Status report on payment of social grants: DSD & SASSA briefing

Social Development

15 February 2023
Chairperson: Ms N Mvana (ANC)
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Meeting Summary


In a virtual meeting, the Department of Social Development (DSD), the South African Social Security Agency (SASSA) and Postbank gave a briefing to the Committee on the status of social grant payments.

All three entities discussed the importance of the SASSA R350 grant. The DSD said the grant was vital because it provided millions of people with a basic source of income, but acknowledged that the value of the grant was very little and that the government should contemplate increasing the amount. The Department spoke about its plans to move to a stage where clients could use their SASSA cards to swipe at stores, rather than withdrawing and keeping their funds on hand, which was dangerous.

Members were concerned about the delays of up to two months in grant payments, as well as the lack of communication by the entities and misinformation by their competitors. SASSA conceded that they could have communicated better and more timeously with grant beneficiaries about payment delays. They assured the Committee that moving forward, they were strengthening their systems to prevent delays and would put a strategy in place to ensure that communication improved.

Members were also anxious about the transition from SAPO to the Postbank. They requested that both Postbank and SASSA provide them with some sort of reassurance that Postbank could deliver services efficiently to SASSA beneficiaries.


Meeting report

The Department of Social Development was invited to the Committee meeting to brief the Members about grant payments and the service delivery agreement between the South African Social Security Agency (SASSA) and the South African Post Office (SAPO).

They provided reasons for the various system failures that resulted in some beneficiaries being unable to withdraw their money from their bank accounts and what they had done to resolve this. They spoke about the transition from SAPO to the Postbank, the terms of the service level agreement (SLA) and the communication strategy around this transition, as well as the current status of social grant payments. They spoke about the different payment options available to beneficiaries and the Social Relief of Distress (SRD) grant for both existing and new applicants, including the appeal process.

The presentation covered the three entities which were involved in the grant process. The DSD dealt with the payment of grants to beneficiaries, while SASSA referred to the issues involving service delivery agreements. Postbank covered issues relating to distribution and the Appeals Tribunal -- an independent organisation -- and explained the challenges surrounding appeals and where they currently were with them.

See attached for full presentation


Ms A Abrahams (DA) commented that everybody was entitled to take leave, but considering that this was the first Portfolio Committee meeting of the year which was scheduled well in advance, and with the topic being about SASSA, it seemed as though the entity was having a rocky start to the year, and it would be hard to take it seriously when the chief executive officer (CEO) was absent, and there was an acting CEO in her place.

In her personal experience, they were just too many interim or temporary actors in important positions. This culture of acting executives and management left very little room for accountability. It was one of the serious challenges faced by SASSA. She commented that this challenge may be why everything was sent to national departments instead of provincial and local departments, since there was no accountability at the local level.

She requested a copy of the SLA, because it included everything, and it should be the Committee Members’ prerogative to determine what they felt was important or less important to discuss about the SLA. She wanted to know what the Rand value of the 5% monthly fee and the penalty fee amounted to, and also on the penalties for the various months listed in the presentation, the values of the debt and the values of the fees that SAPO incurred were.

If the alternative power supply was in the form of a generator, why did SAPO not procure or fix all their generators? The one hour waiting period in which sandwiches and fresh water would be provided was very concerning. This arrangement was part of the initial SLA and was one of the reasons under "dignity" that they had been faulted on. She asked that the Department provide more information about whether this would apply to all branches, and whether it was implemented at any branch.

Slide 10 talked about the service fee for the administration of the grant -- would this be a monthly service fee? If so, what was the total monthly service fee, if SASSA was paying for grants? If her calculation was correct, the amount would be R165 million a month. She asked whether her calculation, excluding the SRD grant, was accurate and if not, what the actual figures were monthly. In addition, what were the reasons for the ministerial decision to move from SAPO to Postbank, because this had not been covered in the opening remarks?

