Ministers must address systemic flaws and not dismiss current grant payment crisis as a ‘technical glitch’.

  • The Ministers must launch an independent investigation into the systemic flaws of Postbanks’ payment system.
  • DSD Minister must commit to reimbursing beneficiaries hit with multiple transaction failed fees.
  • DSD must finalise and sign the Master Level Agreement (MLA) between SASSA and Postbank.

Cape Town, Wednesday 13 September 2023: Tomorrow, the Ministers of Social Development, Ms. Lindiwe Zulu and Communications and Digital Technologies, Mr. Mondli Gungubele, will hold a briefing to provide an overview of the causes of the system outage and outline measures by both SASSA and Postbank to prevent similar events from recurring in the future.

Black Sash would like to emphasise that social grants are a fundamental lifeline for millions of beneficiaries. It provides for their basic needs, including food, healthcare, shelter and education. Any disruption to receiving their social grants poses the very real threat of life or death.

Currently, Black Sash is still receiving requests for assistance from beneficiaries who are unable to withdraw their grant monies. Some have received a portion of their grants, and some have not received any money at all. Many beneficiaries have been sleeping outside grant sites, unable to pay the taxi fare home. Some pensioners are still walking to and from ATMs, retailers, SASSA offices and Post Office branches daily.

“The problem appears to have affected mostly pensioners, although the Black Sash has received reports that recipients of child grants and disability grants are struggling to withdraw money. The issue is widespread, and we have been inundated with calls nationwide,” says Rachel Bukasa, Black Sash director.

Black Sash reminds the Minister and her department of its Constitutional obligation to protect and fulfil the right to social assistance. The South African Social Security Agency (SASSA), which functions under her department, is responsible for administering social grants. We draw the Ministers’ attention to the SASSA Act, the legal framework that governs this function:

  • Under the act, SASSA’s mandate is to administer information necessary to pay social security,
  • to manage the transfer of funds in a national database of all beneficiaries of social assistance,
  • to establish a compliance and fraud mechanism to ensure that the integrity of the social security system is maintained,
  • to promote and protect the human dignity of applicants for and beneficiaries of social security; and to protect confidential information held by the Agency.

“The last week has demonstrated that the Minister, her department, and SASSA have failed dismally in fulfilling its Constitutional obligations,” says Bukasa.

Bukasa highlights that; “It is dismissive of the Minister, her department and SASSA to refer to what has happened over the last week as a ‘technical glitch’. What we have witnessed is not new, it is systemic and ongoing since November 2022 when Postbank took over the payment of grants from the South African Post Office (SAPO).”

Black Sash, over the last year, has repeatedly warned that Postbank’s system was not designed to adequately administer the payment of social grants. Prior to partnering with Postbank, DSD and SASSA did not do proper due diligence to determine whether Postbank had the capacity, expertise and infrastructure to administer the payment of social grants.

Added to this, Postbank’s technical issues have a devastating financial impact on beneficiaries who incur significant costs. These include travel costs and banking fees. Specifically, over the last week, each time a beneficiary attempts to withdraw their grant monies and the transaction fails, they are charged a banking fee. Many have attempted to do this multiple times, desperately trying to withdraw their grant.

“Over the last decade, Black Sash fought tirelessly to protect beneficiaries’ Constitutional right to receive the full cash value of their grants with dignity. What we have witnessed over the last week is a breach of this right. It is simply unacceptable that beneficiaries carry the financial burden of government failure,” says Bukasa.

Black Sash calls on the Minister to urgently address the following at tomorrow’s media briefing:

  • The Ministers must launch an independent investigation into Postbank’s payment system so that we can understand exactly what the technical issues are, how best to resolve these issues and the timeframes needed. These findings must be made public.
  • The DSD Minister needs to address how beneficiaries will be reimbursed for the transaction failed fees incurred over the last week. In addition, she needs to address the broader issue of banking fees incurred by beneficiaries who hold commercial bank accounts.
  • To date, the MLA between SASSA and Postbank has not been finalised or signed. This needs to be addressed so that both entities can be held accountable.