Agreement on new ‘hybrid’ grants payment system
THE SA Post Office (Sapo) and the SA Social Security Agency (Sassa) have reached agreement on a new grants payment system, Minister in the Presidency responsible for Planning, Monitoring, and Evaluation Jeff Radebe announced.
The new “hybrid” system would also allow for participation by other partners – such as enterprises and commercial banks – in paying social grants to beneficiaries, he said during a briefing yesterday on progress made by the inter-ministerial committee on social security on implementing the Constitutional Court’s order on grants.
The agreement – signed between Sapo and Sassa on December 7 – gave effect to phasing in Sapo and the Postbank as a service provider, and also as one of the key channels through which grants would be paid, he said.
Objectives of the new system included flexibility for beneficiaries to access their payments; consistency in beneficiary experience irrespective of grant delivery channel, provision of a payment service within Sassa’s regulatory environment, access to funds in the most remote parts of the country, reliability of payment service, and safeguarding and protecting the dignity of all beneficiaries.
Fraud, corruption, and leakage would be reduced by providing consistent payments of the right grant to the right person at the right time – ensuring proof of life of beneficiaries as an integral part of the payment process, and ensuring that beneficiaries were not registered more than once.
The new system would also reduce the cost to both Sassa and beneficiaries, which also saved the fiscus significant amounts, Radebe said.
The implementation plan provided for four key channels through which beneficiaries across the country would receive their grants – payments through bank accounts of the beneficiaries’ choice with commercial banks, through merchants in large retail shops, through the Post Bank of Sapo at its outlets countrywide, and through a second tier of merchants
which included village banks, general dealers, small retail outlets, spaza shops, and co-operatives legally registered and South African-owned and operated.
“This will be done essentially through the insourcing of grants payments in a phased way.
“One of the primary objectives of this phasing is to fundamentally reduce cash payments for security, efficiency, and cost-saving purposes.”
Sassa had adopted a five-year phased in plan:
• Payment of social grants as from April 2018 and Cash Payment Services (CPS) exit.
• Implementation of the hybrid model that addressed the Constitutional Court directives.
• Development of Sassa insourcing infrastructure.
Radebe said the main issues South African grant recipients should be aware of as implementation started were:
• For about over two million beneficiaries who received their grants through bank accounts, Sassa had received the details of all these bank accounts and had confirmed them, and from January 1 grants would be paid directly into the recipient’s bank account by Sassa.
• The implementation plan built in the option for recipients to migrate to the banking sector. Sassa was in discussions with commercial banks to establish a special low-cost bank account. More than five million South Africans who received their grants through electronic means – using a PIN number at an ATM, a retailer, or other pay point – would be eligible for this special, low-cost account. To ensure that there were no problems as beneficiaries moved from their current payment point to the new commercial bank, the current Sassa card held by Grinrod Bank would be valid until the end of December 2018.
Government would embark on a massive communication and education programme aimed at giving information on the choice of payment channels to be used as well as specific requirements of beneficiaries to enroll in new channels, Radebe said. – ANA