Presentation to the Portfolio Committee

1. Department of Social Development Presentation to the Portfolio Committee Establishment of an Agency for Social Security 26 February 2003

2. Purpose of the presentation To provide the Portfolio Committee with: • A briefing on the National Social Security Agency; and • Reflect on the need for a new Social Assistance Act and an Agency Act

3. Presentation outline • Background • Business case, decision, and outcomes • Social Assistance Act and an Agency Act • Proposals on the Agency form & structure • Implications • the way forward • Conclusion

4. Background • Investigations into a national social security system has been ongoing • new concept or model emerged in 2000 • Progress towards a final decision was delayed, to be informed by the work of the Committee of Inquiry • Department submitted a business case for an alternative service delivery model to Treasury and DPSA in January 2002

5. Business Case • Outline benefits and implications • Committee of Inquiry also proposed a national social security system with an agency to address social security service delivery challenges, • In the long term – more feasible to have an integrated and comprehensive system to provide social security benefits

6. Benefits • Alignment of budget and policymaking; • Improve focus and resources by provinces to social welfare services, HIV/AIDS intervention and poverty relief initiatives, • Clearer accountability framework; • Integration of social security service delivery • The benefits of economies of scale, IT and physical infrastructure could deliver other transfers, benefits or public goods, e.g. Centrelink • An Agency could focus better on driving down fraud and more efficient disbursement of funds • Standardisation and uniform business processes reduce costs of service delivery;

7. Decision and outcomes • Department , DPSA & Treasury recommended the option of an agency • The proposition is that a specialist, and focused institution be established to manage and administer social grants • The Agency would be a public entity in terms of Schedule 3A of the Public Finance Management Act • Proposed that a Transitional Committee (TC) from the 3 departments be established - take work forward • In October 2002, Cabinet gave in principle approval • Cabinet also indicated that the implications be investigated

8. Transitional Committee Brief • A team established from representatives of DoSD, DPSA and Treasury • Terms of reference of team is to dedicate resources to begin the detailed work of ensuring consultation takes place, fully investigate implications, costing, audits, advise on transition approaches, etc. • Emerging implications • Constitutional and legal • Organisational and personnel • Fiscal and financial • Communications

9. Constitutional, legal Mashavha case, There may opposition to this shift in function Constitutional challenge other legal challenges, contractors service providers, etc. Constitutional and legal

10. Form & structure of Agency

11. Organisational and Personnel National Department Capacity to Manage over R35 billion Restructure: Capacity to monitor service delivery by the agency Policy Unit, Appeals function, Improvement, contract management Provincial Departments Forfeit administration of grants Transfer: staff, assets, contracts, etc. Restructure, smaller social development depts. No crowding out of welfare services Agency New specialist, focused institution Management Board & CEO Absorb 2 700 social security staff, add Long term – all social security benefit transfers, also contributory U.I.F

12. Fiscal, financial & Funding

13. S Stakeholders: P Provinces, Policymakers, Legislatures (NA and NCOP) B Beneficiaries, S Staff and organised labour, S Service providers, etc. Medium: C Consultations, Negotiations, media campaigns, etc to address information gap, fears and uncertainty, etc. Communication

14. Legislation is required to provide for change inassistance service delivery, dealing with policy-making, service delivery, monitoring and enforcement in a co-ordinated way. Legislation also required to provide for the powers and functions of, and relations between, amongst others, the Minister of Social Development, the AAgency Board, executive of the CEO of the Agency, the internal review and appeal institution (tribunal), the external adjudication body (the court), the Agency as an institution and the Agency members of staff (e.g. appointment of personnel, transfer of existing personnel, employment conditions and collective bargaining arrangements).

15. Draft Social Assistance Act • Administration of Social Assistance Act assigned to provinces by Proclamation • Being challenged in Court • New Act is needed, not amendment • No major policy shift • Make sure it is in line with Constitution • Minister will be fully accountable for social assistance policies and services delivery

16. Draft Agency Bill • Enabling legislation • Establishes the Agency • Governance Board • CEO and Staff • Powers and Functions of the Board & CEO • Functions of the Agency • Transfer of functions, staff, assets, obligations

17. The process forward Submission to Ministers and HSD 6 & 7th Feb Cabinet Submission 21st Feb dedicated resources 30th Feb Publish Bills for consultation & comments 1st March Mashavha case will provide impetus 4th Feb Legislative process to NA and NCOP Detailed report to Cabinet Jun/July Appoint Board & Executive Dec 03 to April 04 Transfer of function, staff, assets as from June 04 to 06

18. Conclusion • An alternative and appropriate institution is required to manage & administer social assistance grants • Progress is being made in establishing an agency • The Bills to give effect to these initiatives, wide ranging public consultation is being planned for the next be published weeks and months to draw on opinions and perspectives to involve various structures and interest holders • Detailed implications of organisational and human resources, fiscal, costing and legislative issues will be fully unpacked and communicated before implementation is started.