Seeing that the contract with SAPO was still valid and applicable until April, was SASSA still obligated to pay SAPO any fees in terms of the contract until April? On slide 15, it stated that ‘the general clauses had been reviewed and the outstanding part of the fee structure and the pricing for the service provision.’ They were two months away from the new contract with Postbank, yet there was still no information on fee structures and pricing. Once the new SLA was signed, the Committee should have access to it; otherwise, it would be in the same situation as today, where it reviewed an agreement from two years ago.

Slide 17 talked about misinformation by competitors resulting in confusion. Who were these competitors? If the competitors were other banks or companies that believed they could render the service better than Postbank, that was information that the Committee should be privy to. Looking at the month of April 2022, there were over 250,000 people who had not been paid between the approved and the paid number of beneficiaries. Were these unpaid beneficiaries part of the group who were still waiting for bank verifications, or had they just not been paid? The country's economic situation was not improving, so SASSA needed to do better in increasing their numbers of paid beneficiaries.

Slide 32 referred to cellphone changes and fraud. How did SASSA differentiate between fraud and an honest person who had simply changed their cellphone number? According to hearsay, the people paid on the Personnel Salary System (PERSAL) for the SRD grant were largely teaching assistants whose contracts had ended. Did these teaching assistants make up everyone on PERSAL accessing the grant, or were there others who also qualified for the R350 grant? Also, what was the 068 error message that people were running into?

When the Committee deliberated about SASSA, talking points that had to be included in the presentation had to include disability grants. Some beneficiaries could not apply for a disability grant renewal until the disability grant expired. Thereafter, it took over a month for beneficiaries to get an appointment and another month or two to get a medical assessment, because there was a shortage of SASSA doctors. Throughout this process, beneficiaries were unable to purchase food, collect their medication and pay their rent. A regulation amendment had to be made that stated that if a beneficiary’s disability grant was expiring, they could apply for it before it expired. This ensured that vulnerable groups were not left without any means to survive because of the systematic backlog of disability grants at SASSA.         

The Committee had repeatedly been calling for improvements, but nothing seemed to be changing. Previously, the Govchat online portal was used to register and process online applications. She had recently been on the Govchat portal, and could not find the link allowing applicants to book appointments online. Was the portal still operational?

The Committee had heard that SAPO was closing branches. For instance, all the branches in Mitchells Plain had been closed. It was important that the Committee got a full list of the SAPO offices closing in the country, and when they were closing. What were the plans in place for those office closures? She commented that many of her constituents had expressed their concerns about how they were unable to afford to get to the SASSA offices considering the rise in fuel prices and taxi fares.

Pre-Covid, SASSA had been able to come out to the community. Post-Covid, it had stopped coming out to the community because it did not have the capacity to do so, as it did not have an adequate number of staff who could go into these communities. When would SASSA return to pre-Covid operations? When would they be able to go into communities to ease the burden of costs on the beneficiaries who could not afford to travel to the SASSA offices? The cost of travelling to the offices could be very expensive. For instance, beneficiaries living in the Northern Cape travelled more than 600 kilometres to get to the nearest SASSA pay point at R400 each time. This was totally unacceptable.

Loadshedding was also severely disrupting operations at SASSA, and as a result, was negatively impacting beneficiaries from receiving grants and staff members from issuing grants in time. If the SASSA   staff could not capture information onto their system due to load-shedding, this created delays that they would constantly have to play catch up to. Did SASSA plan to purchase generators for its offices?                     
Ms L Arries (EFF) commented that it was very disappointing that the Committee was being informed about the Postbank distributing grants during the presentation. Why had the Committee not been informed earlier about the SLA between SASSA and the Postbank? In addition, what current control procedures existed between the DSD, SASSA and the Postbank to guarantee the prompt payment of social grants? How was this decision made? Was it communicated to the beneficiaries? Were beneficiaries aware of this, because since December last year, the Committee had seen many people go without food because there was no money for them? Also, what impact would the closure of SAPO offices have on the payment of social grants? The Committee had heard that there was a problem concerning a shortage of gold cards. If this was true, what measures did SASSA have to ensure that beneficiaries received their grant funds? In addition, what impact would the SAPO retrenchments have on the payment of grants? What was the total amount of money owed to municipalities by SASSA offices, and how many offices were owing?

