Question NW1311 to the Minister of Social Development
19 May 2023 - NW1311
Arries, Ms LH to ask the Minister of Social Development
Considering the fact that the SA Post Office has been placed under provisional liquidation, what measures of intervention have been put in place to ensure that beneficiaries receive their grant payments on time?
Reply:
Due to liquidity concerns, the contract between SAPO and SASSA for the payment of social grants was ceded to the Postbank in October 2022.
This was probably done just in time as SAPO is currently facing liquidation. The ceding of the contract, means that the liquidation – from a contractual perspective – will not impact the service agreement of clients, as a new entity (Postbank), which is solvent has taken responsibility for the contract.
However, Postbank was only given 3 months to prepare themselves for taking over the contract, and remains heavily reliant on SAPO for services – which are failing at present.
This over reliance on SAPO remains a concern for DSD and SASSA and we’ve been in constant engagement with the Postbank around alternatives to mitigate this challenge. These include:
- Postbank developing their own infrastructure, in particular, ATM infrastructure in strategic locations.
- Postbank partnering with other stakeholders to reduce their reliance on SAPO. These include larger merchants (which has been implemented to date) as well as smaller merchants such as SPAZA shops.
- Postbank introducing a cardless solution. This will limit the need for clients to interact at branches. This has already been rolled out successfully with the COVID SRD grant and has alleviated the congestion seen at Post Offices during the COVID period. This should have a similar impact when rolled out to the other grants.
Beneficiaries also have a choice to receive their social grants payment directly into own commercial bank account. More than 50% of SASSA clients utilise this option.
These options cover approximately 98.5% of our clients. The remaining 1.5% who live in far flung areas remains a challenge, and are still reliant on the cash pay point services provided by Postbank. Discussion are being held across government, led by the Presidency on a possible government wide solution to service these communities. In the meantime, the Postbank will continue running the cash paypoints that were previously run by SAPO.