SASSA progress report on Constitutional Court order, SASSA strike action

Social Development

07 November 2018
Chairperson: Ms R Capa (ANC)
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Meeting Summary

The South Africa Social Security Agency (SASSA) reported that it has implemented the court order and fulfilled the obligations set by the Constitutional Court. SASSA was tasked to phase out Cash Paymaster Services (CPS) by the end of September 2018 and to decommission the old SASSA cards by December 2018. Further, SASSA had to migrate all social grant beneficiaries to the South African Post Office (SAPO) or transfer social grants into personal bank accounts of beneficiaries who preferred receiving the money in their bank accounts. Additionally, rationalisation of pay points was a priority for SASSA.

SASSA Head of Strategy reported that CPS services ended on 30 September 2018; that the decommissioning of the old SASSA cards will be completed by December 2018; and that the majority of social grant beneficiaries have been successfully migrated to the SAPO or banks of their choice. The remaining 523 420 beneficiaries still using the old SASSA cards will be finally migrated by the end of December 2018. SASSA reported that it was experiencing security challenges with robberies, burglaries and cash-in-transit heists. SASSA has been working with the security agencies to increase visibility at pay points, ATMs and has managed to stop attempted robberies at some retail outlets and ATMs.

Members encouraged SASSA to work closely with the South African Police Service; expressed concern about the unavailability of cash in pay points in rural areas and that most people in rural areas do not have access to retail outlets. They asked about the role of vendors at pay points; about transport in rural areas to pay points; shelter during the rainy season; and the impact of the SASSA strike action in October.

The Chairperson said that the Committee was not supposed to be involved in labour matters and they would not receive an oral briefing on the strike but the Committee could read through the document SASSA provided on the strike action in October against the use of the biometric system and the measures put in place to address this.

SASSA told the Committee that the situation is under control and that trade union representatives have formed part of a task team looking at the system development challenges that were at the centre of the discontent. Once the task team has completed its work, SASSA will continue with the biometric enrolment of beneficiaries. This will ensure that all beneficiaries are registered on the system and fraudulent activities are addressed. SASSA is working with SAPO to ensure that it improves SAPO’s infrastructure, cash projections for SAPO branches so that it does not ran out of cash, and that SAPO has skilled staff members.

The Committee was pleased with the progress made by SASSA in implementing the Constitutional Court order to phase out CPS by the end of September 2018, reducing the number of pay points, and making use of beneficiaries’ personal bank accounts. The Chairperson warned against social grants created a dependency syndrome.

Meeting report

Opening remarks
The Chairperson welcomed the South Africa Social Security Agency (SASSA), Black Sash and members of the public. She expressed her appreciation to SASSA for its continued progress in implementing the Constitutional Court order and ensuring that beneficiaries are paid timeously. She was pleased that SASSA is transforming itself into a progressive institution which respond to the needs of the people of South Africa.

South Africa Social Security Agency (SASSA) progress report
Mr Abraham Mahlangu, Acting CEO of SASSA, said that the SASSA Head of Strategy, Ms Raphaahle Ramokgopa, would present a detailed report to the Committee. He pointed that SASSA had fully complied with the court order and that the agency was making payments of social grants on a valid contract. SASSA had prepared a report on the biometric system which resulted in strike action and that members could go through the report. Members of organised labour are working together with SASSA in a joint task team to investigate all labour concerns about the biometric system. SASSA would continue to use the biometric enrolment when the joint task team has completed its work within the next few months.

Ms Raphaahle Ramokgopa, SASSA Head of Strategy, noted the key priorities for SASSA:

• Phase out Cash Paymaster Services by the end of September 2018
In April 2018, there were 3.1 million beneficiaries who were paid through the CPS system. As of 1 October 2018, no beneficiary was paid through the CPS system, but beneficiaries received their money through their personal bank accounts. SASSA is currently collecting information that may have remained with the CPS. SASSA will appoint independent auditors to audit the financial books of CPS and the balance of money that may be remaining in the old SASSA cards. This information will be presented to the court. All the monies in the old SASSA cards will be transferred back to SASSA and then credited into the beneficiaries’ accounts. 

• Transition from the old SASSA card to the new cards
• Ensure that the majority of social grant beneficiaries have been migrated to the South African Post Office
In April 2018 there was a total of 8.5 million cards in use and 7. 2 million of them were swapped by 5 November 2018 to SAPO and some beneficiaries opted to be paid through their bank accounts. 3. 1 million beneficiaries were migrated from the cash environment and 4.8 million were swapped to the national payment system (NPS). Overall, there are 523 420 beneficiaries that remain to be swapped from the old SASSA card before 31 December 2018 to the new payment system. She confirmed that in December no beneficiary will be using the old SASSA card.