Regarding corruption within SASSA, the Committee had been made aware of ten SASSA officials who were back in court for fraud and corruption because they had approved able-bodied people for disability grants. What mechanisms did SASSA have in place to curb the likelihood of fraud and corruption within the organisation? Also, were SASSA and the Ministry of Social Development convinced that the post office could fulfil the duties imposed on it in the SLA, given the experience of grant recipients over the last three months, which had been chaotic? In addition, what were the reasons for SASSA’s decision to assume the contract with SAPO, and why was the public not informed about this decision?

Ms J Manganye (ANC) expressed her concern about the agreement between SASSA and SAPO. There were infrastructure challenges that SAPO was facing. Most of their structures were not in good condition. Considering this, would SAPO be able to fulfil this memorandum of understanding (MOU) between them and SASSA or the DSD in terms of providing staff and beneficiaries access to toilets in SAPO offices, since most SAPO offices did not have toilets, particularly in the rural areas.

It was the Committee which had sent out communications to respective constituencies about where to access their grant payments, but it was important that Postbank did its own marketing and messaging in communities. People were anxious to go to the Postbank because of poor communication. She asked the Department whether they were certain that the Postbank would not disappoint South Africans the same way that SAPO had disappointed many by closing its offices without notice. Action needed to be taken if Postbank breached its agreement with the community.

How were they aiding the missing middle who were struggling and could not afford to make ends meet? She also expressed her concern about the R350 grant, which she believed was hardly enough for people to meet their basic needs and take care of their children. The DSD was doing a lot, but many communities were running low on social workers. The Department needed to hire more permanent social workers so that communities were well-equipped.

Ms P Marais (EFF) expressed her concern about whether SAPO had the capacity to deliver services, considering that just last year, it was on the brink of closing, and could potentially devastate communities in rural areas and townships which would struggle to access their grants. Also, since December, beneficiaries have been struggling to get their money. Some beneficiaries had not received any money -- people with gold cards could not access their funds, and all the beneficiaries of the R350 grant had not received their money for the last two months. What would the Department do about those unable to access their grant funds?

On the issue of corruption, SASSA doctors were approving able-bodied people for disability grants. This was a huge concern, because many people deserved to qualify for a disability grant, but they were still waiting to be approved amidst people who could work but were taking away opportunities for those who honestly qualified for the grant. Was it possible for SASSA to give beneficiaries food parcels while waiting for their applications to be approved? Another big concern was about the grant top-up. It appeared there was poor communication among SASSA staff, who send beneficiaries from pillar to post when they try to apply for top-ups. She asked that the Department provide further clarity on the issue of top-ups.

Ms A Hlongo (ANC) expressed her concern about the number of fake SASSA social media pages that claimed to be assisting people. Those pages had more followers than the actual SASSA or SAPO pages. The fake pages respond to people and share information. Was the Department aware of these fake pages? If so, were they looking into the matter, because it created problems for people who sought help from these pages but ended up getting scammed? SASSA should investigate the matter, because the fake pages increased the spread of misinformation, and people ended up following the wrong processes when applying for grants or following up, because they relied on these fake pages. Also, there were currently floods in Nkomazi, Mpumalanga, with no cars getting in or out. Did SASSA have systems in place for beneficiaries to receive grants when their payment date came around?

Mr D Stock (ANC) indicated that in his State of the Nation Address (SONA), the President had highlighted that the provision of support through social welfare remained a priority for his administration and that it was an important part of dealing with the scourge of poverty. The Committee had been presented with a report that requires Members to strengthen their efforts towards undertaking oversight of the functions of the Department and its entities.

The late SASSA grant payments affected the beneficiaries of grants in rural areas in particular, where beneficiaries had to travel kilometres to get to SASSA, just to be turned back because grants could not be paid. How could SASSA improve on this area of responsibility? SASSA also needed to look at improving their communication, because in instances where they foresaw payment delays, they could communicate this to beneficiaries well in advance.

