The End of Funeral Plan Sales to South Africa’s Poor

Funeral plan sales to the poor are coming to an end.

Parents and guardians have not been able to use their child support grants the way they should be.

They’re battling to provide the children in their care with food. Because of unauthorised funeral cover deductions made without them even being aware of it.

The companies doing this are Sanlam, the biggest South African insurer and Lion of Africa Assurance. They both sell funeral cover and deduct money from grants intended for needy children.

Funeral Plan Sales to the Poor Are Being Blocked

Funeral plan sales to the poorThese people are uneducated and gullible. They don’t understand how insurance works and how a small sum deducted from their grant each month can impact their provision for the children in their care.

In fact, human rights organisation, the Black Sash says that many beneficiaries did not know that they had authorised any deductions.

We want Food on the Table, not Funeral Cover

The Constitutional Court has had to step in. In November 2015, SASSA introduced a policy blocking the debit order deductions. The deductions have meant SASSA receiving a deluge of complaints, and in 2015 some 13 000 disputes were recorded.

In February this year SASSA received more than 46000 queries about these deductions. Sanlam and Lion of Africa took offence to this as they each receive significant payments from the millions of child support grants paid out each month.

Funeral plan Sales to the poor – Lion of Africa Not Ready to take No for an Answer

SASSA has decided to implement the policy. But insurance company Lion of Africa wasn’t having any of that. They applied to the North Gauteng High Court to halt implementation.

They claimed to have grounds for doing this. Lion of Africa based their argument on Regulation 26A of the Social Assistance Act. Indeed, the Act says that the agency can allow deductions for funeral cover directly from a social grant. The Regulation doesn’t end there, though.

Only where the beneficiary of the social grant actually requests such a deduction in writing from the agency is this permissible.

SASSA knows that Regulation 26A allows for deductions. But they don’t allow grant abuse. They have the power to suspend a child support, or foster care grant if it finds that the person receiving the grant isn’t using it properly. Then they’ll also take action if the person receiving the grant neglects the child, failing to use the funds for the wellbeing of the child.

Funeral plan Sales to the poor – No Funeral Plans equals More Food

SASSA believes that children’s grants are solely for the basic needs of children. Following this, social Development Minister has issued new regulations to stop illegal deductions from the accounts.

To use the little bit of funds for funeral cover instead of towards the child is to deprive the child of its constitutional right of access to social security.

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All info was correct at time of publishing