SASSA’s Report On How Social Grants Will Be Paid, Creates More Confusion Than Clarity

Monday 29 January 2018

The Constitutional Court direction of 07 November 2017 ordered SASSA to report on how payment of social grants will be made to grant beneficiaries when Cash Payment Services (CPS) will no longer be responsible for the national payment of social grants from 01 April 2018.

In December 2017, the IMC announced that SASSA had reached an agreement with the South African Post Office (SAPO) to pay social grants to a category of grant beneficiaries.  We remain concerned by the lack of clarity around the proposed ‘Hybrid’ payment model, in particular how cash payments will be made, as well as the transfer of beneficiaries to commercial bank accounts.  Both these options present an opportunity for CPS and Net1 to continue the payment of social grants beyond 31 March 2018.

There are an estimated 17 million social grant beneficiaries serviced currently by approximately R10.5 bank accounts. SASSA has identified approximate 2 million beneficiaries that have their social grant paid into a private bank account. Grant beneficiaries will not receive their social grant in full and be saddled with the banking fees that they can barely afford and unauthorised, illegal and unlawful deductions and debit orders.

We would like to draw attention to some aspects of SASSA’s 4th Report released on 8 January:

Special Disbursement Account and Beneficiary Bank Accounts

The SASSA SAPO Agreement provides for the creation of a special disbursement account into which social grants will be paid. It is crucial that the SAPO Agreement contains the Terms and Conditions of this account, including the functionalities and the recourse mechanism. Grant beneficiaries must receive upfront a copy of these Terms and Conditions, and SAPO and SASSA must roll out an educational process.

While the Banking Association of South Africa (BASA) indicated a willingness to offer a low-cost banking account with a “suite of services” the Terms and Conditions, including the functionalities, cost and the recourse mechanism, must be agreed to upfront.  SARB should also play an oversight role and deal decisively with any unethical conduct. Social grants are meagre, and beneficiary bank accounts must be protected from unauthorised, fraudulent and unlawful deductions and debit orders. Child support grants (currently R380 per child per month) and temporary grants need special protection.

The government must cover the banking costs so that beneficiaries can receive the full cash value of the grant. The bank account(s) should include some free services such as no cost for cash withdrawals from ATMs and at least one free bank statement a month. Grant beneficiaries must be able to navigate the recourse system independently, at no cost and refunds, which is currently almost impossible.

Included in the grants paid from the special disbursements account, are the beneficiaries using EasyPay Everywhere (EPE), better known as the green card.  This is a bank account operated by Grindrod Bank and the Net 1 subsidiary, Moneyline.  Grant beneficiaries say they switched to the EPE bank account as agents told them that it is a SASSA replacement card. In our ongoing community monitoring work, we have discovered that grant beneficiaries with EPE accounts experience many suspicious deductions.  We have observed that is almost impossible for beneficiaries to close their EPE accounts and revert to the ‘SASSA branded’ bank account.

The Black Sash wishes to caution against the unilateral transfer of beneficiaries' accounts to EPE.  Thus, it is crucial that SASSA address this issue and provide clarity on how these beneficiaries will be assisted and the transfer of beneficiaries' accounts to EPE ceases immediately.

The Protection of Personal and Confidential information

In regards to Biometric Authentication and Card Body Production, the Black Sash is particularly concerned about the protection of personal and confidential information.

While we note that biometric data of existing beneficiaries has been extracted and is ready for transfer to SAPO, there is no agreement yet in place of how the private and confidential data of beneficiaries will be protected to avoid a repeat of the CPS/Net1 fiasco. When will this agreement be developed and how will it be enforced?

What plans does SASSA have in place to ensure that the personal and confidential data in possession of CPS, Net1 and Grindrod Bank (encrypted onto the bank card) is returned to SASSA and will not be used in the future by Net1 subsidiaries when the CPS contract ends on 31 March 2018.

The Communication and Marketing Plan

SASSA, in its 4th Report to the Constitutional Court, reports on its communications and marketing plan titled “SASSA Care Drive” working jointly with Government Communication and Information System (GCIS).  The Plan appears confusing and does not specifically outline the social grant payment options or the transition process step-by-step for grant beneficiaries to understand how they will be affected.

Grant beneficiaries have expressed concern about having to pay bank banking fees particularly exorbitant cash withdrawal fees.  We urge SASSA and GCIS to modify the Communication and Marketing Plan to help beneficiaries better understand the implications of the payment options and transition processes.


For media queries and interview requests, please contact:

  • Angie Richardson
    083 397 2512
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