It’s now over to you, Postbank
TIME IS RUNNING OUT TO TRANSFER THE PAYMENT OF SOCIAL GRANTS Postbank will be the vehicle that must ultimately deliver in the short amount of time left.
The inter-ministerial committee (IMC) on comprehensive social security led by the Department of Social Development (DSD) outlined the progress being made to transfer social grant payments to a new provider by April 1 2018 on Friday.
The committee was formed on the instruction of President Jacob Zuma in March, to give effect to the Constitutional Court (ConCourt) order that the administration and payment of social grants be transferred from Cash Paymaster Services (CPS) to another supplier, to relieve both parties from a contract the court deemed invalid.
The press briefing was led by Social Development Minister Bathabile Dlamini (responsible for Sassa), but included Telecommunications and Postal Services Minister Siyabonga Cwele, and Home Affairs Minister Professor Hlengiwe Mkhize. 1. Over five years, Sassa will take full responsibility for social grants’ payment and administration. It must develop all the skills and capacity inhouse to manage the roughly 17 million grants currently paid each month. Using the South African Post Office Bank (Postbank) will be an interim measure to give effect to the ConCourt order. 2. The IMC instructed Sassa to undertake a comprehensive due diligence of Postbank. The Council of Scientific and Industrial Research has just completed this and will present its findings to the bid evaluation committee on September 20. 3. Sassa will seek greater oversight of the transfers made by CPS through the reactivation of the paymaster general account with the Reserve Bank. 4. From October, Sassa will be insourcing the management of Regulation 26A deductions, which are those earmarked for funeral policies. Deductions for these policies can only come off adult grants, and can’t be over 10% of the value of the grant. 5. Sassa began developing biometric identity and access capability from July, and plans to implement it over three years. Biometric identification is key to detecting and preventing fraud in the social grants system. 6. By the end of September, CPS will provide a list of some two million beneficiaries whose grants are paid into commercial bank accounts. At the same time, Sassa’s re-establishing its link to Bankserv (electronic architecture supporting the national payments system) to allow Sassa to begin making these transfers.
7. While there are serious concerns over the financial viability of the Post Office, minister Cwele says Postbank is very well capitalised.
8. Sassa data shows 45% of the 10.7 million grant beneficiaries use the “offline” infrastructure provided by CPS in the form of 10 000 paypoints and ATMs. The briefing didn’t give any indication how Sassa will replace or develop this infrastructure.
Sassa has six months to go before the deadline. While Postbank already has a network of branches, being able to replace the 10 000 contact points and the logistics capability behind that sounds like a big ask in just six months.