• Decommissioning of the old SASSA cards by December 2018
The process of decommissioning the old SASSA card will be done through the migration of beneficiaries to the new SASSA card or any bank card of their choice. Nonetheless, SASSA is avoiding auto-migrating beneficiaries without having seen them. It is therefore engaging with beneficiaries to present themselves to SASSA so that the beneficiaries submit the required information and understand the new system. In September 2017 there were 1.6 million beneficiaries that were still using the old SASSA card. This number had significantly declined to 523 420 by the end of October 2018.

•  Ensure that beneficiaries who prefer receiving their money in their personal bank accounts are successfully paid through those bank accounts.
The majority of beneficiaries are now receiving their money through bank accounts and the number of such beneficiaries increased. Most beneficiaries received their grants through Capitec, and a few from FNB and Absa Bank. The process of directly into the bank accounts of beneficiaries is being done by SASSA internally. Even money paid through SAPO is transferred directly by SASSA and SAPO only facilitates the access channels for beneficiaries to withdraw. The money is debited into the account of beneficiaries on the last working day of the month.

In October 2019, 10.9 million beneficiaries were paid through different bank payment systems. The majority were paid through SAPO and Post Bank. The total value of social grants paid by SAPO in October is R8.4 million. Grindrod Bank paid 2.1 million beneficiaries and the majority of them are still using the old SASSA card. The remaining payments were by other banks into the beneficiary personal bank accounts.

• Rationalise cash pay points and ensure critical payment components which could be sourced within SASSA were done internally
SASSA had 8 086 pay points in April 2018 and 6 346 across the country were closed. This means that the remaining pay points country wide are 1 740. These pay points will be serviced by SAPO in November and December according to the Master Service Agreement.  The number is subject to review based on beneficiary behaviour. However, in some areas, SASSA has been re-opening ATMs were there were too few pay points for beneficiaries to withdraw their money. Further, to accommodate SAPO human resource constraints, payments at cash pay points started on 8 October 2018 and 1 269 cash pay points were serviced by SAPO in October 2018 that do not have a post office within reach, or any national payment infrastructure points. SASSA observed that the payment cycle was successful and beneficiaries were able to access their grants through a variety of payment channels without major challenges. Most beneficiaries accessed their grants through the National Payment System primarily ATMs and retailer point of sale (POS).

The number of beneficiaries accessing their grants at cash pay points was significantly lower than originally projected. There were long queues and over-crowding specifically in shopping malls, SAPO outlets, ATMs on the first three days of the month. However, SASS continues to face security challenges. For instance, there were burglaries at some Post Offices, cash in transit heists, fraud and attempted robberies in some retail outlets like Pick n Pay, Boxer and Spar. Another emerging challenge involves syndicates using details of beneficiaries to get money. We are now requiring all beneficiaries to submit their IDs. There are situations were a beneficiary is registered in one area, and an unknown person withdraws their money in a different province. SASSA has previously had some of the people arrested who were involved in the syndicate.

SASSA is monitoring and evaluating the many risks to ensure that all beneficiaries receive their money timeously. Some of the risks which SASSA continues to monitor are the inability to deposit enough money at cash pay point sites, cybercrime, dignity issues, safety of beneficiaries, and network connectivity. SASSA is committed to ensure that it monitors all the risks that the agency is facing.

SASSA is working with the South African Police Service (SAPS) to counter security risks. It also resorted to depositing money into SAPO outlets during the night with the assistance of SAPS. SASSA is working with SAPO to ensure that it improves SAPO infrastructure, cash projections for SAPO branches so that it does not ran out of cash and ensuring that SAPO has skilled staff members.

The Chairperson thanked SASSA for the report and expressed her gratitude for the work done by SASSA. She wanted to know about progress with the strike action and how SASSA was addressing the concerns of the workers who were involved with the biometric system. She reminded members that the Committee is not a worker’s union. The Committee’s mandate to ensure effective service delivery and were service delivery is compromised, the Committee should be able to assist.

