Government puts its faith in Post Office to distribute grants

GOVERNMENT is confident that the South African Post Office (Sapo) will be up to the task of distributing social grants to millions of recipients.

Sapo will partner with enterprises and commercial banks to ensure a seamless transition from Cash Paymaster Services (CPS) who have been given the boot.

Minister in the Presidency Jeff Radebe made the announcement yesterday and stated that the new system will kick in in April 2018 and will feature participation of commercial banks and companies to ensure swift payments of grants to people living in rural areas.

Radebe chairs the inter-ministerial committee tasked with finding a solution to the social grants distribution system following the Constitutional Court’s declaration of the contract with CPS as illegal in June.

The new system will also make allowance for the participation of other partners such as enterprises and commercial banks, in the payment of social grants beneficiaries.

The South African Post Office and SA Social Grants Agency (Sassa) deal means grants beneficiaries will have the option of being paid through commercial banks.

Other options include payments through merchants in large retail shops, through the the Post Office’s Postbank, payments through a second tier of merchants which include village banks, general dealers, small retail outlets, spaza shops, cooperatives, which are legally registered and South African-owned and operated.

Radebe said the new system 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,” he said.

The South African Post Office will also provide electronic banking services including the provision of a central holding account and special disbursement accounts.

It will also provide on-boarding of new beneficiaries, biometric authentication of beneficiaries and the development of the required software solution to replace the incumbent systems in conjunction with such other state capabilities as may be required.

Sassa will manage and oversee the Sapo’s performance, monitor the quality of its services, convene meetings and assist the parastatal.