Post office to phase in payment of social grants from 1 April

The South African Post Office (SAPO) will need time “to phase in” its services to take over the payment of social grants from 1 April 2018.

This is what representatives from the post office told Parliament’s portfolio committee on telecommunications and postal services on Tuesday.

Over 17 million social grants are currently being paid by Cash Paymaster Services (CPS) on behalf on the South African Social Security Agency (SASSA). The five-year contract which began in 2012 between CPS and SASSA was declared invalid by the Constitutional Court. But its invalidity was suspended until 31 March 2018 to allow for the continuation of the payment of grants and to give SASSA time to appoint a new service provider. Following interventions by government, the post office was awarded the contract to distribute grants, except for cash payments.

ANC MP Juliana Kilian wanted to know: “Will SAPO be in a position to carry out this contract? Because the most vulnerable in society had to face uncertainty on whether their grants would be paid. And did you know that SASSA was going to apply for the extension?”

“The company [CPS] can’t just up and go. There has to be a closing out process for them to exit and to allow us an opportunity to set up and run,” said Lindiwe Kwele, group chief operating officer at SAPO. She said the post office needed to test the system “so that when we go live there are no glitches”.

Kwele was answering questions about SASSA’s recent application to the Constitutional Court to extend its current contract with CPS until 30 September. “It shouldn’t be called an extension really. It’s about strengthening the termination process of the current contract,” Kwele said.

“We will be starting phase one with 53.5% [about 1,500] branches that are within a five kilometres radius of SASSA pay points. The upgrade of these branches is underway. The first batch of two million cards was expected to be completed by 16 March, but they will be ready earlier than expected,” she said.

Kwele said the only hiccup in the process was documentation from SASSA needed to open the accounts with the post office. “There appears to be a delay from National Treasury,” she said.

Kwele told MPs that should the new system not be ready by 1 April, the post office would use Postbank’s Mzansi account for new beneficiaries at SASSA offices.

She said at commercial banks beneficiaries often paid fees as high as R20 a month. “SAPO is offering a free card, one free card replacement per annum, three free merchant withdrawals, one free balance enquiry per month, one free mini statement per month and one free three-month statement,” she said.

The committee’s chairperson, Jabulani Lukas Mahlangu of the ANC, asked SAPO to keep MPs updated throughout the process.

DA MP Bridget Masango said she was concerned with the “confusing” information being communicated to beneficiaries. “People need to be reassured and they need to know what they need to do come April 1,” she said. Masango also asked whether there was a plan to “rid the system” of the EasyPay Everywhere cards, also known as green cards. These cards are issued by Net1, parent company of CPS. Kwele responded that an inquiry was currently being done into the validity of these accounts.

Some MPs also raised concern about SAPO’s capacity to handle the grants payment system, in view of its “failure to meet its own mandate” which is to deliver mail and postal services.

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