a warrant under certain circumstances to a Social Assistance Inspector to enter, search or seize. This removed judicial discretion. Judicial independence had to be protected and the Department recommended that 'must' be changed to 'may'. If the Inspector or Department of Social Development did not agree with the court order, they could lodge an appeal or request a review.

United Nations High Commissioner for Refugees (UNHCR) presentation
Ms B Donkoh (Regional Representative, UNHCR) noted that South Africa had signed a number of conventions on the rights of refugees and refugee children. These international obligations and those imposed by the Constitution and Refugees Act required that refugees receive the same treatment as South African nationals with respect to public relief and assistance, and social security.

There were 25 000 recognised refugees in South Africa. Persons applying for asylum went through a process to assess their claims for refugee status. A majority of the refugees were young, male and educated beyond secondary school level, with most coming from central African states. They were capable and most become self-reliant in a short time. The refugees under consideration were the most vulnerable like women and unaccompanied children. Their numbers were small and they would be totally unprotected if not covered by the Social Assistance Bill.

The UNHCR was concerned that the Bill did not mention refugees despite South Africa's national and international obligations. There was no mention of refugee children despite the Committee of Inquiry having seen them as a group that merited assistance. Refugees should be included in the proposed social security schemes and social assistance in the Bill.

Discussion
The Chair asked if these issues would be better dealt with in the Refugees Act.

Ms Donkoh replied that while this might be the case, there was no provision for social security in the Act. It regulated the process of recognition of refugees and the circumstances of their treatment. There were plans for a refugee relief fund, but this would be very general. The UNHCR had in mind refugees that found themselves in the situations provided for in the Bill, such as unaccompanied child refugees. In such cases, it was preferred that children be placed with others of their culture, but such refugees were not usually in a position to support children without assistance.

South African Council of Churches (SACC) presentation
Mr E McKew (Director in National Office, SACC) gave the presentation, accompanied by Mr D Tilton (Associate for Research & Communication, Public Policy Liaison, SACC). The central theme of the Reconstruction and Development Policy remained apt - political democracy could not flourish if the mass of people remained in poverty. A comprehensive and integrated system of social protection was critical and the Bill did not have the capacity to improve the social security net. The SACC expressed concern at the unconstitutional exclusion of certain groups.

The 1997 White Paper stated that the Government was to take steps to ensure the progressive achievement of social security. The White Paper highlighted the importance of social grants, with universal access to the social security system and criticised the patchwork of welfare policies and legislation, stating that legislation would be the end-product of and not the initial impetus for policy formulation. It recognised that amendments may be necessary, but these should be consistent with overall policy as far as possible. The Taylor Committee report represented the next step after the White Paper, but the Government had yet to present a structured response to it.

The Bill did little to realise the White Paper's vision. The Department portrayed the Bill as largely formalistic, giving the national Department greater capacity to implement a uniform, coherent delivery system. However, the changes that the Bill made to the grant administration were at times at odds with the core objectives of the White Paper. Action on the Bill should be deferred until a proper policy framework was developed and the Department should engage with a broad cross-section of stakeholders.

If the Bill had to go forward, certain changes were necessary. It made no attempt to extend access to nearly 12 million poor people in households with no current access to social assistance. Permanent residents, refugees and asylum seekers and their dependents and undocumented children should be recognised in Clause 5(1)(c). Clause 5(2) should prohibit the use of means testing. Social relief of distress grants should be integrated into the Bill rather than left to provincial departments. Clause 19 on the misuse of grants must be more narrow. The search and seizure powers of the Inspectorate must be removed and its mandate narrowed; inspectors could collaborate with the police should any search or seizure be necessary. The reference in Clause 13 to 'welfare organisations ' that could receive financial awards from the Minister should be altered to refer to public benefit organisations as recognised by the Commissioner of Revenue. 'Welfare organisation' was no longer defined in law.

Discussion
Ms G Borman (DA) asked what categories of person the SACC thought were being unconstitutionally excluded.

Mr McKew replied that the categories were listed in bold text in paragraph 16 of the submission. ['…the eligibility of permanent residents, refugees and asylum seekers and their dependents and undocumented children should be recognised…']

The Chair asked for clarity on the 12 million people to whom the Bill did not attempt to extend access.