Slide 15 on the Master Services Agreement (MSA) stated that the new MSA was expected to be concluded before 31 March, and take effect from 1 April. What were the updates on the finalisation of this MSA, considering the deadline was approaching? Slide 16 referred to the system failures -- was there any certainty that the improved systems would not impact service delivery in the future? Regarding cash sent to beneficiaries, were there any timeframes for the process of concluding procurement processes to reactivate efficient payment channels, considering they were approaching the end of the financial year?

The Chairperson remarked that the points in the presentation had been unconvincing. The issues that other Members had raised were also issues that she was encountering in her constituency. She admitted that when her constituency discovered that she was unable to answer the questions they had regarding SASSA and the Department, they got frustrated and disappointed, and this was embarrassing for her. She asked for further clarification on the issue of Postbank and the SASSA cards, and why beneficiaries were being sent from pillar to post.


Ms Raphaahle Ramokgopa, Executive Manager: Strategy and Business Development, SASSA, said that the entity's CEO would have loved to have been in attendance, but she had had to attend to an urgent matter.

Referring to the acting positions, she said they had tried to stabilise the organisation in various ways. They had decided to hold off with formal appointments until they had completed the business process reengineering (BPR) process. Once this had been completed, then the organisational structure would be approved, which meant they would be able to appoint people permanently in positions where the budget was available.

Mr Brenton van Vrede, Chief Director: Social Assistance, DSD, explained that as part of the general trend in cuts to budgets affected by the government wage bill, they had had to reduce staffing levels significantly, and had therefore had to look at alternative ways to deliver their services.

He did not foresee sharing a copy of the SLA with Members as being a problem so that they could all be well informed about the service standards that the Department expected to deliver on. As they finalised any new agreement with Postbank, they could also make those agreements public because it was part of their fundamental principles that the public be made aware of what they should expect in terms of service standards.

On the financial agreements in the contract with SAPO, on average, they spent around R1.4 billion a year, which comes out to be around R100 million a month. This fluctuated, depending on how many clients they paid. If more beneficiaries used the payment system, it could be less -- amounting to around R90 million -- but if they went to cash points, it could be a little higher, because cash payments were more expensive. On average, it amounted to R100 million a month, and the 5% penalty fee would be about R5 million.

He said there were some areas where there were generators and other areas where there were no alternative power supplies. Everyone was experiencing challenges with the supply of power at the moment, hence the President’s declaration of a national disaster last week during the SONA. The SAPO, SASSA and Postbank offices were struggling. Alternative sources like generators were always meant to be a short-term solution, so when there was back-to-back load-shedding for long periods, as in the instance of stage six, generators became very problematic and extremely costly.

Loadshedding impacted not only SASSA, SAPO and Postbank, but also their service providers. For instance, some big data companies in the country with which they had service level agreements had contracted to provide them data or internet at the level of 98%. One of their service providers during Stage Six load-shedding had reduced their commitment and supplied them with internet at the level of 85%. So it was not only a matter of keeping the lights on, but also a matter of keeping the connectivity of their systems going, which could be a massive problem as well. This had a spiral effect, whereby if they were down for a couple of hours, they accumulated huge backlogs which were difficult to manage with limited staff. The solution was to come up with alternative sources of energy, but that was not something which was immediately available. In the short term, they used batteries and generators.

Regarding the shift to Postbank, and whether they were still paying SAPO, their last invoice with SAPO was in September, so they were no longer paying SAPO. Postbank had their sub-contract with SAPO, so they would then pay SAPO, but SASSA did not pay SAPO directly any more. One of the reasons they had shifted to Postbank was mainly because they had problems with SAPO in that they had not been able to deliver on their service level agreements almost every month.

