The South African Social Security Agency (Sassa) has called on beneficiaries whose social grants are illegally deducted by insurance companies to come forward and report it to their nearest Sassa branches.
Sassa was reacting to the allegations that insurance companies deduct money from the beneficiaries, mostly pensioners, without their consent.
Sassa investigates unauthorised deductions
“Sassa views allegations of unauthorised deductions from social grants in a very serious light, particularly where vulnerable beneficiaries may have been misled or deceived into signing documents linked to funeral policies,” said Sassa spokesperson in Gauteng Lungelo Mkamba.
The agency has noted the allegations relating to two pensioners, where deductions were allegedly processed without their knowledge or informed consent, he said.
“At this stage, we require the affected beneficiaries to formally report the matter at their nearest office for a proper investigation into the deductions and the processes followed.”
Beneficiaries may also dispute a policy by sending an SMS to 34548, and include their ID number and the name of the company involved.
Alternatively, beneficiaries may contact the insurance companies directly to lodge disputes and request cancellation of the policies.
Mkamba said people should know that the agency does not work with insurance companies or funeral service providers to enroll beneficiaries into financial products without their full knowledge and informed consent.
Sassa denies working with insurers to enrol beneficiaries
“Any deductions processed against social grants must comply with the provisions of the Social Assistance Act and applicable regulations.
“In terms of Regulation 29 of the Social Assistance Act, only one deduction, not exceeding 10% of a beneficiary’s grant, may be permitted for a funeral policy issued by a registered insurer, and only where valid consent has been provided by the beneficiary.”
No deductions are permitted on child-related grants, including the child support grant, foster child grant, temporary disability grant and care dependency grant, he added.
Sassa continued to implement several measures aimed at protecting beneficiaries from fraud, exploitation, misinformation, and unethical conduct, Mkamba said.
“These interventions include ongoing beneficiary education campaigns, community outreach programmes, stakeholder engagements and media awareness initiatives informing beneficiaries of their rights and responsibilities.”
The agency regularly encourages beneficiaries to exercise caution before signing any documents and to seek clarity regarding any financial products linked to their grants, he added.
Pensioners allege Clientèle and Two Mountains deducted money unknowingly
The Citizen has seen documents relating to two pensioners who are accusing Clientèle Life Assurance and Old Mutual group’s Two Mountains.
A pensioner who asked not to be named said he received an SMS stating that Clientele will from this month deduct R190 “for the funeral cover that I did not sign for. I don’t remember consenting to this,” said the angry 65 year old.
Another pensioner, a 67-yearold granny, said she was shocked to discover that Two Mountains “will deduct R172 for the funeral cover that I did not sign for. I immediately reported the matter to my children”.
Two Mountains has not responded to the alleged illegal deductions.
Clientèle answers
An edited version of Marilyn Pillay-Gumbie, group compliance officer for Clientèle, responding to the alleged unauthorised deduction from IJ Webster’s Sassa grant:
“We are concerned by the allegations raised regarding the sale of a financial product to the complainant and subsequent deduction from their Sassa grant, and want to assure you we take this matter extremely seriously as we believe in treating customers fairly at all times.
We have taken immediate action. We launched a formal investigation and engaged directly with the client.
As a result, the policy has been cancelled and a refund of the deducted amount will be processed on receipt of the client’s bank confirmation letter and a copy of their identity document.
The client has also been advised to contact us directly should any further deductions occur.
By way of important context, the sales in question were conducted by independent brokers. While these brokers are contracted to distribute Clientèle products, they are not employees of Clientèle and operate as registered financial services providers (FSPs) in their own right. As independent licensed FSPs, they bear primary responsibility under the FAIS Code of Conduct to render financial services ethically and to treat clients fairly.
We are also aware there may be other individuals in the same community who were similarly affected. We are actively working to establish the full extent of the impact and will investigate every case individually. Where any wrongdoing is confirmed, refunds will be processed without delay, policies will be cancelled and appropriate action will be taken against those responsible.”
