Special pension fraud rife - Nene

2011-11-03 21:18
Cape Town - Treasury is still trying to stem abuse of the special pension fund for military veterans, Deputy Finance Minister Nhlanhla Nene said on Thursday.

Nene told Parliament's joint standing committee on defence that the number of people claiming special pensions belied the difficulty the liberation movement had in recruiting fighters for the armed struggle against apartheid.

"Today we have some people benefiting even though they did not participate, because there are people who, now that there are these benefits, want to benefit out of the process," he said.

"If it was that easy at the time to get people to join the armed forces of our organisation I don't think we would have struggled."

Nene said the system needed to be cleaned.

"We know the plight of our people but the saddening part is also the amount of people who want to take advantage of the system and they actually did not participate in the struggle. I'm sure even the members know some of these so-called comrades."

Mismanagement and fraud of the special pension fund was largely the cause for the auditor-general faulting the finance ministry for irregular expenditure in the past financial year.

Treasury director-general Lungisa Fuzile said last month the department incurred some R8m in irregular expenditure as a result of mistakes by the Government Pension Administration Agency in applying the Special Pensions Act.

The finance ministry cannot overturn incorrect decisions of the agency, and would instead have to seek a court order to that effect.

Another R3m was misspent hastily extending a contract in a bid to resolve the problem, while R3.6m was lost due to crime relating to special pensions.

The special investigating unit found that more than 500 beneficiaries of the fund were dead and 285 had criminal convictions, disqualifying them from receiving benefits.

The committee heard from the Government Employees Pension Fund's director for special pensions, Kabelo Jonathan, that the backlog in assessing applications had been slashed by 72% and should be eliminated soon.

This would help administrators to focus on appeals listed by rejected applicants.

Nene said he would like the fund to reconsider nearly 2 000 applications received after the December 2010 deadline.

"The biggest crisis has been the backlog," he said.

"I have requested that as soon as they have processed the backlog they look at those other applications and see whether other than missing the deadline they do meet the other criteria. So that process is going to be unfolding."

Veterans who could not contribute to regular pension funds because of their involvement in the struggle were eligible for special pensions.

Since 1996, 71 272 people had applied and 21 490 had been successful, Jonathan said. At the moment 7 010 were receiving monthly pay-outs.

The legislation governing it has been repeatedly amended, notably to lower the age limit and extend the deadline.

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