On the terms of the fee structure and pricing for the new contract, that could be made available to Members of the Committee once that contract had been concluded. On the contract between SASSA and SAPO which would wrap up on 1 April, most Members had raised their concerns about the looming date. The most important thing to note, to alleviate some of that concern, was that the agreement had been ceded to Postbank and SAPO as is. At the end of the day, the existing MSA remained in place. The date was just an option added to the ceding agreement to keep an opportunity open for renegotiation should there be issues at any point.

Every single bank around the country would be Postbank’s competitor. 46% of beneficiaries banked with Postbank, and 54% were clients at other banks. Over the last couple of years, SAPO has lost a lot of clients to these other banks. They had had a substantially larger number of clients five years ago when SASSA started contracting with them. Many of those clients had moved on to other banks. 98% of SASSA beneficiaries used the national payments system, meaning they could use any bank in the country. They were not necessarily bound to use Postbank. SASSA’s goal was not to be bound by any particular contractor, but rather to diversify the system and ensure that clients had options if there was failure in any part of the system. Therefore, one of the key things they had in the SAPO contract and continued with the Postbank contract, was to ensure that the SASSA card was 100% bank compliant.

Ultimately the way SASSA would want to go in the future, was not to have their clients be dependent on one particular organisation, but that they would have multiple access channels and that all of these channels were interoperable with each other. It did not matter which bank card one had, because one could access one's money securely from any of the payment channels. It was the clients who must be confident that Postbank could meet their needs, and that they had the capability to swipe into any one of the many banking options available in the country. It was up to Postbank to ensure that the bank could keep its client base happy; otherwise, it would lose a substantial amount of business.

How SASSA distinguished between fraudulent and honest people trying to change their cell phone numbers was difficult. What they did was that if one wanted to change one's cell phone number, one would get a one-time pin sent to one's previous number, the assumption being that if the previous cell phone number was one's cell phone number, one should hopefully still have access to it. However, in cases where clients changed their number after losing access to their previous number, they would have to contact a call centre and perform a manual process to try make sure that the cell phone number belonged to the right person. SASSA was now introducing a new electronic ‘know your clients’ system, which biometrically identified the client so that they could do it themselves digitally. The system should be up and running in a month or two. Until then, they had the old system.

No one on PERSAL should qualify for an SRD grant. Some could qualify for child support or old age grants depending on their income. Since the income threshold of the SRD grant was so low, no one on PERSAL would be able to qualify for it.

There were legislative reasons for not being able to apply for disability grants before they expired, which the Department would expand on, but the biggest challenge was that because it was a temporary grant, it would not be possible because it was awarded for a period in cases of temporary disability. This was not necessarily to alleviate poverty, but rather to provide an income for a loss of employment due to a temporary disability. The grant was awarded after an assessment by a doctor, who would likely conclude that a beneficiary would be disabled for a certain number of months. The beneficiary would have to get reassessed at the end of the prescribed period to determine if they were still disabled. In these instances, it was possible for the beneficiary to apply for an SRD grant on a short term basis. The legislation had come up with three months' provision of the SRD when applying for a grant.

The GovChat portal was still up and running. There may be challenges with the web portal, but it was still running on the cell phone app.

They had reactivated community engagements, but not to the same extent as it was running during pre-Covid, keeping in mind that their staff complement had been reduced significantly. Some regions had already begun to implement the community outreach programme. They hoped to have it rolled out in more communities, although not necessarily at the same scale as pre-Covid, because they did not have the same resources as pre-Covid.

On the gold card issue, SASSA transferred the beneficiary’s money into the card so there was money in it. Every beneficiary had been paid over the last couple of months. The money was sitting in their bank account, safe and secure. What often happened was that when the money got deducted from the account, it was reversed, which normally happened in a matter of seconds, but due to some glitches, it took a day or two before the money got reversed. The money was safe in the bank account despite the glitch, and the beneficiary could access the money once the unsuccessful attempt at withdrawal was reversed.

The Department could not provide the Committee with an answer on the money owed to municipalities at that moment, but they could prepare a response to that particular question for another day.

