Tamar Kahn
23 June 2005
Cape Town — SA's top banks yesterday agreed to help the social development department stamp out fraudulent claims for social grants, Social Security Agency CEO Fezilie Makiwane told Parliament yesterday.
Social Development Minister Zola Skweyiya said recently an estimated R1,5bn of the country's R55bn budget for social grants was lost to fraud. About 9,7-million South Africans receive social assistance, such as pensions, disability benefits and child support grants.
Makiwane said a preliminary investigation by banks had uncovered R60m lying unclaimed in bank accounts in Eastern Cape.
It was unlikely that poor people genuinely entitled to social assistance would leave untapped funds in their accounts, he said.
Makiwane told Parliament's portfolio committee on social development that in some cases it appeared grants had been paid into the accounts of people who were dead, because of delays in getting essential information from the home affairs department to banks and the social development department.
The bank accounts of deceased people are frozen by financial institutions only after they have been notified formally of the deaths.
Makiwane said families sometimes delayed reporting deaths to the home affairs department, but conceded that there were also problems in relaying information to the parties concerned.
In addition to discussing how the banking sector could assist in eliminating corruption in the social grant system, the financial institutions also considered how the banks could increase the number of grant recipients who held bank accounts, said Banking Council CEO Cas Coovadia.
Makiwane said only 2-million beneficiaries had accounts at banks or the post office, making the rest who do not have bank accounts vulnerable to theft.
Banks needed to expand their activities into rural areas, which were home to almost 60% of grant recipients, he said.
Although some of SA's banks launched the low-cost Mzansi account last October, it has signed up only 1-million customers so far.
Makiwane suggested the transaction costs of the Mzansi accounts might be too high for some grant recipients, and said the banks were discussing the possibility of new products.
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