Mr Tilton replied that no social assistance was given to working age people unless they were disabled or eligible for unemployment benefits. There were 12 million people that are neither directly nor indirectly covered (through living in a household with access to social grants). The Bill made no attempt to extend support to them. The SACC supported the basic income grant and the extension of current benefits and the basic income grant. This seemed the best approach, but other means might be found to address the problem.

Ms Borman asked if the SACC felt that the Bill could take matters forward. She noted that they stated that legislation should proceed from a policy document. Could the SACC support the Bill with amendments?

Mr McKew replied that the SACC had great difficulty with the Bill. It had so many problems that it was hard to see it as part of a process that would enhance social security.

Ms J Chalmers (ANC) asked for the SACC's opinion on the Inspectorate. A problem with administration was the fragmentation of means to deal with infractions - the inspectorate would consolidate these functions in one body. Did the SACC think its powers too broad or did they hold that such a body was inappropriate?

Mr Tilton replied that the SACC did not oppose the notion of an Inspectorate. Their concerns centred on its powers, especially those of search and seizure, and the comments around misuse of grants.

The Chair responded that the Committee had already suggested that Clauses 30-32 on the powers of search and seizure, be removed and the Department had acceded to the request.

Agency for Refugee Education, Skills Training & Advocacy (ARESTA) presentation
Mr C Carbutt (Education & Advocacy Officer, ARESTA) gave the presentation. ARESTA wished to highlight the exclusion of refugees from the Social Assistance Bill. South Africa is obliged under international and national law to include refugees under the same terms as citizens.

The Bill limits assistance to non-citizens to those with whose countries South Africa has an agreement. It is unlikely that such agreements will have been concluded with countries from which refugees are fleeing. Clause 5(2) requires proof of identity and status for claiming grants. Proof of identity can be a problem for refugees - although they are entitled to identity documents under the Refugee Act, a backlog at Home Affairs meant that very few had them.

Discussion
A member asked if ARESTA had considered problems encountered in South Africa around marriage and how influx of refugees would be controlled. He agreed with most of what ARESTA had said but South Africa would experience problems with people flocking to the country.

Mr Carbutt responded that people did not get refugee status immediately. They were first given asylum-seeker status and only received refugee status after the necessary processes. This meant that there were fewer people with refugee status than there were asylum seekers. ARESTA was only proposing the inclusion of refugees, not all migrants to South Africa.

The member responded that he was concerned that as soon as refugees were allowed to claim benefits, their numbers would increase.

Mr Carbutt responded that criteria could be worked out for assistance to refugees.

Mr M Da Camara (DA) asked what checks ARESTA had in mind for proof of identity other than identity documents and numbers.

Mr Carbutt replied that the problem was that many refugees did not have identity documents and numbers because of the Home Affairs backlog. Refugees could prove their identity through refugee permits instead of identity documents. The Bill should allow for different types of documentation, including documentation without identity numbers. Under the current system, computers rejected any application without an identity number.

The Chair asked if ARESTA had any concrete suggestions on the Bill.

Mr Carbutt replied that refugees should be added to the Bill and criteria developed for genuine refugees to apply for assistance. The majority of refugees returned home when possible because xenophobia made it difficult to find employment.

Ms Borman stated that there were 25000 refugees. One generally heard that refugees worked very hard. What percentage of refugees would need support?

Mr Carbutt replied that he did not have the figures. UNHCR would be able to provide them. Educated refugees faced problems in that their degrees often were not recognised and they had trouble finding work. Stringent criteria would be important to prevent abuse.

The Chair asked if dealing with refugees was not simply a responsibility of Home Affairs offices, or did ARESTA favour refugee centres?

Mr Carbutt replied that they had not considered refugee centres. Currently, the Government did not assist refugees and the burden fell on NGOs and UNHCR. Home Affairs had an enormous backlog, their systems could not cope and their staff would need training. He did not think Home Affairs could possibly cope with the situation.

The Chair asked if ARESTA was saying that the State should gear itself to deal with genuine refugees and that they should be entitled to state benefits.

Mr Carbutt replied that State should and that refugees should be entitled to benefits.