Mr Van Vrede said there was zero tolerance for fraud and corruption. It was unfortunate when employees got involved in these activities. The Department cooperated with all the enforcement agencies to fight against such activities. Unfortunately, some employees often engage in fraud and corruption.

Regarding the missing middle, to some extent, the Covid SRD grant was trying to fill the gap, in that it was a grant provided for those between the ages of 18 and 60, so just after the child support grant ended and before the old age grant kicked in. R350 was certainly not a lot of money, but the Department was bound by the budget constraints and the available funding that had been made available to SASSA to provide the grant. Ideally, the grant should have been increased to over R400 by now, but budgetary constraints were a huge hindrance to such an increase. He asked Members to give him the identity document (ID) numbers of any beneficiary who had not received their money for over two months so that they could assist them.

He confirmed that all the reasons mentioned in the presentation had been why they had not paid some beneficiaries yet. They also could not confirm when 100% of beneficiaries would be paid, because it depended on when beneficiaries corrected their banking details and underwent the identification checks that were necessary if their identity had been compromised and if their cell phone numbers could not be authorised, for them to receive an alternative form of payment. Those beneficiaries needed to do something on their side so that SASSA could make payments. Payment had been made to each one of those beneficiaries whose accounts could be verified.

On the issues of top-ups, he asked that Members specify which local offices had been giving them the runaround, but the Department had made sure that every local office in the country was aware of granting top-ups. All SASSA offices should know about the top-up grant, and they should accept and process applications without giving people hassles. They would deal accordingly with anyone that had not been following protocol appropriately.

The cell phone payment channel procurement issue was being dealt with, and they should have it sorted out in the next month so that it did not compromise the payments within the channel, but it did compromise some of the assessments. So, everyone who had been paid through cell phone payment had already been assessed and approved, and they would continue to get their money paid through that channel. They were also working with some banks willing to work with them to help them with the indication of cell phone numbers. This had already increased the success rate of that channel. This a very new initiative in South Africa, so they were not trying to rush into it. This was why they encouraged clients to use bank accounts at the moment until the cell channel matured into a stable form of payment.

The SRD grant was digitally accessible. Beneficiaries did not necessarily have to go into a SASSA office -- everything could be done within their environment from any device that had access to the internet. If they selected their own bank accounts or any access channel that they had, such as an automatic teller machine (ATM) or merchant close to them, they should be able to access the scope easily without spending much. He noted that the value of the SRD grant was limited, which was something that the government needed to think about. Government’s main concern was how many people were accessing the grant. There was suspicion that the grant could go to up to 16 million people, but it seemed to be stabilising at about eight million people, which was similar to the number of unemployed people in the country, but not the same group of people.

He admitted that communication was an area in which they were not doing particularly well, especially when it concerned communicating to beneficiaries about problems in the payment channels. He said that when there were problems in the payment channels, they could have done a much better job communicating with beneficiaries and stakeholders, as well as Members of Parliament who were in communities to assist in getting messages out.

He said the Postbank card was like any other bank card, and was fully operational within the national payment system so beneficiaries got their grants into their Postbank account. Their hope and vision was to move to a future where beneficiaries did not withdraw their money from their bank accounts, but instead swiped their card and used it for payments, keeping their money in their bank accounts. This was not always feasible, because they still had a lot of transactions that could only be performed with cash. Irrespective of this, beneficiaries could withdraw small amounts of cash, keep the rest of their money in their cards, and then use them to swipe.

Mr Lucas Ndala, Interim CEO, Postbank, responded to misinformation by competitors. What they had seen over the last year, especially in Limpopo, was that bank agents from competitors would tell beneficiaries that their SASSA cards had been discontinued and they needed to move to their banks. Banks on the ground doing this work included Capitec and FNB. He explained that they were in the process of addressing the issue by continuing to drive the message on the ground and pushing their communications team to communicate more aggressively. This misinformation created fear and anxiety among beneficiaries.

