Sassa CEO Themba Matlou emphasised that the agency lacks any legal power to authorise deductions without proper beneficiary consent.
The South African Social Security Agency (Sassa) has raised concerns about a growing trend of unauthorised deductions from social grant payments by financial service providers.
The agency reported on Thursday that it has been flooded with complaints from beneficiaries who discovered their grant money was being deducted by insurance companies they never signed up with.
Many affected beneficiaries mistakenly believed Sassa had partnerships with these companies, prompting the widespread confusion about the legitimacy of the deductions.
Sassa distances itself from insurance companies
The agency has made it clear that it does not work with these financial service providers.
“Sassa has consistently distanced itself from any insurance company that uses the good name of the agency to achieve its goals,” it stated.
Sassa CEO Themba Matlou said the agency lacks any legal power to authorise deductions without proper beneficiary consent.
“We have the utmost respect for our beneficiaries and the Act governing social assistance in the country, and we will never do anything to shortchange our clients,” Matlou said.
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The CEO stressed the fundamental principle governing social grants.
“Your money is your money, if you qualify for a grant, the money belongs to you and as Sassa we have no right, nor authority to dictate how you utilise it,” he stated.
Legal framework prohibits unauthorised partnerships
Matlou stated that Sassa cannot legally collaborate with funeral schemes and insurance companies.
The CEO urged all victims to visit their nearest Sassa office to report these incidents for investigation.
Sassa also provided an alternative reporting method.
“Alternatively, clients who dispute signing a funeral policy with the financial services provider are advised to immediately dispute the deduction by sending an SMS to 34548 with their identity number and the financial services provider’s name,” it said.
Sassa advised that affected beneficiaries should also directly contact the insurer or financial services provider to cancel any unauthorised policies.
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Legal deduction requirements under Social Assistance Act
Sassa reiterated that it operates under strict legal guidelines regarding any deductions from social grants.
According to Regulation 29 of the Social Assistance Act of 2004, the agency can only permit specific types of deductions under limited circumstances.
The agency explained that the regulation allows one deduction per month that cannot exceed 10% of the beneficiary’s social grant value.
Additionally, Sassa said this deduction can only be for funeral policies issued by insurers registered under the Long-term Insurance Act of 1998.
The law requires explicit beneficiary consent through electronic or other forms of communication.
The beneficiary must submit this consent directly to Sassa through electronic communication or other approved methods.
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Child grants and disability grants protected
Sassa emphasised that certain grant categories remain completely protected from any deductions.
“It is important to emphasise that funeral deductions are not permitted from child-related grants, such as the Child Support Grant, Care Dependency Grant, or Foster Child Grant,” the agency stated.
Temporary Disability Grants also fall under complete protection from funeral deductions.
These grants cannot have any amounts deducted regardless of beneficiary consent or circumstances.
