The National Treasury’s imposition of onerous measures on the South African Social Security Agency (Sassa) for the authentication of social grant beneficiaries is “fundamentally flawed” and has resulted in the mass cancellation of grant beneficiaries where no fraud had been committed.
This is the view of Institute for Economic Justice (IEJ) senior researcher and project leader for social protection Kelle Howson, who said in a webinar on Wednesday that fraud cases reported by Sassa to law enforcement agencies in 2014/15 demonstrated that the fraud had been overwhelmingly (75%) perpetrated by government officials rather than grant beneficiaries.
While there were verification measures in place during this period, they were not as stringent as those demanded since 2025 by the Treasury which believes that social grant fraud continues to haunt South Africa.
In May last year Sassa indicated that 210,000 grant beneficiaries had been potentially identified as fraudulent as records indicated that their income was above the allowed threshold.
Finance minister Enoch Godongwana said in his budget vote speech in February that “enhanced targeting of social grants authentication of beneficiaries to reduce fraud in the grant system will yield R3bn in savings.
“The South African Social Security Agency has upgraded its biometric and income verification processes resulting in nearly 35,000 grants being identified as incorrect or fraudulent and therefore terminated.”
The Treasury has allocated R293bn for about 28-million social grant beneficiaries in 2026/27.
But Howson pointed out that Sassa had stated that in the 2025/26 financial year as 70,000 grants had been cancelled, yielding savings of R44m a month or about R500m annually, the R3bn savings target over two years seemed unfeasible.
“The new monitoring and review measures are not uncovering actual beneficiary fraud at the rate implied,” she said.
Howson said the algorithmic fraud detection measures imposed by the Treasury were not justified in terms of the number of fraudulent beneficiaries. These measures include verifications with banks, credit bureaus and the databases of various government departments and entities.
Bank verification ‘flawed’
Howson said the IEJ had found last year that with respect to the Covid-19 social relief of distress grant 54% of the exclusions based on bank verifications of income were erroneous. The databases were often outdated.
When beneficiaries received grants they were not eligible for it was not always the case that they were doing so fraudulently as they may, for example, have one-off receipts of income that pushed them over the income threshold.
Where Sassa picked up anomalies it initiated a review process but Howson noted that there were many practical and logistical reasons — such as the cost of transport and not receiving the notification — for beneficiaries not to appear for a review. The vast majority of cancellations were due to the review process not being completed, she said.
While Sassa was obliged to implement these measures in order to receive its operating budget allocation and was required to allocate resources and capacity to do so, its operating budget over the next three years had been cut by 3.4% in real terms.
Howson referred to other types of fraud perpetrated by predatory third parties — such as money lenders, insurance scams and fake websites — which steal beneficiaries grants and data as well as large scale security breaches and identity theft by syndicates exploiting weaknesses in Sassa systems.
Government insiders had also been found to have appropriated social grant funds, duplicated beneficiary cards, created ghost beneficiaries and changed bank details of beneficiaries.
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