New Rules about Selling Funeral Plans to SASSA Card Holders
May 22, 2016
SASSA is the name of South Africa’s social welfare system, which pays out the subsidies. People draw their grants using SASSA cards.
A huge portion of social spending goes towards social subsidies for millions of poor people. And they get this cash monthly.
The money is meant to improve the standards of living for the poor.
SASSA Cards Pay for Funeral Policies
The government tries to assist the poor by way of SASSA cards, but companies like Sanlam and Lion of Africa Assurance Co are two insurers that sell funeral policies to the most indigent.
These are people on welfare, and the money is for their children. However, instead, the money is used for a funeral policy. But now the South African government wants to end this practice.
Of South Africa’s 53 million people, altogether some 16.9 million who live in poverty receive welfare payments.
These amounts range between about R330 to about R1 500. However, people pay money from their grants for funeral plans, not food.
The holders of SASSA cards sign forms, which include a written mandate allowing a deduction from the SASSA card.
SASSA Cards Are In the Hands Of People Who Don’t Understand the Financial Aspects of Insurance
Most of the people who are on welfare do not have an education. And many of them are powerless to object, or they simply don’t understand the financial aspects.
The South African Social Security Agency, known as SASSA, has had a flood of complaints.
At the moment the law only permits deductions from grants for funeral insurance. However, this can’t go beyond 10% of the value of the award. And Social Development Minister, B. Dlamini says that beneficiaries are supposed to receive the full grant.
Recognised Funeral Insurance Companies Do Not Take Advantage
But a spokesperson for Lion of Africa stated that the company asks a mere R30 a month for a policy.
The spokesman said the company didn’t go out of its way to target welfare grant recipients. And whether people received a state grant or not, it was their choice to buy a policy.
And the poor purchased funeral policies legitimately, both from regulated, legitimate companies or from unregulated providers.
Consequently, Sanlam has already stopped selling new funeral policies to welfare grant receivers.
Dlamini said that a host of unscrupulous people tried to profit from individuals who have nothing to their names. And this is why drastic steps must put an end to this practice.
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All info was correct at time of publishing