SASSA’s new contract with Postbank sets back social grant payments.

Postbank fails to pay grants after taking over from SAPO

On 30 September 2022 Black Sash became aware that the South African Social Security Agency (SASSA) partnership with the South African Post Office (SAPO) came to an end in September 2022. This comes after continuous challenges over the 4 year partnership marred by a shrinking SAPO footprint, administrative challenges, technical issues, corruption, shortage of cash, robberies, and closure of SASSA offices.

SASSA and SAPO gave the assurance to civil society that the cession would not have any impact on beneficiaries and would not affect the payment of social grants. However, the reality on the ground painted a very different picture.

Black Sash Director, Rachel Bukasa, expresses concern that SASSA’s solution to respond to the challenges with SAPO was to cede its partnership to Postbank; we see social grant beneficiaries continuing to struggle to get paid their grants. The fact that SASSA had 3 months to plan the migration from SAPO to Postbank and still these challenges persist, is hugely disappointing. The lack of planning to ensure a smooth ceding of the partnership is concerning, with millions of people affected. Given the constitutional importance of social assistance, the cession of such a contract ought to have been done in a transparent and open manner.

In November Black Sash staff and partners conducted Community Based Monitoring (CBM) and drafted a report on our findings. During monitoring Black Sash staff were assured that there would be no substantial changes to the ‘front end’ of grant payments, and that the changes were only at the “back end” of the system. Black Sash was told that this would in no way affect social grant beneficiaries receiving their grants. However, it emerged that the biometric fingerprint system that grant beneficiaries had previously used for authentication and verification would no longer operate, and that beneficiaries would need to use PINs instead. This is due to Postbank using the SASWITCH system to pay grants. The system allows for customers to use any ATM, regardless of which bank they are using. On the day of grant payments, beneficiaries found that the grants were not paid into their account.

Our CBM monitors found that there were several systemic collapses on grant payment days, including loadshedding and the Postbank network going down, several areas. Some beneficiaries were informed that they had to change from biometrics to PINS whilst collecting their social grants; which older beneficiaries especially find difficult to use or understand. Beneficiaries with Postbank cards received their grants, but SASWITCH – and SASSA cards – were seemingly blocked on the system. Lastly, thousands of people were unable to collect the full value of their grants in cash at SAPO branches, ATMs and retailers between 2-4 November 2022.

We believe that SASSA has arranged with banks that beneficiaries won’t be charged when making the first three withdrawals from ATMs. We acknowledge this effort by SASSA but are unable to confirm how consistently it is being applied. It is therefore critical for SASSA to communicate with social grant beneficiaries to keep them informed if and how they will be affected by the cession and be proactive to have contingency plans in place to respond to challenges.

We look forward to SASSA ensuring that it fulfils its mandate to administer the payment of social grants effectively and efficiently where Postbank can be held to account with agreements which clearly sets out its duties and obligations.

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