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Black Sash: President Ramaphosa's Sona encouraging but Sassa concerns remain

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Black Sash: President Ramaphosa's Sona encouraging but Sassa concerns remain

21st February 2018

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The Black Sash is encouraged by President Ramaphosa’s maiden State of the Nation Address (SONA), particularly the acknowledgement that social grants remain a vital lifeline for 17 million South African living in poverty. We note the finalisation of a permanent public sector-lead hybrid model and look forward to more details. 

We also pleased that urgent decisive steps will be taken to comply with all the directions of the Constitutional Court and that action will be taken to ensure that no person in government is undermining implementation deadlines set by the court.

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In March 2017, the Constitutional Court extended the invalid Cash Paymaster Services (CPS) and SASSA contract by one year ending 31 March 2018. This was to provide SASSA with the opportunity to put in place among others a new grant payment system and phase out CPS. On 6 February 2018, SASSA approached the Constitutional Court for a further six months extension of the Cash Paymaster Services (CPS) contract, this time to continue “cash payments”.

SASSA has put out a five year tender for cash payments to grant recipients particularly living in rural areas and those unable to access ATMs or other payment channels. Bidders are expected to submit proposals by 28 February 2018.

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However, it would appear that SASSA’s extension of the CPS contract is not only to phase out the “cash payments” but also to ensure that there is a proper handover of the SASSA Bank Accounts held at Grindrod Bank to South African Post Office (SAPO) affecting 6.8 million beneficiaries.

Our biggest concern is that SASSA will transfer social grants directly into the SASSA bank account held at Grindrod Bank from 1 April 2018, without moving these accounts into the SAPO Special Disbursement Account. According to its submission to the Constitutional Court SAPO is still awaiting sign off of the business rules on these Special Disbursement accounts. The printing of cards has been delayed to 16 March 2018 and distribution of the new SASSA card will commence from 1 April 2018.

SASSA in its presentation to the Portfolio Committee on 13 February 2018 states that beneficiaries, using the SASSA card will be moved to the SASSA/SAPO card if they do not want another bank account. A card swap plan has been developed, but dates and venues have yet to be finalised.

However, SASSA has put out a communication to grant beneficiaries encouraging them to open a commercial or SAPO bank account. The current communication strategy is creating great confusion amongst social grant beneficiaries about their choices. SASSA is currently paying R16.44 per grant beneficiary to CPS/Grindrod bank for the SASSA bank account.

SASSA and National Treasury are still negotiating a low-cost banking product(s) with commercial banks and have not informed beneficiaries about the cost implications they will be liable for. Beneficiaries have also not been told that they can do a card swap to the SASSA/SAPO card to be rolled out from 1 April 2018. SASSA should explain the permanent public sector-led hybrid model in its entirety.

Furthermore, we are deeply concern that unscrupulous money lenders are completing the SASSA ‘Request for methods of payment” forms on behalf of grant beneficiaries in favour of the EPE bank account held collectively by Grindrod Bank and Moneyline. This practice has to stop immediately.

 

Issued by Black Sash

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