Ms S Tsoleli (ANC) said for the past two years the Committee was under pressure together with SASSA to ensure that the agency functions well and helps the poor people of South Africa. She expressed her relief that SASSA had made progress and complied with the court order in time. She urged all Committee members to continue assisting SASSA to ensure that all the problems are tackled. She was concerned about rural areas without many cash pay points and was impressed that beneficiaries now have many options to use ranging from their bank, retails outlets and the Post Office. The staggering of payment points is helping because beneficiaries are not at risk and there are no longer many queues. She agreed with the Chairperson that members should not be involved in labour issues because they are public servants. However, the Committee has a duty to ensure that the poor people are served and since strikes hamper service delivery, the information provided by SASSA was appreciated. On security, the Committee should be briefed on the relationship between SASSA and SAPS to see how they are working together to counter security risks. She was impressed that the cash pay points had been reduced to 76. She urged members to visit the cash pay points sites in their constituencies to see how the SASSA's progress is impacting on people

Ms B Masango (DA) was also relieved to see the progress made by SASSA. However, she needed clarity on the unavailability of money in SAPO outlets or retail shops in some rural areas like Eastern Cape in Jamestown. Beneficiaries in those areas face difficulties even though the money is not a lot. How is SASSA addressing such challenges? She asked for how long the contract between SASSA and SAPO is valid. On the strike action, she said that members should be involved when grant beneficiaries are affected because the Committee plays an oversight role over SASSA's work. She asked if there was going to be a presentation on the labour matter

The Chairperson stated that SASSA would not present a report on the labour issue, but members were free to go through the report and ask questions arising from the report. She reiterated that members can ask questions and SASSA representatives would respond accordingly.

Ms T Khanyile (DA) appreciated the progress and applauded SASSA for moving most of the beneficiaries to the SAPO system. She asked if there are any plans to help beneficiaries who are vendors and operating close to the cash pay points. She asked if there were schedules for pick up points and timeframes for beneficiaries living in rural areas to be transported to get money. She was concerned about the long queues that beneficiaries have to stand in before receiving their money. There should be temporary arrangements for shelter especially in the rainy season for beneficiaries when they go to withdraw their monies.

The Chairperson stated that shelter would be dealt with when SASSA knows if the migration of beneficiaries is permanent. She reminded members that the reduction of cash pay points and transferring money into beneficiary bank account is the best way to deal with security challenges, because beneficiaries can withdraw their money anytime. She urged members to speak to the beneficiaries in their constituencies and encourage them to be independent and not allow anyone to withdraw money on their behalf. Beneficiaries should not tell other people when they receive the grant to avoid being robbed.

Ms B Abrahams (ANC) also applauded SASSA for the progress it made in achieving the migration of beneficiaries to the new SAPO system. She was happy that the number of pay points have been reduced and said that beneficiaries should be acquainted with the new system. She asked if the remaining 523 420 beneficiaries were linked to the Grindrod card system or if it is because beneficiaries are not willing to change to the new system. On security, she asked if SASSA could ensure that no one knows when they deposit the money to avoid robberies.

Ms P Sonti (EFF) expressed happiness at the progress made by SASSA in introducing the new system. It is important for SASSA to work with SAPS to deal with the challenge of burglaries and robbery. She was happy that beneficiaries now have the choice of receiving their money through their bank accounts.

The Chairperson asked if efforts are being made by SASSA to collaborate with SAPS. Is SASSA in the process of partnering with SAPS? Robbers know when beneficiaries receive money so it is important to ensure that beneficiaries are encouraged to withdraw smaller amounts to avoid losing everything when they are robbed.

Ms Masango asked what is being done about the beneficiaries who did not get onto the system as their applications could not be processed due to the strike. She also asked what happened to the disability grant beneficiaries whose applications expired due to the strike and could not receive their grants.

The Chairperson asked about the impact of the strike on the new system being implemented by SASSA.

Mr Abraham Mahlangu, Acting CEO: SASSA, thanked members for the comments and questions. In response to the questions on the strike action, the labour issues had been resolved and there is harmony between SASSA and all unions representing SASSA employees. A joint task team between SASSA and all unions is working on all the labour-related issues and implementation of the recommendations.

Mr Mahlangu replied that SASSA is collaborating with SAPS and recently attended a meeting held by SAPS and chaired by the Minister of Police. SASSA security employees work with SAPS to combat many security challenges. SASSA has a war room at Head Office where any person can report all issues relating to robbers and the information will be conveyed to the police immediately. Several attempted robberies were stopped because of SASSA’s collaboration with the police at both national and provincial level. There are attempted burglaries at some Post Offices that were prevented because of the partnership between SASSA and the police. Some police are also visible around pay points to ensure that beneficiaries are not robbed when they go to withdraw their money.

On the unavailability of cash and pay points in some rural areas, Mr Mahlangu replied that sometimes there might be delays in delivering cash or an under projection of cash in some areas. SASSA is working with Post Offices to deal with this challenge. SASSA has completed working to ensure that there is an effective delivery value chain and that beneficiaries receive their money on time.

