Broken
Promises
A new Black Sash documentary about a broken social grant system failing the poorest and most vulnerable.
The documentary demonstrates that the social grant payment system is no longer designed around the needs of grant recipients. This failure erodes the dignity of recipients, pushing the most vulnerable in SA into deeper poverty.
Access to social security is one of the socio-economic rights guaranteed in the South African Constitution of 1996. Social grants are allocated to the poorest of the poor, the most vulnerable in our society, with women experiencing the greatest impact as primary caregivers. A meagre social grant means access to basic needs such as food, healthcare, shelter, and education for the most vulnerable in our society, which are severely compromised. The importance of the South African social grant system cannot be understated. It has a direct impact on the lives of millions of people, and any disruption to the receipt of social grants poses a life-or-death threat to beneficiaries.
A collapsing social grant system that is failing millions of vulnerable South Africans
Currently, the social grant system is plagued by a myriad of issues, the consequences of which are borne by grant beneficiaries. In 2019, Black Sash researched the impact of the closure of mobile cash pay points on beneficiaries. Through this research and to bring the plight of grant beneficiaries to the fore, Black Sash commissioned veteran current affairs producer Johann Abrahams to produce the documentary. At the time, the concept for the documentary was to advocate for the re-opening of mobile cash pay points in the most severely affected areas.
The COVID-19 pandemic prevented the documentary’s release in 2020, but the plight of affected beneficiaries is still relevant and has deteriorated further. It was decided to update the documentary to consider the changing context of the social grant system that is under threat.
This includes the impact of COVID-19 and the introduction of the Social Relief of Distress (SRD) grant (popularly known as the R350 grant), the push to digitization and banks by SASSA. In 2022, an additional threat to the changing context is the cession of the contract between SASSA and SAPO to SASSA and Postbank and the ongoing technical glitches that impact the timely payment of social grants.
A further blow to the social grant system was announced by SASSA and Postbank in November 2023 that cash grant payments would be discontinued from all SAPO sites, as well as from community cash pay points across the country, in a staggered approach from January 2024, ending March 2024.
All SASSA grant beneficiaries will have to move to retailers or ATMs to draw their grants going forward. Beneficiaries using the SASSA SDA Card with biometrics are required to do a PIN re-set at the Post Office before drawing their grant monies from either retailers or ATMs.
Black Sash is on the ground monitoring this process and is finding beneficiaries confused, upset and fearful of continuing to receive their grant.
Whilst many have been able to transition easily to the alternate channels, despite the burden of cost, there is a cohort of extremely elderly and vulnerable beneficiaries who are experiencing challenges, either with non-payment or not wanting to move to alternate channels. This is reflected in the findings of our documentary, which shows that beneficiaries prefer payment methods that are within their communities, they feel safer, and it doesn’t place the burden of cost on them when accessing their meagre social grant.
It is not the first time that the social grant system failed beneficiaries
In 2012 when SASSA entered a contract with a company called Cash Paymaster Services (CPS), a subsidiary of Net1 Applied Technology Holdings Ltd, many in the investment community regarded the Net1 business model as the holy grail of banking – it was an opportunity to bank the unbanked.
The reality was starkly different. It quickly became apparent that the new Net1-backed system for distributing social grants was not a passport to life-enhancing financial inclusion. Instead, it was a hook to trap recipients into a spiral of indebtedness and, in a disturbing number of cases, apparently fraudulent deductions for services never purchased.
Black Sash’s Hands Off Our Grants (HOOG) campaign was launched in late 2013 to resolve the escalating phenomenon of unauthorized, fraudulent and allegedly unlawful debit deductions. Although the Constitutional Court in 2013 ruled SASSA’s contract with CPS invalid and ordered SASSA to issue a new tender, it would take seven years to end this contract, ultimately expunging Net1 and subsidiaries from the social grant system. In 2018, the South African Post Office will take over as the new social grant paymaster.
An important victory of the HOOG campaign and to stop predatory behaviour by the financial service sector, the agreement between SASSA and SAPO secured the transition of social grant recipients to a special ring-fenced bank account with no debit, stop order, EFT or USSD platform deductions. This account is known as the SASSA branded, Special Disbursement Account (SDA), gold card. The significance of this cannot be overstated. This was a victory for grant recipients because it protected social grants from unauthorised and alleged unlawful debit orders and USSD deductions.
