Indemnity Project Progress Report: Department briefing

Meeting report

SOCIAL SERVICES SELECT COMMITTEE
7 June 2005
INDEMNITY PROJECT PROGRESS REPORT: DEPARTMENT BRIEFING

Chairperson: Ms J Masilo (ANC)

Documents handed out:
Department of Social Development briefing on Indemnity Project
Draft Report: Oversight visit to Northwest
Draft Report: Oversight visit to Gauteng

SUMMARY
The Department of Social Development briefed the Committee on its Indemnity Project. This formed part of the campaign to eradicate fraud and corruption in the social assistance grant system. The Department felt the project had been a great success, with many people having applied for indemnity who had previously received ineligible grants.

The Committee raised important issues around foster care, Disability Grants and safety checks for the system. Members stressed the need to familiarise themselves with the Department’s booklet outlining grant eligibility. It was agreed that the Department would later brief the Committee on the Means Test used in the process.

Regarding the Older Persons Bill, the Committee was still waiting for mandates from provinces and the Clerk would ensure that mandates were received before 14 June.

MINUTES

Department of Social Development briefing
Ms M Mosheshe (Department Director, National Office) presented background to the Indemnity Project. The Minister had made a strong commitment to eradicating fraud and corruption and the project formed a part of that campaign.

The Department had introduced a three-month indemnity period during which time any person, who suspected they might be receiving a grant unlawfully, would have an opportunity to apply for indemnity. The aim was not to grant blanket indemnity, but rather to judge each case on its own merits. The Department had provided one application form to all Provinces with one unified set of guidelines in order to gather detailed information from applicants.

The Minister, in consultation with MinMEC, had agreed to grant amnesty to applicants. Once people came forward, their grants would be suspended immediately. This would create a financial saving for the Department. If after investigating, cases were found valid, the grants would be reinstated.

Forms would be completed in Provincial District Offices and then sent to the Legal Officers in the divisional offices that were then responsible for checking the information and making recommendations to the head of the Department.

While the outcome of each case was determined on its own merits, the Department divided criteria for indemnity into three categories. In cases where people were very poor, civil proceedings would cause hardship and the Department would be unlikely to recover any money. Cases where people were able to refund the money owed and were prepared to sign an acknowledgement of debt were the second category. Cases of indigent people living below the means test were the final category.

Cases that were excluded from indemnity would be those under investigation, syndicate cases and any cases that involved public servants.

Media publicity and imbizos had encouraged the public to come forward. Large numbers of indemnity applications had been received and the project had been deemed a huge success. By the end of March 2005, 85 000 applications had been received. The grants were suspended pending investigation, saving the Department a large amount of money. The fraud hotline received a further 9721 calls from people who feared arrest. The indemnity process was explained and the callers were advised to complete the forms at regional offices.

About 40% of applications had related to Child Support Grants, indicating that those grants were particularly vulnerable to abuse and that the existing loopholes needed to be closed.

The process of indemnity would be finalised by the end of June 2005 and exact figures would then become available.

The Special Investigation Unit (SIU) would investigate all cases where indemnity was not granted. A process of civil recovery would be implemented.

Cases where people had suddenly cancelled or not collected grants were being viewed with suspicion. These cases were being identified and would be investigated.

The Department had calculated an annual saving of R225 million from the Indemnity Project. The funds would be re-routed to genuinely needy cases as well as to improve service delivery.

The Department had chosen the indemnity route rather than the formal legal one, as it was far less time consuming and more economically efficient.

Discussion
Mr B Tolo (ANC) asked how the Department intended improving what was clearly a porous system so that it would no longer be abused.

Mr S Jehoma (Chief Director DSD) described the initiative around the improvement of grant allocations. The Department was moving away from the fragmented Provincial system to one unified system of norms and standards. There was a need for additional staff. There was also a need for system controls to prevent such levels of fraud from occurring.

Mr Tolo asked why other government agencies were not being used in the investigations besides the SIU.

Mr Jehoma said that other counties had a dedicated staff to deal with investigations. At this stage, the SIU was the best option until such a capacity was built into the Social Security Agency.

