Pay­ment of so­cial grants a pri­or­ity

Public Sector Manager - - News -

Gov­ern­ment is work­ing hard to en­sure that so­cial grants are paid with min­i­mum dis­rup­tions

As the South African Post Of­fice (SAPO) con­tin­ues with its prepa­ra­tions to fa­cil­i­tate the elec­tronic pay­ment of so­cial grants, the Con­sti­tu­tional Court has granted an ex­ten­sion to Cash Pay­mas­ters Ser­vices (CPS) in re­spect of cash pay­ments.

In a judg­ment handed down on 23 March 2018, the Court granted an or­der ex­tend­ing the dec­la­ra­tion of in­va­lid­ity of the con­tract be­tween CPS and the South Africa So­cial Se­cu­rity Agency (SASSA) a fur­ther six months from 1 April 2018 in re­spect of the cash pay­ments of so­cial grants only.

The Court also or­dered that SASSA and CPS have a con­sti­tu­tional obli­ga­tion to en­sure pay­ment of so­cial grants to grant ben­e­fi­cia­ries.

Last year the Con­sti­tu­tional

Court or­dered that SASSA and the Depart­ment of So­cial Devel­op­ment find an al­ter­na­tive ser­vice provider to CPS.The con­tract with CPS for the pay­ment of so­cial grants was de­clared in­valid by the Con­sti­tu­tional Court in 2014 bring-

ing fi­nal­ity to a le­gal bat­tle that be­gan in 2012.

The dec­la­ra­tion of in­va­lid­ity was sus­pended un­til the end of the con­tract pe­riod to en­able SASSA to “in­source” the pay­ment of grants. Fol­low­ing the Black

Sash court ac­tion in March 2017, the Court fur­ther sus­pended the dec­la­ra­tion of in­va­lid­ity of the CPS con­tract for an­other year to March 2018. This was to al­low the DSD and SASSA to find a per­ma­nent so­lu­tion to the pay­ment of so­cial grants to all ben­e­fi­cia­ries.

A new sys­tem

A land­mark agree­ment was then reached be­tween SAPO and the SASSA to bring to life a new grants pay­ment sys­tem. This new sys­tem, while draw­ing on the re­sources and ca­pa­bil­i­ties of the South African demo­cratic state, will also make al­lowance for the par­tic­i­pa­tion of other part­ners such as en­ter­prises and com­mer­cial banks, in the pay­ment of so­cial grants to ben­e­fi­cia­ries.

The ser­vice agree­ment signed be­tween SASSA and SAPO in De­cem­ber 2017 en­abled SAPO to part­ner with SASSA in the pay­ment of so­cial grants, ush­er­ing in a pub­lic sec­tor-led and ef­fi­cient grants pay­ment hy­brid model.

Re­cently, Postal Ser­vices Min­is­ter Siyabonga Cwele re­vealed that the South African Post Of­fice (SAPO) has met the obli­ga­tions in its role for the readi­ness of the elec­tronic pay­ment op­tion for so­cial grants.

The prepa­ra­tions in­clude a process of swap­ping ex­ist­ing cards with newer prod­ucts.

“As you would ex­pect with a project of this mag­ni­tude and scale, we would re­quire a phas­ing in and phas­ing out pe­riod,” Min­is­ter Cwele said.

He said the Post­bank will be able to play its role in the pay­ment of so­cial grants even though it does not have a bank­ing li­cense.

SAPO CEO Mark Barnes said SASSA will use its Pay­mas­ter Gen­eral (PMG) ac­count at the South African Re­serve Bank to fa­cil­i­tate di­rect trans­fers into the Spe­cial Dis­burse­ment Ac­count (SDA) via Bankserv.

“The SDA prod­uct has been cre­ated in Post­bank's core bank­ing sys­tem and is ready. In­di­vid­ual ac­counts will be opened dur­ing on-board­ing of new ben­e­fi­cia­ries com­menc­ing 3 April 2018 at all SASSA of­fices and card-swop of ex­ist­ing ben­e­fi­cia­ries will com­mence at all SAPO branches on 16 April 2018 and at all iden­ti­fied com­mu­nity halls and other venues from 30 April to be com­pleted by 30 Septem­ber 2018,” said Barnes.

SASSA cards

The Post­bank has re­ceived the first batch of 250 000 cards which have been cer­ti­fied by Visa. These are cur­rently be­ing tested by the Pay­ment As­so­ci­a­tion of SA (PASA) and lo­cal banks for ap­proval.

