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The Public Servants Association (PSA), the trade union that representing employees in the public sector, said it is disappointed with the way the Government Employees Pension Fund (GEPF) has dealt with tax deductions for pensioners.
The union claimed this resulted in large portions of tax being deducted from pensioners, who are left with very little income to meet basic needs.
This comes after the South African Revenue Service (Sars) provided a revised tax rate to be deducted from monthly pension payments.
“It is important to note that this revised tax rate is only applicable to pensioners who receive more than one source of income in addition to their GEPF pension. The PSA is outraged that despite pensioners opting for the normal PAYE rate of tax, the GEPF unilaterally utilised the revised tax rate provided by Sars,” the PSA said.
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The PSA said it was calling on the CEOs of the GEPF and Sars to rectify the error and refund pensioners that were affected by the deductions.
Meanwhile, the GEPF on Tuesday said that before implementing the revised rate of tax, the Government Pensions Administrative Agency (GPAA) wrote to all affected pensioners informing them of the choices they had.
“Unfortunately, it would appear that some pensioners did not receive the correspondence or did not fully understand the choices/options they had,” the GEPF said in a statement.
It that it is compelled to implement the revised tax rate issued by Sars.
“It is important to note that this only applies to pensioners who receive more than one source of taxable income in addition to their GEPF pension.
“The GEPF reiterates that pensioners have the option to opt out of the revised tax rate provided by Sars and revert to the normal PAYE rate applicable to your pension,” the statement read.
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