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Social grants: Sassa to make R541m advance payment to Post Office

In an affidavit filed with the Constitutional Court, Social Development Minister Susan Shabangu says the money will be recouped over four years.

Picture: Sethembiso Zulu/EWN.

CAPE TOWN – The South African Social Security Agency (Sassa) has revealed that it will make an advance payment of R541 million to the Post Office, to help it to pay social grants in cash.

In an affidavit filed with the Constitutional Court, Social Development Minister Susan Shabangu says the money will be recouped over four years.

Shabangu cancelled a tender for a service provider to pay grants in cash, after legal challenges by one of the bidders.

Last month, the Constitutional Court appointed a panel of experts, saying it was concerned about the cost implications of only contracting the Post Office to pay grants in cash.

It said without a competitive bidding process, the Post Office could charge what it liked.

But Minister Shabangu has now informed the court that a figure has been agreed on following consultations with the ministers of finance and telecommunications.

Post Office will bill Sassa based on agreed tariffs and Sassa will recover the R541 million by reducing its monthly payments to the Post Office.

In its monthly report to the court, Sassa says the Post Office is investigating what payment infrastructure can be used to make cash payments where pay points are being shut down.

Dispensing units are expected to be tested this month.

Sassa says during July, it will be prioritising card swaps for cash recipients so they will have more options in terms of how they can receive their grants.

Meanwhile, Sassa says it could take at least three days for beneficiaries to receive their social grants following a "systems failure".

The glitch led to some people returning empty-handed from pay points and ATMs on Monday.

Beneficiaries have been issued new cards that should allow them to access their grants from Sassa and the Post Office. Officials are hopeful the system will run better in future.

Sassa acting CEO Abraham Mahlangu says the payment system crashed due to pressure from the number of beneficiaries who were trying to access their money.

Mahlangu says another contributing factor was that some pay points have not yet changed over to the new payment system.

“Some retail merchants have not actually updated their account verification number, so that also resulted in it.”

Mahlangu says tests were conducted before the new cards were distributed to beneficiaries.

(Edited by Leeto M Khoza)

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