Grant beneficiaries confused by funeral policy deductions

Rezara Makhalimela is confused by the fact that R190 is deducted every month from his SASSA old age grant for a funeral policy. Photo: Thembi Siaga

• Old-age grant beneficiaries say amounts of between R100 and R280 are being deducted from their social grants every month.
• SASSA says these deductions are for funeral policies provided by 1Life and Emerald Life.
• The beneficiaries we spoke to were perplexed by what they had signed up for. After GroundUp made enquiries, some of them have been refunded.

Hundreds of pensioners across the country are finding that money is being deducted from their old-age grants for which they claim they have not given permission.

These deductions, of between R100 and R280 a month, are usually for funeral policies.

GroundUp spoke to several grant beneficiaries in Louis Trichardt, Limpopo, who were perplexed by the deductions from their grants. SASSA staff at the local offices were of little help.

We sent the ID numbers of six pensioners to SASSA and asked why deductions are being made from their grants. SASSA confirmed that they all had funeral policies through either 1Life or Emerald Life and that the policy payments are deducted from their grant amounts.

The people we spoke to either did not recall or had poor recollections of their interactions with the companies when they signed up for their policies. They claimed not to have copies of the written contracts or records of the policy numbers with 1Life or Emerald Life.

But both insurance companies have told GroundUp and Limpopo Mirror that all the people we contacted consented to the policies and that there is no evidence that the pensioners were misled.

Emerald Wealth used to sell policies underwritten by 1Life. It currently provides administrative services to 1Life.

1Life is currently owned by Clientele Limited. Clientele is also in the process of acquiring Emerald Life.

The week after GroundUp sent questions to the companies, a representative from Emerald Life visited the grant beneficiaries and cancelled their policies, promising to refund them. Those with 1Life policies were also contacted and told their policies will be cancelled.

SASSA spokesperson Andile Tshona told GroundUp that the beneficiaries whose deductions we enquired about “will be escalated for cancellation of these policies”.

Pensioners confused

Most of the pensioners we spoke to cannot read or write. Their monthly social grant is the only income they have.

Some of them withdraw their grants at ATMs, requiring assistance from bank staff. Others withdraw at retailers or ask their children or grandchildren to withdraw the money on their behalf. Travelling to a SASSA branch to question or report the deductions is a strain on their limited resources.

78-year-old John Mathipa from Elim has had deductions on his grant since 2023. The deductions mean he is unable to make ends meet. He often has to borrow R400 from loan sharks, paying R40 interest for every R100.

SASSA confirmed that his deductions were for a policy with Emerald Life. Mathipa claims to have no recollection of signing up for the policy, though Emerald Life does say they have proof that he did. The company said that they have a photograph of Mathipa with his Emerald Life policy and ID document.

At least three other people we spoke to have had deductions from their grants, but said they do not remember having contact with the insurance companies.

Several people from Mpheni Village report having been visited by 1Life agents in May and June. Although they did give copies of their IDs to the agents, and some had their photos taken, they claim they did not think that meant they were signing up for policies.

Those who visited SASSA’s offices said they were unable to get the help they needed.

Almost all the pensioners we spoke to said they already had existing policies with local companies, which they pay in cash every month, so there would be no reason for them to sign up for a new one.

Why does this happen?

SASSA spokesperson Andile Tshona says deductions for insurance policies are allowed by the Social Security Act, as long as they do not exceed 10% of the grant value and that no more than one policy is attached to a grant.

SASSA uses a system provided by Qlink to manage the deductions. Signed contracts are supposed to be verified by the insurance companies, Qlink and SASSA before deductions are made, said Tshona.

Tshona said beneficiaries who notice shortfalls in their grants need to contact SASSA or visit their offices. SASSA will review the signed contracts, and Qlink will verify them with the insurer. Beneficiaries will be fully refunded if it is found that the contracts are not authentic.

Emerald Life’s complaints manager, Jill Abrahams, said none of the people we enquired about had “at any stage, contacted Emerald Life directly to raise a complaint relating to their insurance contracts with Emerald Life”.

“We can confirm that contact has already been made with some of the policyholders, with varying outcomes from those engagements. For example, indicating that the individual is aware of the insurance contract and wants to continue with the cover,” said Abrahams.

Abrahams also said that a senior manager would visit the community. GroundUp confirmed with some of the pensioners that they have indeed been contacted and have been promised refunds for the deductions.

“At Emerald Life, the fair treatment of customers remains central to our
values. We are fully committed to Treating Customers Fairly (TCF) principles and to
ensuring that all clients are treated with respect, dignity, and transparency,” said Abrahams.

Emerald Life told GroundUp that the refunds were a “goodwill payment” after it had conducted an investigation. The company contacted all four of the people we asked about. One said they were aware of the policy and wanted to continue. The company had records that Mathipa (mentioned above) had signed up for a policy, but cancelled the policy on his request.

The remaining two people were visited by a representative, and their policies were cancelled on request. At least one of them had been validated biometrically. Biometric validation means that a photo is taken of the policyholder holding their policy documentation and their ID document.

1Life Insurance said they are “deeply concerned by the claims raised”. They said their investigation into the pensioners’ claims “has not revealed any evidence of mis-selling”, but they will assist clients wanting to cancel their policies.

“We encourage affected individuals to contact us directly so that we can resolve their concerns swiftly.”

In a further response, 1Life said: “The clients you notified us of were verified and took up cover. 1Life has full proof of contact with the clients mentioned in your article, including signed application forms, verified ID documents, verified cell phone numbers, verified use of one-time PINS to activate cover sent to their cell phone numbers, as well as call recordings on both clients with the brokers to confirm their agreement and understanding of the products.”

Oliver Meth, communications manager at Black Sash, called on SASSA to take stronger action.

Meth said the onus should not be on pensioners: “The system itself needs stronger protections. Grants must reach beneficiaries in full, without being chipped away by … companies. These are not small amounts; they are life-and-death amounts.”

Co-published with Limpopo Mirror

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