Grant payments can go through banks‚ says Concourt-appointed panel

The payment of social grants could be significantly simplified if government were to ditch the existing system and rather opt to pay grants into the existing bank accounts of grant recipients.

This is one of the recommendations contained in the report prepared by the Auditor General and a panel of experts‚ who were mandated by the Constitutional Court to investigate the grants debacle.

The report argued that by switching to direct bank-account payments‚ 80% of the grants could be successfully paid.

The panel recommended that the Constitutional Court instruct the South African Social Security Agency (SASSA) to provide the court with reasons why this alternative payment option for social grants cannot be adopted.

The 88-page report‚ dated November 16‚ was submitted to court on Monday.

The panel was appointed by the Constitutional Court in March‚ to evaluate the steps taken by SASSA to ensure it is able to administer and pay social grants from April 1‚ 2018.

In March‚ the court extended an invalid contract with Cash Paymaster Services to pay social grants until April 1‚ 2018.

The court also ordered SASSA to inform the court how it planned to ensure the payment of social grants after April 1‚ 2018‚ and the steps it had taken.

In its report‚ the panel said the repeated failure by SASSA since March – to execute the required actions to properly and timeously implement the various aspects of the court order – makes a smooth transition by April 1 next year virtually impossible.

It said SASSA’s senior leadership‚ responsible for driving this process‚ does not – with the exception of certain individuals – seem to have the required knowledge‚ experience‚ skills or will to execute its mandate to ensure the efficient payment of social assistance.

“This situation is exacerbated by the apparent exclusion of competent employees from decision-making structures within SASSA.”

The panel said 80% of social-grant recipients could receive their payments through the low-cost bank accounts of their own choice.

“The benefit of such a solution is that it would make use of an existing high-quality‚ properly-regulated national payment system infrastructure with significant cost savings‚ as well as having benefits in respect of financial inclusion of social-grant beneficiaries.”

“This would allow for an open architecture‚ where no single service provider would be able to dominate the payment process.”

The panel said those beneficiaries who lived 5km or more away from any ATM or point-of-sale facility could receive payments at pay points.

The panel recommended that the court issue directions for a short series of meetings to be held urgently under the auspices of the South African Reserve Bank and the National Treasury.

The meetings should consider‚ develop and agree on a social-grant distribution framework that would provide for the payment of approximately 80% of social-grant beneficiaries who currently receive their payments through the national payment service.

For beneficiaries who do not live within 5km of an ATM‚ the panel recommended that SASSA and other relevant role players find and evaluate other solutions that make use of new technologies before April 1‚ 2018.

The panel also recommended that the court instruct National Treasury to investigate the conduct of SASSA employees and officials in the Department of Social Development‚ in relation to actions undertaken since 2016 to issue contracts‚ or to give effect to the Constitutional Court’s order in March this year.

“From the panel’s interaction with various role players… it appears that the majority of beneficiaries can be paid [electronically] directly into their bank accounts within the existing system‚ whether this be [the South African Post Office] or another entity.

“This would require SASSA effectively using the existing financial system‚ including the national payment system‚ Bankserve‚ etcetera.”