Mr Mahlangu indicated that beneficiary behaviour is a major challenge for SASSA. In some instances, many people may go to withdraw their money at the same time and at the same pay point. In other instances, people may not withdraw their money when SASSA had delivered the money to the pay points. SASSA is now studying beneficiary behaviour so that it can predict trends and be able to respond accordingly. The study will also be important as SASSA will be able to provide adequate shelter or chairs and tents for beneficiaries in instances where there are long queues or in the rainy season.

Mr Mahlangu replied that the contract between SASSA and SAPO was initially proposed for five years. However, this period was reviewed considering that it would not be ideal to enter into a contract with another service provider which will require money and infrastructure. Therefore, the contract is permanent with SAPO. It is not a short period based on a government to government partnership. Therefore SASSA is committed to build infrastructure for SAPO to ensure that beneficiaries receive their money. Investing in SAPO will also improve the provision of dignity services. He confirmed that SASSA regional offices now have a mandate to provide tents and chairs to beneficiaries when it is raining. SASSA is committed to dignity services and continues to monitor beneficiary behaviour.

Mr Mahlangu replied that SASSA is in the process of giving transport to beneficiaries in rural areas or in areas where there is no infrastructure for the national payment system (NPS). SASSA is also monitoring areas that could be affected due to ATMs being blown up or stolen to ensure that all beneficiaries have access to pay point or the NPS.  

Mr Mahlangu replied that SASSA has been engaging with vendors and hawkers in areas where there are formal structures. Some of the hawkers have indicated to SASSA that they prefer working for longer hours in a consolidated venue rather than working only during the grant payment schedules. SASSA has also linked hawkers with the Post Office to ensure that they can easily access money while they also carry on their business.

Overnight cash delivery is a risk for SASSA and the concept of transporting money at night is temporary. He acknowledged that SASSA did not have an immediate answer to the security challenge. However, SASSA is ensuring that beneficiaries do not sleep at pay points waiting for the money because they will be susceptible to crime. SASSA engaged with SAPO not to allow people to sleep at post offices across the country.

SASSA is updating the Constitutional Court on the implementation of the court order regularly. The court is pleased with the progress that SASSA is making to comply with the court order.

Ms Raphaahle Ramokgopa, Head of Strategy, stated that SASSA is engaging with beneficiaries who are still using the old SASSA to ensure that they migrate to the new system. She assured members that by January 2019, the remaining 523 420 beneficiaries should have been migrated and using the new SASSA card. She reiterated that the number of beneficiaries using the old SASSA card is decreasing.

The Chairperson thanked SASSA representatives for clarifying the concerns raised by members. She stated that SASSA’s mandate should be not be to feed people only but to take them out of poverty. The social grant system should be evaluated for people who may have become economically stable and do not qualify for a social grant. Social grants should not be permanent where a beneficiary has found employment and their child has reached majority age and the family is self-sufficient. Beneficiaries should not rely on government to support all their children. There should be efforts to empower beneficiaries so that they do not remain poor and dependent on grants. There is a negative perspective to social grants and young mothers should be empowered so they can support their own children. The support should be complementary to serve beneficiaries and their families. SASSA must develop a policy on business partnership to empower people so that the number of beneficiaries can be reduced. Social grants should not create a dependence syndrome in beneficiaries. The Chairperson expressed her concern about parents who expect their children to be pregnant so that they can receive the child support grant.

The Chairperson said that there should be stricter conditions for vendors who are making enough money from selling. Vendors should plough back into their own communities and beneficiaries may also be suppliers of certain items. There should be a formal policy to regulate how emerging farmers can also access the formal supply chains. There is food insecurity in certain areas and SASSA should work to establish nutritional centres. She urged members to continually engage with their community members about security so that they stay vigilant whenever they go to withdraw their money.

Ms Tsoleli asked what SASSA is doing about the disability grant. There are people who had applied for the renewal of a disability grant but they have now been removed and they are not happy. Some of the people can work but some cannot. There should be a way of dealing with beneficiaries who have been removed from the grant system and are unable to get jobs due to a disability. She asked Ms Masango to clarify her question about the unavailability of ATMs or pay points in rural areas like Jamestown. There are ATMs as one drives into Jamestown; however there are no big retail shops. She needed clarity whether beneficiaries in Jamestown are not receiving their grants. SASSA should inform the Committee how it deals with areas without retail outlets.

