The pensions "crisis" in the Eastern Cape Province

Abstract

In January 1998 hundreds of thousands of pensioners in the Eastern Cape Province were left destitute when a cash shortfall prevented the provincial Department of Welfare from paying out old-age pensions. The Eastern Cape has a history of problems which include backlogs in infrastructure, a lack of administrative capacity, and fraud and corruption. Pensioners were short-changed when government began the lengthy process of streamlining the South African pensions system. The communication draws on press reports covering the period 1997 and 1998, to trace the events which led to the pensions crisis and the background to these events. With the benefit of hindsight, the fiasco highlights the significance of pensions in a rural economy and strong popular reactions to the temporary withdrawal of government transfers to the elderly.