On processes to ensure that payments were guaranteed, they had diversified channels. In the December period, when they had challenges with the ATMs, they redirected a lot of beneficiaries to retailers and other alternative channels like client payment profiles (CPPs), as well as the post offices, to ensure that they made more cash available in those alternative channels, like cash points and post offices. They were strengthening all their systems. For instance, they had migrated their grant payment system to a more secure and reliable environment. At the branch level, they established a system where beneficiaries could have direct access without coming through the post office environment. This had been a challenge because of the legacy of the information technology (IT) environment and the lack of investment in the past due to the Postbank's financial challenges.

They were deliberating with their SAPO colleagues on how they could manage the closure of post offices process better, because, in many instances, they were made aware of a closed post office only when it was payment time, or when they were trying to reach out to the post office. They had asked SAPO to provide them with their strategic plan. There were also instances where due to the post office’s financial challenges, they owed money to their building landlords. They ended up losing their post office, and their staff did not have mechanisms to access the office, so they may be locked out for weeks. He said they were currently engaging with SASSA to talk about improving communication and limiting disruptions as much as possible. Where there had been disruptions, they had redirected customers to alternative channels, sometimes even providing transport for customers to alternative channels.

Referring to the reported shortage of gold cards, he assured the Committee that they had gold cards in stock. They were working with their team to ensure that all post offices had enough gold cards in stock and that they could replace any lost or expired cards. As they started evolving in the next cycle of card replacements, they would also be engaging with SASSA, but the process was ongoing. They were working with the branches to ensure that those without stock could be restocked timeously.

Mr Ndala indicated that SAPO retrenchments would be done in a calculated way to limit disruptions, considering the operational requirements on the ground. There were current discussions about Postbank taking over some of SAPO’s branches, which may stabilise some of the changes faced by both entities, especially in some busy branches with more Postbank transactions.

The infrastructure at SAPO was a major concern, triggered by the financial challenges the entity had been going through. Unfortunately for Postbank, they had been sitting in their infrastructure to the extent that they had undergone a ministerial moratorium which had barred them from doing any procurement. The moratorium had been removed late last year, which meant that they could start with IT modernisation. They were finalising their IT modernisation to transition from a support environment into a more independent one. This would allow them to ensure that they had a stable infrastructure and complied with the Reserve Bank's requirements as they started applying for a full banking licence. One of the requirements from the Reserve Bank was that they withdraw their occupation from the post office's IT infrastructure and have their own standalone infrastructure, with the necessary disaster recovery and mitigations, and which did not expose third parties to operational risks. In the next few months, they should be able to migrate fully out of the current SAPO environment.

On the payment challenges, especially where there had been reversal failures, these payment challenges had largely been a consequence of malicious activity that had had a negative impact on some of those reversals. They had been working closely with SASSA colleagues who had been able to alert them to any challenges that they picked up so they could be resolved quickly, to ensure that their customers could access their payments timeously.

As part of the diversification of their payment channels, they were looking at onboarding spaza shops. The process was at an advanced stage. There were two spaza shop groups that they were working with. Some of the requirements they had to clear was to ensure that they had legally registered South Africans that could be part of the spaza shop initiative to avoid any unnecessary risk that would compromise compliance with the requirements of the financial system. The main aim of this partnership was to ensure that beneficiaries could easily access payments at the local level. They tried to encourage beneficiaries to rather use their cards for purchases, because it reduced the cost for both Postbank and SASSA. It also reduced the risk or likelihood of beneficiaries being robbed because they carried around a lot of cash.

Also, in areas without post offices, since they were part of a national payment channel, they could use alternative channels such as retailers and bank ATMs, as well as mobile cash pay points. Customers could therefore access those payment channels where they resided, in areas without post offices. In disaster-stricken areas such as the flooded Nkomazi in Mpumalanga, which Postbank would not be able to access, they worked with SASSA and the community to reschedule the payments until there would be better accessibility.

Regarding system failures, they had onboarded a cyber security team to help them strengthen their IT security environment. They had also moved social grants to better infrastructure, and strengthened security around their access points.

