A Pandora’s Box of greed has been opened that SASSA alone cannot close.
The Black Sash is deeply concerned about the continued erosion of government social grants by immoral and possibly illegal business practices of SASSA’s contractor, Cash Paymaster Services (CPS), together with its holding company, Net1.
There is mounting evidence that the microlending industry, including many subsidiaries of Net1, are debiting the bank accounts of grant beneficiaries in a manner that is increasingly frenzied and often unauthorised, leaving families with vastly reduced monthly incomes.
We note the statement by the Social Development Minister, Bathabile Dlamini, last week that the Department is considering legal action against CPS. While we welcome this first public acknowledgement by government that things are seriously wrong, we must state that this crisis is not new to the Department or to SASSA. It has been raised as a concern for months and government is aware of the desperate calls to the Black Sash Helpline, to the Legal Resources Centre, to community advice offices across South Africa; and of the evidence submitted by community monitors through CMAP.
Social grants are paid, using taxpayers’ money, to elderly and disabled people, as well as children, who are found through a stringent means test to be in real financial need. How ironic that this vulnerable group is now the chosen target of credit providers using dubious methods, and apparently with personal information from a data base that was to be held in trust by the State and its service providers. Our monitoring tells of grant beneficiaries vulnerable to credit providers in a situation where government regulations are unclear and contradictory, CPS’ systems of recourse ineffective, and their administrators dismissive.
Where the private sector targets public funds for profit, the role of government is clear. The Black Sash calls on government to fulfil its role as a key protector of rights, and specifically for the release of the Public Protector’s investigation. We will work with social grants beneficiaries, civil society organisations and the state to defend our country’s key strategy against poverty – our social grants system. We call on all right-minded people to support us in this work.
21 October 2013
For immediate release