Beginning October, social grants will be managed and administered by the South African Social Security Agency (SASSA) in partnership with the South African Post Office (SAPO).
This is according to SASSA, which claims it is ready to insource social grant payments as of next month without the assistance of Cash Paymaster Services (CPS).
Paseka Letsatsi, SASSA spokesperson, says in phasing out CPS at the end of the month, SASSA will be in full compliance with directions of the Constitutional Court (ConCourt) and there will be no need to ask for another extension.
"With 18 days to go before the September payment cycle is concluded, SASSA has already paid over R6 billon to 92% of its beneficiaries this month, which is a clear sign that government will manage to insource the service of grant payments from October going forward.
"Transactions have largely taken place at merchants through point-of-sale devices and over the counter at post office outlets. Withdrawals from bank ATMs have reduced significantly during this month as compared to August. At the moment, the bulk of outstanding payments are the ones done in cash at SASSA paypoints, which will be finished in record time," Letsatsi states.
End of the road
With the extended CPS contract coming to a close, SASSA's business ties with the paymaster will cease.
The social security agency has relied on the services of CPS, a Net1 UEPS Technologies subsidiary, to pay 10.8 million beneficiaries through cash payments, direct deposits and electronic payments.
As the distributor of the majority of South African social grants, CPS has during this time faced a slew of allegations that it authorises deductions on beneficiaries' accounts before their social grants are paid out. The payments provider has refuted these claims.
The CPS contract, which was declared invalid, would have come to an end in March 2017. However, after SASSA and the Department of Social Development failed to find a solution to bring payments in-house, the ConCourt suspended the order of invalidity and ordered a year-long extension of the contract until 31 March 2018 to avoid a social grants catastrophe.
The court also ordered former social development minister Bathabile Dlamini and the agency to use the time to find an alternative service provider to distribute social grants.
The post office was then gazetted as the preferred payment channel for all SASSA grants in a government-led initiative.
After a tumultuous negotiation period, which required the intervention of an inter-ministerial committee, SASSA and SAPO reached an agreement regarding the future of social grants payments.
The government entities agreed to implement a hybrid payment model that will increase the role of the banks and merchants, and reduce the role of cash payment for social grants.
New cards
As a result of the SASSA and post office partnership, beneficiaries are required to acquire a new gold social grant payment card, as the old one expires at the end of September.
According to SASSA, the new card is an "improvement of the old card and it does not allow deductions for things such as airtime, loans or prepaid electricity, among others".
"The new card also allows three free cash withdrawals at points of sale, one free withdrawal at the post office per month, free swipes at points of sale, and are accepted by all ATMs displaying the VISA sign."
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