The Department of Social Development is investigating Cash Paymaster Services’s (CPS) administration of pensions in KwaZulu-Natal.
It is also looking into allegations that CPS’s holding company, Aplitec, ran a loan business for pensioners on the side and charged them excessive interest rates.
The Mail & Guardian reported last week that Aplitec subsidiary Age Secure provided pensioners with small loans of between R250 and R500.
The M&G discovered that pensioners in KwaZulu-Natal had their loan instalments deducted from their pensions at source, which appears to be against a directive from the Department of Social Development.
Vusimuzi Madonsela, Director General in the Department of Social Development, said the M&G report had been referred to the chief director of grants administration for investigation.
He said the department was also studying a comprehensive social security plan for the poor in preparation for the Cabinet lekgotla scheduled to begin on July 23.