Added to this, the contract between SASSA and SAPO contains an important provision that stipulates how social grants are accessed; these Norms and Standards specify that:
- Mobile pay-point within 5km radius, and 20km distance to a fixed pay point.
- Adequate equipment to ensure a beneficiary does not spend more than an hour waiting in a queue.
- Local offices and service points must have formal complaints procedures and management implementation.
- Norms and Standards indicate a pay point help desk should be made available at each pay point to ensure that it “effectively and efficiently addresses beneficiaries’ administrative queries at the pay point.”
- Cash pay points must have accessible facilities and equipment.
Black Sash’s hard fought for successes under threat
Although the HOOG campaign ended with the transition to SAPO in 2018, there remained much uncertainty about SAPO’s ability and capacity to pay grants into millions of bank accounts every month. A drawback to this contract would be that most mobile cash pay points in communities close to where people lived would be closed. This would require beneficiaries to have to travel to towns to access national payment infrastructure to draw their grants, and this would be at their cost.
The documentary picks up from this point and gives beneficiaries the opportunity to tell their story and narrate their lived reality.
This reality highlights how South Africa’s social grant system is no longer designed around their needs. The reality is that accessing their grant monies every month is becoming increasingly costly, which is eroding beneficiaries’ right to receive the full value of their grant.
The hard-fought-for successes of Black Sash’s HOOG campaign, particularly the ringfenced bank account, are being abandoned due to uncertainty around Postbank’s technical capabilities and SAPO’s shrinking footprint. There is an aggressive push by the Government to encourage beneficiaries to use commercial bank accounts.
However, this is contributing to a growing digital divide. Those in largely urban areas are more likely to use the Internet, whereas those in rural areas struggle to connect, and the ability to access digital devices is determined by tools and infrastructure. Age is also a factor where those who are older struggle with engaging with digital platforms- digital literacy is a factor. Importantly not all qualifying beneficiaries and recipients own or have access to digital devices.
As infrastructure and systems continue to collapse, beneficiaries face access to their grant monies without dignity, they are faced with snaking queues, sleeping on pavements near pay sites and delays in receiving their grant monies, sometimes returning home and not being able to provide food or buy lifesaving medicines.
The overall findings of the documentary indicate a direct infringement of beneficiaries’ rights and a blatant dismissal of SASSA Norms and Standards. We reiterate that access to Social Security, particularly Social Assistance, is a Constitutional right. The social grant system exists to support and uplift the most vulnerable members of our society. All people residing in South Africa deserve to be treated with respect, dignity, and reliability by the systems and institutions meant to serve them.
Hear our call!
The social grant system must not fail
As Black Sash, we urgently call on the Minister of Social Development, her department, and SASSA to address this specifically. We believe that the government cannot fail SASSA Gold Card account holders. Our call to action is as follows:
Access
South Africa has an uneven National Payment Infrastructure, and we call upon on government to increase their efforts to ensure access to the national payment infrastructure within a 5km radius of all beneficiaries to reduce the impact and cost on beneficiaries.
Closure of cash pay points
Consideration needs to be given to how this will impact on beneficiaries. It needs to be clearly communicated what alternative options are available.
Full Value
Every beneficiary must be able to receive their grant without having to spend monies for transport and/or bank charges to receive their grants.
Transport subsidy to grant beneficiary
Provisions must be made for beneficiaries that incur transport costs because they are not within a 5km radius.
Ringfenced Bank Account
There must be an option to use a ring-fenced bank account (SASSA Gold card account) via the Special Disbursement Account which does not incur bank fees, cannot be used to service loans and other financial products.
Informed Choice of Payment method
Although grant beneficiaries have the right to be able to choose their preferred method of payment, they need to fully understand that choosing a commercial bank account incurs bank fees, and therefore their grant is depleted.
Dignified Services
Every beneficiary deserves access to their grants in a manner that upholds their human dignity.
Guaranteed Timely Payments
All grant beneficiaries must receive their grant monies on the prescribed dates without fail.
Communications
SASSA and Postbank must keep beneficiaries updated on any challenges which impact the timeous payment of social grants.
Resolution
Postbank must undertake to resolve any technical outages within two hours of it occurring so that it does not impact negatively on beneficiaries.
Accountability
In the unfortunate event of any delays or system errors, grant beneficiaries want assurances that they will be reimbursed and/or compensated for any costs incurred arising from the delay.
