The South African Social Security Agency (Sassa) and life assurance company Lion of Africa reached a settlement before an application by the agency was heard by the Constitutional Court on Thursday morning.
The agreement‚ which was made an order of the court‚ allows the agency to stop funeral policy deductions from three types of children’s grants.
The agency‚ which pays out social grants‚ was due to apply for leave to appeal against an interim order made by the high court in Pretoria in December.
The high court order had suspended a moratorium on all funeral policy deductions against children’s grants‚ pending the outcome of review proceedings by Lion of Africa.
The minister of social development had‚ through a regulation published in 2009‚ allowed funeral policy premiums to be deducted from social grants.
However‚ in December last year‚ Sassa informed Lion of Africa‚ a company which had been servicing funeral policies with children’s grant deductions‚ that a moratorium on all funeral policy deductions against children’s grants would take effect from January this year.
Lion of Africa applied and obtained an interim order which suspended the moratorium.
In terms of the agreement reached between the parties‚ Lion of Africa agreed not to enforce the high court order.
The judgment means that there would be no new deductions from the three forms of children’s grants between January and May‚ when new regulations from the minister disallowing deductions from children’s grants take effect.
Deductions that were being made before the moratorium will continue until November‚ when funeral policy holders are required to make new payment arrangements independent of the children’s grants.
The child support grant: This grant of R360 per month is paid to a child’s parent‚ who is in need‚ to look after the child. To qualify‚ a person must be a South African citizen and earn less than R42000 per year if single‚ and the child must be under 18.
Foster care grant: This grant of R890 a month is available to foster parents who have a child placed in their care by an order of the court.
The grant was initially intended as financial support for children removed from their families and placed in foster care for protection in situations of abuse or neglect.
However‚ it is increasingly used to provide financial support to caregivers of children who are orphaned.
Care dependency grant: This R1500 grant is awarded to caregivers or parents of disabled children