Between June and 31 December, the South African Social Security Agency (SASSA) will hand out the new branded biometric magstripe cards to grant holders, replacing the current Sekulula cards.
The biometric cards will also replace temporary smartcards that social grant beneficiaries in Gauteng, Western Cape, the southern part of the Eastern Cape, Mpumalanga and Free State - provinces which don't use the current service provider - have been using since March.
The first phase of the project, which began in March and ended in May, saw new beneficiaries being enrolled onto the new system.
The second phase, which began this month and will end in December, will see existing eligible beneficiaries, including bank beneficiaries and children being enrolled on to the new system at SASSA pay points, local offices and designated sites.
SASSA will conduct home visits to those older than 75 years old as well as for bedridden beneficiaries at their homes and institutions such as hospitals.
Beneficiaries of the child support grant will be required to bring their babies, along with their birth certificates for re-registration. The child's fingerprints will be taken to verify his or her identity. Beneficiaries will then be issued with a SASSA branded smart-card.
The new cards and the verification process attached to the issuing of the cards will help SASSA to reduce the incidence of fraud and corruption over which the Auditor-General Terence Nombembe has repeatedly raised concerns.
A 2008 report by the Institute of Security Studies, estimated that before the commencement of investigations by the Special Investigating Unit (SIU) in 2006, the government had been losing about R1.5bn a year through corruption and the maladministration of social grants.
The risk of fraud and corruption is ever more important, with the 15.7 million social grant beneficiaries registered as of April 30 this year, expected to grow to 16.8 million in three years.
However, in recent years, SASSA has made several advances in reducing the incidence of fraudulent grant beneficiaries.
Between 2006 and March 2012, the SIU was able to prosecute 20 554 people for fraud and corruption relating to grants, which resulted in 17 880 convictions.
In all, 46 237 individuals who have been incorrectly receiving social grants, have signed acknowledgement of debts totalling R304.9m.
Individuals that sign acknowledgement of debts, which has the effect of a civil court order, commit to repaying the money received in instalments that are financially viable for them.
To this end, a total of 132 603 beneficiaries have been verified for eligibility and existence and 7133 were found to be fraudulent.
Kgomoco Diseko, SASSA's senior manager: Media Relations, said grants paid to the 7133 beneficiaries who defrauded the system were cancelled and criminal charges were also brought against them.
SASSA has also successfully implemented its integrity model which serves to address and monitor irregular practices by both its employees and the public.
Diseko says the integrity model represents a more proactive fraud management approach which encapsulates all aspects of fraud management, namely; prevention, detection, investigation and resolution.
"Its emphasis is on regulating the behaviour of staff, while improving systems and processes. The greatest feature of the model is the integrity policy, which allows the agency to conduct random checks on its high risk employees to determine their level of integrity," he says.
The agency is also participating in anti-corruption forums driven by the Department of Home Affairs.
The Department of Social Development will also be setting up an inspectorate to help the department weed out fraud.
The Minister of Social Development Bathabile Dlamini said in her budget vote in May that R30m had been allocated to set up an inspectorate, which is expected to be up and running by 2015.
Also in May, Dlamini told Parliament that an Inspectorate Establishment Framework had been developed as well as the Inspectorate Programme Management Unit structure comprising various functional work streams.
"The process to recruit Specialists and work stream Project Managers is at an advanced stage," she said.
She said the inspectorate unit was currently in the process to commission various research projects and has since prioritised the Comprehensive Legislation Review Project as well as the Systems Integrity Evaluation baseline study.
"This will enable office to determine the actual levels of fraud and misconduct and help to project savings for the South African Social Security Agency, once the Inspectorate is fully legislated and adequately resourced to commence with the execution of its investigative mandate.
Marika Muller, SIU's acting head of communications says since the SIU's investigation into the SASSA began in April 2005, the unit has helped the government recover over R104.6m.
She says the SIU is still collecting an average of over R2.3m a month in cash repayments from those who claimed grants irregularly.
The SIU has recommended to SASSA that it remove all improperly received grants involving savings to government (and the taxpayer) of over R1bn, and the prevention of future losses of over R11.8bn.
Muller says individuals receiving grants to which they are not entitled generally fall into three categories.
These include individuals who have been found to have purposely lied about their income, employment status and or state of health in order to receive grants.
They also include those individuals who initially qualified to receive a grant, but then saw an improvement in their financial status which generally disqualifies them from receiving grants.
In many cases these individuals do not notify the SASSA of this change in status in order for their grant to be stopped; in some cases, they were not aware they needed to do so, explains Muller.
Finally, there are also individuals who are receiving social grants as a result of errors in the process.
Muller says in the first category of individuals - those who purposely lied about details to gain access to grants - the SIU concludes initial investigations before handing the cases over to the SAPS for a decision on further action.
Criminal charges, she explains, are also laid in instances where individuals had gone more than 12 months without notifying SASSA of their change in circumstances.
"A decision was made with SASSA and other role players that criminal charges would not be laid against individuals who did not understand the reporting obligation, or who erroneously received grants as a result of process errors.
"These individuals are, however, required to pay back the money they were not entitled to either in a lump sum or instalments through an AoD (acknowledgement of debt)," says Muller.
There are also other benefits to the new biometric cards.
The new smartcards will also allow beneficiaries to access grants through multiple channels across the country such as points of sale, banks, merchants and cash pay points.
Dlamini said in her budget vote speech that the new payment system would help the government save R800m a year.
The new system provides for a service fee of R16.44, totalling R2bn collectively in fees a year - R800m less than the total fees generated by the former service provider.
However the former service provider, All Pay, has launched a court bid to have the current contract run by Cash Paymaster Services, set aside, alleging irregularities in the tender process.
The Legal Resources Centre has joined the case as an amicus curiae over concern that the court action may disrupt the disbursement of grants and SASSA's verification process.
Sarah Sephton a lawyer from the Legal Resources Centre says Judge Elias Matojane had assured the court that interim processes would be considered should a ruling be made to halt the tender.
In 2000, Sephton assisted thousands of grant beneficiaries in the Eastern Cape in a class action case against the then Minister of Social Development, Zola Skweyiya, after a botched verification process, intended to consolidate grant beneficiaries from the former homelands of the Transkei and the Ciskei and old Cape Province, resulted in thousands not being able to obtain disability grants.
However SASSA had assured Sephton that there would be no disruption in the disbursement of grants with the current verification process.
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