Mr Tolo pointed out that corruption seemed to have occurred at a Provincial level with some officials having been involved. Yet, the Department was allowing Provinces to process and verify indemnity applications.

Mr Jehoma responded that that was indeed an enormous challenge and added capacity was needed. Staff in the regions had in many instances never seen the Social Assistance Act. Staff had been dismissed and some 35 000 employees had begun to receive training in the Social Security legislation.

He noted that the Legal Services Directorate in the Provinces was being deployed to process the applications and they were not involved in grants.

Ms Mosheshe added that during the processing of applications, the Department had kept a close check on proceedings in provinces.

Mr M Sulliman queried whether any person over the age of 65 was entitled to a pension.

The Chairperson asked whether a grandparent looking after a grandchild was eligible for a Child Support Grant if the child’s parents were working and living elsewhere.

Ms Mosheshe and Mr Jahoma responded that the common law principle applied. The caretaker of the child would qualify for a grant regardless of whether they were the biological parents or not. If however the caregiver were earning an income, they would not qualify.

Ms H Lamoela (DA) said that a table outlining grant eligibility was available and should be distributed to the Committee.

Ms N Madlala-Magubane (ANC) raised her concern over Foster Grants in cases where children were not being properly cared for.

Ms Mosheshe responded that a valid court order was needed in order to receive a Foster Care Grant. There had however been cases of fraudulent court orders and false identity documents, and this needed to be investigated and eliminated. The Department was committed to closing such loopholes.

Ms N Madlala-Magubane knew of cases where doctors had declared people unfit to work and eligible for a disability grant when this was not in fact true.

Ms Mosheshe said that thorough investigations were being conducted by the SIU, and a number of doctors and lawyers would be arrested.

Mr Jahoma added that both government and private doctors had been involved in disability grant fraud. In some cases however, doctors genuinely did not understand the law relating to the definition of disability and retraining needed to take place.

Mr J Thlagale (UCDP) noted that during the transitional period between the ‘homeland system’ and democracy, many semi-retired people in his township had applied and qualified for the old age pension. It was possible these pensions had been granted under the ‘old system’ although they were not eligible.

Mr Sulliman suggested that the Committee assist the Department by doing oversight work on all the issues that would be raised during the constituency work period at the end of June. He added the need for a booklet outlining grant eligibility.

Mrs Lamoela insisted there was such a book, and she felt the need for an Afrikaans version for the rural areas.

The Chairperson noted that the booklet needed to be available in a number of indigenous languages.

Ms Mosheshe explained that a public servant earning a low income might qualify for a portion of the social assistance grant to make up the difference.

Ms Mosheshe noted that in terms of the Social Assistance Act grants must be reviewed and renewed annually.

Mr Jahoma pointed out that annual grant reviews were limited, both by people not complying and by the Department’s limited capacity.

Mr Jahoma made a commitment on behalf of the Department to sending booklets and presenting a detailed explanation of the Means Test to the Committee at a future meeting.

The Chairperson raised the issue of children continuing to receive parents’ pensions after they had died.

Ms Mosheshe and Mr Jehoma outlined the importance of interfacing with Departments such as Home Affairs to have regular updates on the status of people. The system had been manipulated for fraudulent purposes but was in the process of being reformed.

Mr M Thetjeng (DA) noted that many young unmarried girls who had had babies applied for and received Child Support Grants even if they were living with working parents and studying at university. The broader family income base was not being taken into account and this was diverting grants from the very poorest and needy.

Ms L Peterson (Parliamentary Officer) requested suggestions of preferred languages for the booklet and Members responded that they would let her know.

Adoption of minutes
The Committee Clerk’s minutes of 31 May 2005 were adopted without discussion.

Adoption of North West Province Oversight Report
The report had been read at the previous meeting and was adopted with minor corrections.

Older Persons Bill
The Committee was still waiting for mandates from provinces for consideration on the Older Persons Bill. The Secretary was mandated to check with all provinces so that mandates were received before 14 June.

The meeting was adjourned.