Social grants fraud remains a concern, National Treasury says
· Citizen
National Treasury has flagged social grant fraud as a persistent and costly problem, warning that weaknesses in oversight and verification continue to divert funds away from South Africa’s most vulnerable.
The department’s director-general, Duncan Pieterse, acknowledged that more has to be done to ensure that the correct people receive social grants.
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He was speaking at the Momentum’s post-Budget Speech Breakfast in Cape Town on Friday. Pieterse noted that there needs to be a conversation around what more can be done to ensure that the correct people receive social grants.
Social grants fraud
He said he believes social grants in the country fulfil their purposes; however, fraud remains a concern.
“I think the grants we have at the moment, such as the child support grant, the old age grant, and the disability grant, have shown themselves to be very well targeted and to address the issues that they were intended to address,” said Pieterse.
“Our main concern at this stage is who receives social grants when they should not be.”
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Measures to curb social grants fraud
Pieterse said the department has worked together with the South African Social Security Agency (Sassa) to tighten the social grant system and eliminate fraud.
“We have already identified about R3 billion in savings over the next few years, and we believe there is more if we do proper verification,” he added.
His remarks come days after Finance Minister Enoch Godongwana delivered the budget speech, outlining that R2.67 trillion will be spent in the 2026-27 fiscal year, with R292.8 billion of the total amount going towards social grants.
Godongwana praised Sassa for upgrading its biometric and income verification systems, which led to the termination of nearly 35 000 grants deemed incorrect or fraudulent.
Households spending
Another thing that Pieterse touched on is household finances. He said the budget was set up to give already-burdened taxpayers some relief, because weak household finances pose a threat to long-term fiscal sustainability.
“The idea that both corporates and households are quite overburdened from a tax perspective, and you can see it in our tax-to-GDP ratio, is something that we are very sensitive to and something that we continue to monitor,” said Pieterse.
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Godongwana, in his speech, announced full inflationary relief from bracket creep and an inflationary increase in the medical tax credit and rebates.
Dumo Mbethe, Momentum Corporate CEO, told The Citizen that the budget indeed gave some relief to households, and this is good news, seeing that it has been two years since taxpayers received proper relief.
Increase of the TFSA
Mbethe added that Godongwana also delivered good news in the budget by increasing the Tax-Free Savings Accounts (TFSA) threshold.
The annual TFSA contribution limit increased from R36 000 to R46 000 on 1 March. TFSA is a savings or investment account where the money you earn in interest, dividends or capital growth is not taxed, helping your savings grow faster over time.
Mbethe said this increase will allow people to invest more without paying tax on the returns, helping their savings grow faster and potentially leaving them with more money available for household expenses or to pay off debt.
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