NATIONAL ASSEMBLY
QUESTION 1899 /2014
FOR WRITTEN REPLY
Date of publication on internal question paper: 17 October 2014
Internal question paper no: 19
1899. Ms S P Kopane (DA) to ask the Minister of Social Development:
(1) Did her department strengthen the Regulations of the Social Assistance Act, Act 13 of 2004, and related legislation to (a) stop the use of social grants as collateral for loans and (b) hold reckless lenders to account; if not, (i) why not and (ii) when will this happen;
(2) has she taken any steps to establish the Inspectorate for Social Assistance as envisaged in the Social Assistance Act, Act 13 of 2004? NW2281E
Reply:
1. (a) Yes. Draft regulations will be published for comment shortly which prohibits the retention of the new SASSA branded smart payment card and any contravention thereof renders one liable to prosecution.
(b) Yes. I have received the report from the task team on deductions comprising of officials from Department of Social Development (DSD), South African Social Security Agency (SASSA), Black Sash and civil society organisations which confirmed the existence of these immoral, illegal and unauthorized deductions from social grants and recommended the stoppage thereof.
This prompted me to issue an instruction to Cash Paymaster Services (Net 1) to cease with deductions from social grants with immediate effect. The National Credit Regulator (NCR) is currently pursuing a case against Moneyline, a subsidiary of Net 1 Holdings. However, SASSA in conjunction with the NCR and the South African Police Service (SAPS) is undertaking on-going raids on these unscrupulous money lenders who prey on our beneficiaries.
(i) Reckless lending falls within the ambit of the National Credit Act (NCA) and hence the responsibility for enforcement thereof lies with the National Credit Regulator.
(ii) The NCA is being amended and the African Bank debacle has led the NCR to review reckless lending provisions in the Act.
2. A Business Case for operationalization was submitted to the Minister of Public Service and Administration for concurrence and approval of the incubation structure on 10 August 2014. A team comprising officials from Social Development and the Department of Public Service and Administration has finalized the logistics to enable staffing of the Inspectorate by the end of this financial year. The Department is also taking steps to amend the Social Assistance Act, (13 of 2004) to allow the Inspectorate to be a Government Component - to guarantee its independence.
Issued by Parliament, November 18 2014
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