Government Employees Pension Fund and Child Pension

WHO IS GEPF?

The Government Employees Pension Fund (GEPF) is Africa’s largest pension fund with more than 1.2 million active members, in excess of 450 000 pensioners and beneficiaries, and assets worth more than R1.8 trillion.

GEPF is a defined benefit pension fund that was established in May 1996 when various public sector funds were consolidated.

In terms of the legislative change to the GEP Law, the Orphans Pension has been replaced with a Child Pension as of 1 June 2018. To qualify for the Child pension, only the member or pensioner needs to be deceased. This means that the surviving spouse and children can receive pensions at the same time.

In order to be considered for the benefit, the child must be a biological or adopted child of the deceased member or pensioner. Step children, or a child who was in the care of the member or pensioner, do not qualify for the benefit unless a child must be proven to be legally adopted or a biological child or the deceased member or pensioner.

An eligible child qualifies for child pension up to the age of 22, regardless whether or not the child is a student. If a child is disabled and fully dependant on the deceased member or pensioner, the child will qualify for the benefit until he or she passes away.

Child pensions are paid to the guardian until the age of 18, at which time the benefit must be paid to the major child pensioner directly. Once the child reaches the age of 18, the child must submit banking details in his or her own name as GEPF is not allowed to pay benefits due to a major child, into the account of another person. If GEPF is not furnished with the banking particulars of the major child, the benefit will be suspended until the banking details are submitted.

Child pensions are subject to tax, but most child pensioners will not be subject to the actual deduction of tax, as they earn less than the minimum tax threshold. The child pensioners are also subject to Auto Life Verification on a yearly basis, or will receive a Life Certificate if they do not pass the ALV verification. This is done to ensure that the child is still alive and entitled to the benefit.

In order for a child pensioner to qualify for a funeral benefit if he or she passes away, a child pensioner must still satisfy the existing funeral benefit requirements that is if a child passes away and he or she is between the ages of 18 and 22, the child must have been a fulltime student.

The benefit only applies if the member or pensioner is deceased on or after 1 June 2018.

The following procedure applies when a claim is to be raised:

DOCUMENTS REQUIRED

1. Duly completed Child Pension Application Form (CHP1). A separate application form and attachments is needed for each child.
2. A certified copy of the Death Certificate of the member or pensioner (Issued by the Department of Home Affairs, except for persons living overseas)
3. Certified copies of the applicant’s and the deceased member’s ID or Passport. (For minor children, birth certificates may also be used)
4. A certified copy of the ID or Passport of the guardian, if the child is under the age of 18.
5. If the member or pensioner passed away prior to 1 June 2018, a certified copy of the Death Certificate of the other parent (Issued by the Department of Home Affairs – except for persons
6. living overseas) of the applicant child.
7. Proof of the relationship between the deceased member or pensioner and the applicant (child) including but not limited to: Unabridged birth certificate, abridged birth certificate supported
8. by proof of relationship i.e. dependent on medical aid, official letter from school confirming relationship or similar.
9. Duly completed Bank Particulars Form (Z894) for each applicant. Children 18-22 must have an account in own name. For minor children, the account must be in the name of the guardian. Disabled children will be subject to ability to administer own affairs and age.
10. Conditional: For Disabled children, proof of medical disability and financial dependency. If the child is a minor, guardians details and bank account details; if major and incapable of administering own affairs, appointment of curator bonis and bank.
11. If the member or pensioner passed away prior to 1 June 2018, and the applicant was aged between 18 and 22 prior to 1 June 2018, he or she must provide proof of full-time studentship to qualify for benefits as a major.
12. Proof of the relationship between guardian/care giver and applicant (child), including but not limited to: biological parent (birth certificate), proof of guardian (guardianship order), proof of foster parent (foster care order), proof of adoptive parent (adoption order) or proof of care giver relationship.

A few frequently asked questions are given below.

How is the benefit going to be calculated?

Child pension is calculated as a percentage of the pension the member would have been entitled to on the date of death, or the standard pension the pensioner would have been entitled to on the date of death.

This means that the percentage that is awarded to each child will depend on whether or not there is a surviving spouse and how many children there are.

What happens with disabled children?

Disabled children receive child pensions regardless of their age. The child must prove that he or she is physically or mentally disabled and not capable of providing for him or herself financially. Once the pension has been awarded, it remains payable until the child pensioner passes away.

GEPF will perform auto life verification (ALV) once a year. If the ALV fails, a life certificate will be sent to the child. If the life certificate is not returned, the benefit will be suspended.

How are payments made?

Payment to minors will be made to the bank account of the guardian of the child. Children between the ages of 18-22, must be paid to their own bank account.

The GEPF will notify the guardian and child to change banking details 3 months prior to the 18th birthday of the child. If the banking details are not changed, payment will be suspended. Section 21 of the GEPF Law prohibits paying benefits to a third party.

If a child is a major and cannot administer his or her own affairs, a curator should be appointed by the High Court and the Master of the High Court should issue an appointment certificate.

What happens if both the parents of a child passes on and both were members of the GEPF?

If both the parents of a child pensioner pass on and both were members or pensioners of the Fund, the child will qualify for a child pension from both parents, as long as all the qualifying criteria are met.

Is tax payable on the Child Pension?

Yes – the benefit is subject to tax. But if the child receives a benefit less than the tax threshold, there will be no tax deducted. If the child does not have a tax number, the GEPF will register the child as a tax payer with SARS and inform the child and guardian of the tax number.

Tax certificates will be issued yearly.

Further information and claim documents to download may be obtained on https://www.gepf.co.za/

Author Craig Tonkin