“It would take the Post­bank 43 work­ing days to de­liver all the re­quired cards from the day of cer­ti­fi­ca­tion by the PASA and lo­cal banks.

“It is im­por­tant to note that the cur­rent Cash Pay­mas­ter Ser­vices (CPS)/SASSA cards that were ex­pir­ing last year were ex­tended and are still valid un­til De­cem­ber 2018 or un­til re­placed by a new card is­sued by SASSA and SAPO,” Barnes stressed.

As of 3 April 2018, the Post­bank will is­sue new ben­e­fi­cia­ries with Mzansi cards if the new SASSA cards are not avail­able.

These will be swopped with new cards as they be­come avail­able.

Min­is­ter Cwele said the In­ter Min­is­te­rial Com­mit­tee (IMC) on Com­pre­hen­sive So­cial Se­cu­rity has in­structed its tech­ni­cal team to mo­bilise all gov­ern­ment de­part­ments nec­es­sary to en­sure that the so­cial grant pay­ments

take place peace­fully and with min­i­mum dis­rup­tions.

“We are mo­bil­is­ing our mu­nic­i­pal­i­ties and coun­cil­lors to en­sure that they also com­mu­ni­cate the mes­sage that gov­ern­ment is ready and com­mit­ted to pay­ing so­cial grants,” said Min­is­ter Cwele.

Com­mit­ment to pay so­cial grants

The Min­is­ter reaf­firmed gov­ern­ment's com­mit­ment to en­sur­ing that so­cial grants are paid with min­i­mum dis­rup­tion as pos­si­ble.

“Some of the pub­lic de­bate on this process has led to the per­cep­tion that Gov­ern­ment does not care for the poor.

I would like to dis­pel such a per­cep­tion, be­cause our gov­ern­ment cares about the poor and will en­sure that the grant re­cip­i­ents will con­tinue re­ceiv­ing their grants with­out hin­drance or dis­rup­tion as we im­ple­ment and com­ply with the court de­ci­sion,” Min­is­ter Cwele said.

He added that the IMC is work­ing very hard to en­sure that so­cial grants ben­e­fi­cia­ries get paid.

This com­mit­ment is high­lighted by the sub­mis­sion of the Fourth Quar­terly Re­port to the Con­sti­tu­tional Court in ful­fil­ment of the Court's or­der.

Min­is­ter Cwele said gov­ern­ment is try­ing to re­duce the num­ber of ben­e­fi­cia­ries who re­ceive their pay­ments in cash be­cause it is the riski­est and most ex­pen­sive de­liv­ery model.

“There are cur­rently about 2.8 mil­lion ben­e­fi­cia­ries that get paid in cash at pay points. SASSA is com­mu­ni­cat­ing di­rectly to young and able bod­ied ben­e­fi­cia­ries to en­cour­age them to opt for re­ceiv­ing their grants via elec­tronic means,” Min­is­ter Cwele said.

SASSA mak­ing progress

SASSA has re­ac­ti­vated the PMG ac­count and is us­ing this to man­age the money for the di­rect trans­fers. This means that the money is not paid over to a pri­vate con­trac­tor in ad­vance, but re­mains within the gov­ern­ment en­vi­ron­ment un­til de­posited into the so­cial grant ben­e­fi­ciary ac­counts.

In ad­di­tion, SASSA has suc­cess­fully im­ple­mented pi­lot projects since Jan­uary 2018 by di­rectly pay­ing ben­e­fi­cia­ries who re­ceive grants via com­mer­cial banks, in­clud­ing Post­bank.

Di­rect pay­ments were made to more than 2.3 mil­lion ben­e­fi­cia­ries in March 2018 and this num­ber is ex­pected to in­crease fur­ther in April 2018.

The test­ing for di­rect pay­ment for ben­e­fi­cia­ries re­ceiv­ing their money through the SASSA pay­ment card was com­pleted for

100 000 ben­e­fi­cia­ries for the March 2018 pay­ment pe­riod.

In April, 5.7 mil­lion ben­e­fi­cia­ries trans­act­ing through the SASSA Pay­ment Card will be paid di­rectly by SASSA with­out the as­sis­tance of CPS.

SASSA also in­tends on de­posit­ing money into the cards for those ben­e­fi­cia­ries who re­ceive their so­cial grants in cash from pay points.

The only sup­port that will be re­quired for these ap­prox­i­mately 2.8 mil­lion ben­e­fi­cia­ries is the dis­tri­bu­tion of cash at the pay points.

SASSA Act­ing CEO Pearl Bhengu and SAPO CEO Mark Barnes.

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