The South African Social Security Agency (Sassa) on Friday said that it did not provide proof of payment to beneficiaries to apply for loans with the loan sharks.
“The Agency is issuing out this warning after numerous calls were received by the customer care unit, where beneficiaries are requesting proof of payment to apply for loans,” Sassa spokesperson Senzeni Ngubeni said.
“All social grants beneficiaries must be aware that they are not allowed to take loans and make payment with the social grant money. The social grant is not for luxury life, but targeted very poor households to alleviate poverty. It enables beneficiaries to purchase basic needs.”
Sassa said it was not a profit-making financial institution, but it was created by government with a sole mandate to administer the provision of social grants payment services.
“Sassa was created as a tool to fight against poverty and malnutrition to the vulnerable groups in society. Sassa constitutional and legislative framework is derived from the Social Assistant Act. Beneficiaries are advised not to take identity documents and Sassa cards as guarantee assurance to the loan shark,” said Ngubeni.
Ngubeni said that loan sharks abused and accessed social grants before the beneficiary withdraws it. Then beneficiaries run into Sassa on self-inflicted or unnecessary problems.
“The beneficiaries are only allowed to have only one deduction of a funeral policy.”
Regulation 26A of the Social Assistance Act, 2004 allows for deductions for funeral insurance or scheme to be made directly from a social grant where the beneficiary of the social grant requests such deduction in writing from the Sassa. Such deduction will not exceed 10 percent amount of the total grant.
No deduction of loans, electricity and airtime are allowed on social grants payment are permitted.