Social grant payment transition will be seamless

By Deputy Minister Thandi Mahambehlala

The countdown to the South African Post Office (SAPO) taking over the payment of social grants has begun. The contract between the South African Social Security Agency (SASSA) and its current service provider, Cash Paymaster Services (CPS), comes to an end of next month.

Last year the Constitutional Court declared the contract between the two parties illegal and instructed SASSA and the Department of Social Development (DSD) to find a new service provider by April this year. The court, however, ordered CPS to continue with its constitutional responsibility to pay social grants to more than 17 million beneficiaries.

The court also instructed the DSD to provide quarterly updates on progress made towards the payment of the April 2018 social grants...since then, the department has been providing regular updates to a panel of experts operating under the supervision of the Constitutional Court.    

Social grant beneficiaries are therefore assured that the transition will be seamless and the payment of social grants will not be disrupted. The government is pleased with the progress made to ensure that it complies with the Constitutional Court order.  

In December last year, SAPO signed an agreement with SASSA, which will see it taking over the payment of social grants for all beneficiaries who currently receive their grants through the National Payment System. This agreement was facilitated by the Inter-Ministerial Committee on Comprehensive Social Protection which was, among others, assigned to guide and direct efficient implementation of the Constitutional Court order.

The agreement between SAPO and SASSA was sealed after considering a number of options for the replacement of the service provider. It is premised on strengthening the capability of the State and also for cost-saving purposes.

The agreement caters for a ‘hybrid’ model, which makes provision for the participation of other partners such as commercial banks and in-house payment. SASSA has already tested its in-house payment system using a sample of 100 beneficiaries who receive their social grants through various commercial banks. It successfully made direct payments into their accounts in January 2018 and the number had increased to two million beneficiaries by the beginning of this month. The direct payments are expected to increase to 5,7 million from the beginning of next month.

Beneficiaries who receive their social grants through cash pay points will be paid by their current service providers until they receive a new SASSA card from Postbank. SAPO is expected to start issuing new SASSA cards from 1 April 2018. The government will embark on a verification process of cash pay points to determine those that can be migrated to SAPO infrastructure without interrupting the payment of social grants.

SASSA has already applied to the Constitutional Court for an extension of the suspension of the invalidity of its contract with CPS to enable the service provider to continue delivering payment services to 2,5 million beneficiaries who receive their grants in cash.

While awaiting the ruling on the matter, this arrangement will be phased in over a number of months, in line with the phasing out of the services by the current service provider.

While the insourcing of payments of social grants is being implemented, the government has embarked on a campaign to assure beneficiaries that they will continue receiving their social grants beyond April 2018. The government is mindful that some citizens depend on social security assistance which has been a pillar of its drive to ensure basic human rights and the restoration of the dignity of the people.

Social security assistance is enshrined in the country’s Constitution and it helps the most vulnerable people in society – an initiative that was close to the heart of former President Nelson Mandela. The government is pleased that his legacy lives on.

As we pay tribute to our great stalwart and statesman Nelson Mandela in the centenary year of his birth the government will continue to provide social grants to improve the lived experience of South Africans and create an enabling environment for the financial security of many families. It is common cause that social grants contribute towards improving people’s standard of living and creating a more equitable society.

The provision of social grants has grown over the years and currently benefits more than 17 million poor South Africans. The Child Support Grant has grown from 70 000 beneficiaries in 1998 to almost 12 million in 2016. Of course this should be lauded but also an indicator of the inequality which has bereft our society. The government also urges beneficiaries to contact the SASSA Call Centre on 0800 60 10 11 for any enquiries relating to grant services.

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