Ms Masango explained that she asked how SASSA ensures that all small pay points in small towns have money and that beneficiaries have access to pay points. Small towns like Lady Grey and Jamestown did not have money for the past month. There are rural areas that may have ATMs without money and the beneficiaries in those areas do not have access to retail outlets as there are only small tuck shops operating in the rural areas.

Ms Sonti expressed her concern about young pregnant girls not being allowed to go to school after falling pregnant. This problem and must be addressed with immediate effect.

The Chairperson replied that the matter should be taken to the population policy development directorate in the Department. Some families are taking care of the children of young girls. There are many children being born every year to teenage girls. She was concerned that some young girls who go taverns when they are pregnant. Some of the girls are then raped when they go taverns, which also complicates the health of the unborn child. She was however hopeful that the work being done by SASSA would alleviate the challenges being faced by old people taking care of children when their young mothers are at school. She indicated that people in the rural areas have always had ties with the Post Office. Due to technology, people no longer utilise the post office for sending letters or parcels. The Post Office infrastructure should be utilised and people should be encouraged to send their small parcels. There should be some collaboration with the Telecommunication and Postal Services Portfolio Committee to ensure that post offices are utilised since government has invested in its infrastructure. There is also a need to make the post office the state bank.

Mr Mahlangu promised to look at the backlog of applications by beneficiaries who applied during the period when SASSA employees embarked on strike action. SASSA would reconsider applications for disability grants and communicate with the regional offices to ensure that outstanding applications are reviewed.

The Chairperson stressed that SASSA should consider only applications and backdating payments for people who applied before the strike. She cautioned SASSA from taking new applications and backdating payments for people who were not affected by the strike.

Mr Mahlangu said that beneficiaries do not want to be taken away from the social grant system even when they reach 18 years or when they become self-sufficient. There are people that still want to be beneficiaries when the fathers of their children are paying maintenance. As such SASSA is making efforts to ensure that beneficiaries submit the correct information to avoid giving money to people who do not qualify. The termination of a disability grant is another challenge SASSA has been dealing with because some beneficiaries do not want to be excluded. He expressed his gratitude to the Chairperson and Committee for their advocacy in bringing the information from communities and helping SASSA though its difficult times.

The Chairperson appreciated the progress made by SASSA and thanked representatives from both SASSA and Black Sash. The working relationship of the Committee and SASSA has been cordial. She appreciated the responses given by SASSA and reminded the Committee and SASSA that people should be taken out of poverty so that they become self-sufficient.

Committee Report on Department of Social Development Quarter 1 Performance for 2018/2019
The Committee went through the draft report and made comments:

Ms Masango asked members to consider amending the Committee’s observation on why DSD delayed in finalising the White Paper on Social Welfare. She suggested the observation made by the Committee should be specific and read that the White Paper could not be finalised because the new Minister of Social Development had to familiarise herself with the paper.

The Chairperson agreed with Ms Masango and added that the new Minister had not taken office when the White Paper on Social Welfare was formulated, and therefore it was important for the new Minister to understand the whole process before finalisation of the paper. The Chairperson asked members if they agree to amend the observation. All members agreed and the amendment was adopted.

Ms Tsoleli suggested they consider amending the observation on spending of money on HIV and Aids, Youth and Social Work programmes so that it is more specific.

The Committee agreed.

The Chairperson proposed that the recommendation made by the Committee on the need to build a cost saving business plan for DSD should be amended. She suggested the recommendation should be specific so that DSD knows exactly what the Committee wants. Therefore, members agreed to delete the word ‘may’ and insert ‘must’. The Chairperson recommended DSD must use social workers in certain programmes to reduce accommodation and S&T costs for officials.

Ms Masango suggested that making use of social work should be a standalone recommendation to emphasise the importance of cutting costs while making use of social workers in areas where programmes are implemented.

The Chairperson noted that when campaigns were discussed in the previous meetings, it was agreed that local people such as social workers should be able to assist DSD and avoid spending money on DSD officials. The Committee is giving an instruction to DSD to emphasise that there should be a mechanism to cut costs. This is because the Committee noted that DSD was using a lot of money to engage senior government officials to run campaigns. The Committee agreed that DSD should make use of local people to cut accommodation, transport costs and S&T.

The Committee agreed to amend the recommendation and adopted the Committee Report.

The Committee adopted the minutes of its 5 September 2018 and 29 August 2018 meetings.

The Chairperson reminded members that they should study the report on food insecurity and poor agriculture performance in South Africa. She expressed her concern about starvation in some rural provinces and stressed that the Committee should work closely with DSD and the Department of Agriculture to address food insecurity.

The meeting was adjourned.

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