Acting CEO of South African Social Services Agency (Sassa) Pearl Bengu assured South Africans that the payment of social grants would happen without disruption on April 1.
The contract between the agency and Cash Payment Services (CPS) comes to an end on March 31. Sassa relied on the services of CPS to pay 10.7 million beneficiaries through cash payments, direct deposits and electronic payments.
“As we approach 31 March, we are here to provide the South Africans with the progress and state of readiness. We are pleased to announce a significant state of readiness for Sapo to commence payments of social grants. We assure South Africans that social grants will be paid on 01 April 2018,” Bengu said.
She said Sassa has reactivated its PMG account with the South African Reserve Bank (Sarb), which is being used to manage the money for direct transfers for social grant beneficiaries.
“This means that the money is not paid over a private contractor in advance but remains within the government environment until deposited into a social grant beneficiary account,” Bengu said.
She said since January this year the agency has successfully implemented a pilot project that pays beneficiaries who receive their grants through banks directly. These direct payments have been made to more than 2.3 million beneficiaries for the month of March and the number will increase in April, Bengu said.
She added a test was run for direct payments for beneficiaries who receive payments through their Sassa payment cards and 100 000 beneficiaries were paid directly into their Sassa cards during the testing period in the month of March.
Bengu said in April a total of 5.7 million beneficiaries transacting through the Sassa card would be paid by the agency without the assistance from CPS, adding that 7.7 million beneficiaries, of the 10.7 million who were serviced by CPS, would be paid directly by Sassa in April.
“Sassa also intends to deposit money into the cards for those beneficiaries who receive their social grants from cash pay points. The only support that will be required is for approximately 2.8 beneficiaries is the distribution of cash at the pay points. All the above transfers will be made directly from Sassa’s PMG account,” Bengu said.
Bengu said because Sassa still needed support with the distribution of cash for 2.8 million (26% of the beneficiaries) beneficiaries who receive their grants at cash pay points, it requested the six-month extension from the Constitutional Court. Should the extension be allowed by the court, Bengu said this would allow for the phasing-out and phasing-in period for the South African Post Office (Sapo) to smoothly be introduced.
She said the agency had taken over from CPS the management of direct funeral policy deductions for 727 000 beneficiaries.
A tender for cash payment has been advertised, and a payment contractor will be appointed soon, Bengu added. Once appointed, the cash payment provider will use new Sassa, Sapo cards at all pay points.
Sassa, National Treasury and the Sarb are in talks with commercial banks for the establishment of low-cost bank accounts for social grant beneficiaries who receive money directly into their personal accounts, she said.
She further said the agency has engaged 27 accredited cooperative financial institutions that may be used in the future to pay social grants.
Sapo CEO, Mark Barnes said the post office was ready to play its role in the payment of grants and would commence with the phasing in on April 1, ensuring there are no disruptions.
From April 3, Sapo will be ready to open accounts for social grant beneficiaries, he added. He said testing for 1 000 accounts was concluded in February.
These accounts have the following features: there will be no deductions, three free cash withdrawals, one free balance inquiry per month, one free mini-statement per month, a free full statement covering up to a maximum of three months on demand and the first free replacement card.
He said an increasing number of beneficiaries had also already opened Postbank accounts between January and February and that some of these beneficiaries had already received their March social grants through the Postbank.
Bengu said all Sassa cards would continue to work until the end of the year and that soon the introduction of the new Sassa card through the Post Office would get under way and beneficiaries would be informed about this process.
“We only need six months for the phase-in and phase out of CPS, that’s why we are confident that the six months requested is enough,” Bengu said.