Weaknesses in the social security system have resulted in many children continuing to live in dire poverty, Social Development Minister Edna Molewa said on Thursday.

Releasing a review of orphans' benefits in Pretoria, Molewa said the problem had become even more serious because of the recession.

"The report has found that many children and families struggle to access pension funds to which they are legally entitled to, resulting in many continuing to live in poverty."

The study highlighted that communication between funds and beneficiaries had been poor, resulting in claimants failing to access their funds after the death of parents. Some claimants or their new caregivers were often not even aware that a parent had funds available for them.

Failure to investigate claims also caused frustration and lack of understanding. Hidden costs, inappropriate management, payments to foreign workers and payments to minors were also major obstacles.

"It is a national disgrace that today there are hundreds of millions of rands still lying unclaimed in funds while intended beneficiaries live in dire poverty," said Molewa.

She said the experience had shown that the current system was unsustainable and should not be allowed to continue.

The study showed where particular emphasis needed to be placed and where certain laws were left wanting.

"We can be able to look at the laws and go to Parliament if need be."

For the purpose of the study three statutory social insurance schemes and eight major pension funds were selected. This was augmented by individual case studies of claimants.