On the capability of the post office, the current post office environment was a challenge, and its financial challenges had been well documented. Postbank continued to monitor, support and engage with their SAPO colleagues. The alternative channels they were using helped ensure that SASSA colleagues could access systems without going through the SAPO channels.

Mr Tsakeriwa Chauke, Chief Financial Officer  (CFO), SASSA, said that when it came to the payment of service providers, the first thing was that they checked every invoice and paid each one within 30 days. At the end of the third quarter, they had paid 1 904 service providers, and all invoices had been paid within 30 days. In the current payment cycle, if a municipality had not been paid, they would either have received the bill or there would have been a dispute, and SASSA would have written back to the municipality to resolve it. If ever there was a dispute, they established an escalation protocol within the regions and tried to resolve the matter without delay. He requested that if any Member knew of a municipality that had not been paid, they could bring forward the names of those municipalities to resolve the outstanding payment. The payment of service providers had been committed as part of the annual performance plan (APP), and they were monitoring it very closely. He confirmed that they were adhering to the 30-day payment for valid invoices. If there were any invalid invoices, they returned them or engaged with the respective service provider just to assist municipalities and all other small and medium enterprises (SMEs) on issues concerning cash flow. They did not delay the payments to service providers.

Mr Paseka Letsatsi, Head of Communications, SASSA, said they were aware that people spread misinformation, especially on social media. Within the communications department, there were social media ambassadors whose aim was to debunk the fake messaging from posts. Two weeks ago, a fake page was requesting people to submit their information because SASSA would be dispersing R700. They had posted a video to counter the claims being made about the R700 grant. They had meetings every Monday to analyse the social media trends that targeted vulnerable citizens with misinformation. They intended compiling a report that tracked how much misinformation had been posted over the year.

Further discussion

Ms Abrahams indicated that after listening to the presentation and the responses to their concerns, she was leaving the Committee feeling a lack of reassurance about whether the move to the Postbank was going to improve the grant payment system, especially considering that the Committee was meeting in the absence of the Minister and the CEO. She requested that the CEO of SASSA and Postbank give the Committee and viewers at home the reassurance needed by confirming that the move to Postbank would actually improve the payment of the grants

The Chairperson clarified that the move to Postbank was not something new that had emerged this year, because it had begun in 2018. She concurred with Ms Abrahams, stressing the importance of the agencies having a dedicated strategy to ensure that up-to-date information reached the public and Members of Parliament at all times so that MPs were able to explain every detail to their constituencies. She added that information was power, so when there was a lack of information or misinformation, it put Members of the Committee in a disadvantageous position because they were unable to serve it productively without correct and timely information.

Closing Remarks

Mr Linton Mchunu, Acting Director-General, DSD, said he had noted the Members' concerns, particularly around the communication challenges, and it was imperative that they improve on their side. They would be developing a strategy that would be shared with Members, detailing how they intended to improve their communication with communities, stakeholders and the Portfolio Committee. They were open to taking written questions and suggestions from Members to ensure that they could provide their constituencies with answers directly from the Department.

They would welcome any opportunity to consider a joint meeting with the Department of Communications Portfolio Committee and SASSA so that they could have a more holistic picture of some of the challenges and strategies to resolve them. He expressed his appreciation to the Committee for the questions they had posed and the matters they had raised. He assured the Members that they took all their concerns seriously, and pledged to come back to share some kind of communication plan that outlined how they would improve communication with the public and stakeholders.

The Chairperson told SASSA not to wait for the Committee to organise a meeting before they communicated. If there was an important message that they would like to announce, they could talk to the Committee secretariat, and she would put it forward as a very urgent announcement. She thanked everyone in attendance for their time and presence. She highlighted that what was very important was that communication needed to be improved upon.

Before the meeting was adjourned, Ms Lindiwe Ntsabo, the Committee Secretary, identified the forthcoming meetings that portfolio Committee Members were going to attend for the month of February through to March.

The meeting was adjourned.


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