Accenture presentation
Ms G Mostert (Independent Consultant with Accenture) gave the presentation on behalf of Ms D Zwane (Director, Accenture). Accenture had been a strategic implementation partner of Government in various transformation initiatives and so had extensive experience on the challenges around such initiatives and understood that it was difficult to translate legislation into institutional arrangements. The reality is that many of the challenges to be faced are systemic in nature and the current system is fragmented. A properly formed agency, giving consideration to strategic issues, human resources, performance management, and so on could address this. The challenge lay in working out the goal and how to achieve it. The Bill should provide this framework, albeit not in detail, and has shortcomings that might lead to creating another government department with all the same problems as before.

In Chapter 2 of the Bill, there is ambiguity around the institutional structure of the agency. The Bill does not state its requirements and responsibilities - the agency must not perpetuate current practices.

Chapter 3 contains an emphasis on strong leadership, which is appropriate. However, the Clause on other staff is vague. Staff should be appointed to key competencies - they should not just be transferred from their old jobs to the new agency. The proposed structure simply continues the current structure. The Committee should consider an independent board, reporting to the Minister, to monitor the CEO of the Agency, instead of the CEO reporting directly to the Minister. The Board could draw on stakeholders in its composition.

Financial management, in Chapter 4, is a sound principle. The Bill needs a clearer framework for accountability to deal with fraud. Fraud is only mentioned in the objects of the Bill. A framework should be provided in Chapter 4, possibly with links to the Inspectorate envisioned in the Social Assistance Bill. Funds are assumed to come from budget votes and donations. There might be a future contributory component to funding and the Bill should provide for this.

The intention of the Bill was the creation of an organisation in its own right, not simply an extension of the Department. The Clauses in Chapter 6 should be strengthened so that transfers of staff were driven by the skills required by the agency.

The legislation needed to cater for the end-to-end value chain and not be fragmented. It had to allow for meaningful and explicit interaction with other Departments (for example, Home Affairs, Labour and SARS) and other third parties. The agency would need a mandate for this and it should be provided for in the Chapter on infrastructure and systems.

Discussion
Ms Chalmers asked how Accenture saw the interaction between the national agency and provinces given the history of provincial management of grants. What was the best vehicle to make this happen?

Ms Mostert replied that one of the challenges had been that national government set the standards, but provinces had to deliver on them. The way provinces worked would have to change. The legislation should ensure that there is no duplication or conflict of interest. The agency might have to use existing third party service delivery agreements - the contracts would be taken over and renegotiated by the agency. The agency would have provincial reach but with a clear line between its functions and those of the provinces.

The Chair noted that the national agency would have regional facilities. When Accenture spoke of provinces, did they still see provinces with a direct role or did they have in mind agency offices in provinces?

Ms Mostert replied that if the agency's provincial and regional visibility was as under the current system, this would perpetuate poor practices. If current staff were used, one had to ensure that service delivery was not as in the past. When she referred to provinces, she had in mind the regional presence of the agency. he agency should not be strictly limited to provinces - its regions might cross provincial boundaries where necessary.

Ms Borman noted that some provinces had been improving their systems. Where would the agency improve delivery and what would the difference be?

Ms Mostert answered that there was the opportunity to create a separate entity with a different governance structure and the right people to deliver services. There were serious challenges in government departments - low morale and a 'don't care' attitude. The agency provided an opportunity to introduce new blood and systems. It would still be ultimately accountable to political authority, but if it reported to an independent board that included stakeholders, this would provide an opportunity to do things in a different way. The claim that this would not be possible if it were simply another part of the Department was based on experience. A step-change, not an incremental approach, was necessary. The global trend was towards such an agency. With a group of focused, trained, incentivised people under strong leadership, changes could be made.

The Chair asked why this could not be done to the current system. What made the difference? Attention to training and qualifications was necessary in a new agency. Could Accenture provide information on this?

Ms Mostert replied that it would take a range of new arrangements for the system to work. Accenture had done extensive work on this and had international experience in the area. The agency had to be designed based on an appropriate operating model and Accenture had done extensive work on such models. The Chair responded that such information would be most useful and Accenture should contact the Department.

The Chair asked that members consider returning early for the next session to allow time to do the necessary work on the Bill.

The Department preferred that the Committee complete its work on the Bill in the planned October sitting so that the NCOP would have the Bill in the November session.

Members agreed that an early return should be looked at, with consideration given to member duties around voter registration.

The hearing was adjourned.