Sassa to reveal Post Office role in grants

15 September 2017 - 12:50 By Katharine Child
Minister Bathabile Dlamini.
Minister Bathabile Dlamini.

The SA Social Security Agency (Sassa) will announce next week what role the Post Office will play to help pay grants to 11 million beneficiaries‚ Minister of Social Development Bathabile Dlamini said on Friday.

Dlamini made the announcement at a press conference on the department's progress to find a partner to pay grants without Cash Paymaster Services.

In March‚ the Constitutional Court ruled that the invalid contract with Cash Paymaster Services be extended until March 2018‚ because the department and Sassa had failed to find alternate grant payment partners‚ even though they had been ordered by the court to do so.

Dlamini said her department wants to have all payments done in-house within five years‚ but will work with the Post Office in the interim.

Dlamini said: "Sassa began collaborating with the South African Post Office with the view to work together to ensure the payment of social grants beyond March 2018."

She said the Council for Scientific and Industrial Research had completed due diligence into the Post Office in only two weeks and would hand in its findings on Friday.

The due diligence report will show what the Post Office can do in the process and what services it will require other companies to fulfill.

Sassa is also going to be taking over the process of deducting funeral and other policies from grants. Many of the companies linked to Cash Paymaster's holding company‚ the Net1 Group‚ sold funeral and other insurance plans to grant recipients.

There had been controversy and a court case over how Net 1 companies benefitted from numerous deductions to grants‚ as even children were found to have funeral polices deducted from their child grants.

Sassa CEO Pearl Bengu explained that by taking over the funeral policy deductions‚ Sassa will be able to ensure that no beneficiaries have a policy that is larger than ten percent of their grant‚ which is illegal.

Bengu said: "Sassa can also check that people don’t have three or four funeral policies‚ [instead of one]."

It will also ensure people who want to take funeral cover sign for it and understand what they are buying‚ she explained.

Sassa also said from April 2018‚ it will pay the estimated two million grant recipients who have bank accounts directly.

Currently‚ it pays Cash Paymaster‚ who then transfers the money into the recipients' bank accounts.

Dlamini said: "This will reduce the number of beneficiaries who depend on other payment channels."

Sassa is openings its own bank account with help from Treasury‚ so that grant money can go from Sassa directly to recipients' bank accounts.

Dlamini said: "Under the current contract the total amount for all social assistance transfers are deposited into a CPS bank account. This creates serious challenges as Sassa is unable to have direct oversight in this account."