The South African Social Security Agency (Sassa) will for the first time make electronic payments to approximately two million social grant beneficiaries through its new corporate Postbank account on February 1, instead of through Grindrod Bank, GroundUp reports.
Postbank is the banking division of the Post Office, which signed a deal with Sassa last year to pay social grants from April 1, this year. Grindrod is the banking partner of Cash Paymaster Services (CPS), which currently pays social grants.
The Post Office will assist Sassa with the management of social grants, including electronic payments, but not cash payments.
Cash payments — at a CPS cash point or through a retailer — will not be managed by the Post Office at this stage. Sassa has invited bidders for the cash payments. Bidders have until the end of this week to apply.
CPS’s current grant payment contract with Sassa, which began in February 2012, was declared invalid by the Constitutional Court in 2014. The court allowed CPS to continue paying grants until March 2018 so that Sassa could appoint a new service provider. In time, Sassa was expected to take over the payment system itself. Meanwhile, the court ordered Sassa to submit regular reports on progress.
Late last year, the Inter-ministerial Committee announced that an agreement between Sassa and Post Office to take over from CPS. Post Office has since submitted its progress report to the Constitutional Court in taking over the payment of social grants from 1 April.
But it remained silent on contingency measures should it not be able to execute its plan with the Post Office in time.
This despite Sassa’s lawyers writing to the court last month asking for yet another extension of its contract with current service provider CPS.
In its first progress report to the court since announcing its grand plan for the takeover of social grants a month ago, Sassa says it’s initiated a number of processes.
This includes providing the Post Office with information to open bank accounts for beneficiaries.
As from next month, some two million beneficiaries will be paid directly into their private bank accounts.
Treasury, meanwhile, is negotiating with banks for low-cost accounts for beneficiaries.