Post office to pay social grants from April

Pearl Bengu, the chief executive officer of the South African Social Security Agency and Mark Barnes, the chief executive officer of the South African Post Office.

As the March 31 deadline approaches, which will give effect to the service agreement between the South African Social Security Agency (SASSA) and the South African Post Office to pay social grants as from April 1, both bodies have assured beneficiaries they are ready for the roll-out.

Government provides social assistance to over 17 million poor South Africans through social grants, with the majority being children and the main source of income for many South Africans. The child support grant represents two-thirds of the total number of grants administered by Sassa – growing from 70 000 social grants in 1998 to almost 12 million in 2018.

A year ago, the Constitutional Court deliberated on a contract Sassa had with CPS that was deemed invalid and ruled to suspend the invalidity by 12 months ending March 31 this year. This was to enable Sassa time to put in place a valid contract, which will among others include the South African Post Office.

In the past, Sassa relied on the services of CPS to pay
10.7 million beneficiaries through cash payments, direct deposits and electronic payments.

Sassa has successfully implemented pilot projects since January this year by directly paying beneficiaries who receive grants via commercial banks, including the SA Post Office’s Postbank.

Sassa has made direct payment to more than 2.3 million beneficiaries this month and this number will be increased further next month. The testing for direct payment for beneficiaries receiving payment through the Sassa payment card was done for 100 000 beneficiaries for the March 2018 payment period.

In April, a total of 5.7 million beneficiaries transacting through the Sassa payment card will be paid directly by Sassa without the assistance of CPS. In essence, by April 1, Sassa would have paid approximately 7.7 million of the 10.7 million beneficiaries directly.

Sassa also intends depositing money into the cards for those beneficiaries who receive their social grants in cash from pay points. Sassa said the only support that will be required for these approximately 2.8 million beneficiaries is the distribution of cash at the pay points.

It is for this reason that Sassa brought a limited application to the Constitutional Court with the intention of asking the court to suspend the invalidity declaration of its contract with CPS for six months. It said this would enable cash payments to be made through the CPS infrastructure until September this year for approximately 26% of beneficiaries. A tender for a payment contractor for cash payments has been advertised.

This matter is currently before the ConCourt and a ruling is pending.

Sassa has also already taken over from CPS the management of the direct funeral policy deductions for in excess of 727 000 beneficiaries. These are deductions made in terms of the Social Assistance Act, and are the only legally allowable deductions made before the social grant is paid into the account of the beneficiary.

Sassa said it is also in the process of appointing a service provider who will distribute social grants using the new Sassa-SA Post Office card at all pay points across the country.

Sassa, through National Treasury and the South African Reserve Bank, is also in talks with commercial banks for the establishment of a low-cost account for social grants beneficiaries who receive their money directly into their personal bank accounts.

Sassa grants beneficiaries will be able to open accounts with the SA Post Office from Tuesday April 3. The special disbursement account has the following features: no deductions; 3 free cash withdrawals; 1 free balance enquiry per month; 1 free mini-statement per month; free full statement covering up to a maximum of 3 months on demand and a free first replacement card.

Sassa and the post office are starting to phase in a process where, if a current Sassa pay-point is within 5km of a post office branch and the post office branch meets the minimum norms and standards, then the post office will take over the cash payments of that pay point.

Beneficiaries using the old Sassa card may continue to do so until September 30 this year. A new Sassa card will be introduced via the post office and beneficiaries will be informed about the process to be followed.

In the meantime, beneficiaries should ignore anyone offering them any alternative card to the current Sassa. For details, call Sassa on 0800 60 10 11 or visit the nearest Sassa office.

Sassa beneficiaries have three options of receiving their social grants namely, cash payments at pay points, through merchants/supermarkets, and via personal bank accounts. Beneficiaries should choose a payment option that is convenient to them. Those beneficiaries who already receive social grants through the banks are not required to open new accounts.

Beneficiaries who prefer their grants paid directly into their bank accounts should complete a Request for Bank Payment form available, any SAPO outlet or Sassa office. The completed form should be handed to the nearest Sassa office.