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Legitimate Social Relief of Distress grant applicants pay the price for fraudsters

Legitimate Social Relief of Distress grant applicants pay the price for fraudsters
Marecia Damons
By Marecia Damons
28 Oct 2024
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Universal Basic Income Coalition says fraudulent applications only represent a “small proportion of applications”.

The Universal Basic Income Coalition is urging the government to take immediate action to protect genuine social grant applicants and address flaws within the Social Relief of Distress (SRD) grant system.

This comes in the wake of two first-year Stellenbosch University computer science  students, Joel Cedras and Veer Gosai, who uncovered vulnerabilities in the South African Social Security Agency’s (Sassa’s) payment system and potential fraud in SRD applications. The pair found that many SRD grant applications had fraudulently been made using the ID numbers of individuals who had recently turned 18.

The pair explained to Parliament last week what they uncovered. During the briefing Minister of Social Development Nokuzola Tolashe said the department’s budget for social grants of R266-billion benefited 28 million people, of whom eight million were SRD beneficiaries. She committed to investigate allegations of fraud and present the findings in 30 days.

Meanwhile, Sassa admitted to being aware of the fraudulent applications and recently disclosed the extent of the problem to the public.

“Whilst the full extent of this fraud issue was previously not known to us, we have been aware for several months of anecdotal reports of 18-year-olds attempting to apply for the grant for the first time, only to find their ID numbers are already active on the system,” the Universal Basic Income Coalition said in a recent statement.

Civil society group #PayTheGrants also raised its concerns with Sassa last year, but did not get “a satisfactory response”.

‘Serious concern’


The coalition said that while fraudulent applications were a serious concern, they only accounted for “a small proportion of applications”. Approximately 16 to 17 million people were eligible for the SRD grant, while about eight million received it monthly, said the group.

“This means that many more people are wrongfully excluded from the grant — and denied their Constitutional right — than are able to access it fraudulently. This probably includes many eligible 18- and 19-year-olds who are experiencing poverty,” the statement said.

The problem, they argue, lies in the automated digital systems that Sassa relies on for application and verification of these grants.

Fraudulent applications squeezing out legitimate ones


When someone submits a fraudulent application using another person’s ID number, it creates a bureaucratic nightmare for the rightful bearer of the ID if they wish to apply for the SRD grant. Until Sassa undoes the fraudulent application, the rightful ID bearer cannot access the grant. As Gosai and Cedras testified in Parliament, it is extremely hard to get Sassa to undo the fraudulent application via their hotline numbers.

In response to the rise in fraud with the SRD grant, Sassa implemented biometric ID verification processes. The Universal Basic Income Coalition critiqued these methods as being “more burdensome digital barriers”. In Parliament, Cedras testified that the hotline number personnel said they could not offer biometric verification to undo the fraudulent application against his name.

The new measures include using personal data from third parties and algorithms to determine which applicants pose a high risk for fraud. The coalition said that this had led to many beneficiaries having their payments suspended while they proved their identities. 

“Many of these applicants were deserving and in need — not fraudsters,” it said, adding that more than a million SRD applicants were on hold in August alone.

Beneficiaries have also complained that the SMS links sent for the verifications often take weeks or even months to arrive, if at all. To verify their identity, applicants must take and submit a high-quality photo of themselves, which requires a smartphone with a good camera. This has raised concerns about the fairness of the process, as not all applicants have access to such technology.

In-person applications


The Universal Basic Income Coalition warns that the new biometric verification systems disproportionately affect the most vulnerable people, those the SRD grant aims to support. The coalition is now advocating for more flexible methods to apply for the grant and to do the verification, including options for in-person applications. They also stressed the need for better transparency and accountability within the SRD system.

However, the coalition said it was opposed to any proposals to “reset” the SRD grant system. It explained that when the grant system was reset in April 2022, requiring all existing applicants to reapply, access to the grant dropped by nearly 50% within a month. It took 18 months for applications to return to previous levels due to systemic barriers in the application process. 

“This practically would mean millions of people who currently rely on the SRD grant facing sudden severe hunger and deprivation,” the coalition said.

Meanwhile, the regulations for the SRD grant will be challenged in the Gauteng Division of the High Court in Pretoria on Tuesday and Wednesday. The Institute for Economic Justice and #PayTheGrants say the regulations exclude many eligible people from getting the grant. DM 

First published by GroundUp.

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