Parliament, Thursday, 7 March 2024 – The Multi-Party Women’s Caucus (MPWC) today received an update on progress made by the Department of Women, Youth and Persons with Disabilities regarding the establishment of a cooperative bank for women, youth and people living with disabilities.
The meeting heard that the proposed name for the bank is SA Innovative Financial Services Cooperative (SAIFSC). Currently, its interim board consists of 13 youth, women and people living with disabilities from a diverse range of backgrounds.
The first phase in establishing the bank, a virtual meeting with Prudential Authority, was held on 4 December 2023 where SAIFSC presented its business case, leading to a successful application package submission on 3 January 2024. The package contained the bank’s application along with supporting documents, such as the bank’s constitution, membership register, bank statements, policies, and its business plan. Cooperative Banks Development Agency’s ongoing support contributed to the successful submission of the application package.
The MPWC further heard that as of 29 February 2024, SAIFSC has 461 members, with a bank balance of R278 698.85 in cash deposits. It has partnerships with four associations and is in the process of finalising agreements with five more, as it continues to actively seek additional membership associations. Each individual member, belonging to an association, has paid the R500 membership fee and a non-refundable R100 administrative fee while each company has paid a R1 000 membership fee and a non-refundable R100 administrative fee.
The bank has also established five subcommittees, namely education, marketing, credit, investment, and compliance and risk. A recently updated membership application form, now compliant with regulatory standards, has been circulated for new members to fill out. Additionally, an addendum (KYC form: Know Your Customer) has been provided for existing members with applications on file to complete. The bank’s target is 10 000 members and R5 million for the next 12 months from the date of approval. Awareness campaigns and further recruitment will take place next month.
The Chairperson of the MPWC, Ms Nkhensani Kate Bilankulu, said this is the follow up that the committee requested. “The initiative is commendable. It is heartening to note this intervention as this group of individuals is vulnerable and overlooked many times. This is a positive step in the right direction,” said Ms Bilankulu. However, other committee members were concerned that individuals are unable to become members of SAIFSC unless they are part of an association in order to qualify. In response, the committee heard that SAIFSC is bound by regulation to operate in such a manner.
In conclusion, Ms Bilankulu said the committee welcomed the initiative. “We will closely monitor it to ensure it always puts the interest of women, youth and people with disabilities first.”
The committee heard that the bank was launched by the Minister in January this year and is expected to be in operation by July 2024. It currently has 439 women members, three members who are people with disabilities and 19 youth members.
The MPWC also received a presentation from National Treasury and the South African Revenue Services (SARS) regarding the taxation of surviving spouses. The committee heard that the 2019 Budget Review contained proposal to alleviate the burden in cases where a surviving spouse receives more than one income. An option considered at the time was that rebates should not be taken into account for withholding of tax by retirement funds, so that big tax bills do not become due at the end of the year. In 2022 these amendments came to effect.
The committee further heard that South Africa’s retirement system is designed in such a way that contributions to retirement funds and returns in the fund are tax free, but benefits are taxed once the recipient receives them in retirement or on withdrawal. The committee heard that if all income is not included, it becomes easier to hide income. Furthermore, widows with survivor benefits are not the only taxpayers who have multiple sources of income, for example people with two jobs, people with more than one pension fund or people who are “semi-retired” (i.e. receive some remuneration and a pension).
The challenge comes in if the pension fund is not aware that this is a second income, then they will likely deduct too little tax for PAYE, so a big amount becomes due at the end. To make sure the correct amount is withheld from the pension payment right from the start, tax law was changed so that SARS can inform the retirement fund of the correct rate.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE MULTI-PARTY WOMEN’S CAUCUS, MS NKHENSANI KATE BILANKULU.
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E-mail: razzakani@parliament.gov.za
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