Post Office could profit more from social grant payments
The Post Office could earn almost R2.4 billion over the next five years, that’s more than double the cumulative profits earned by CPS over the same period, a report revealed.
CAPE TOWN - The Post Office could end up profiting more from paying social grants than its controversial predecessor, Cash Paymaster Services (CPS).
It’s been revealed in a report to the Constitutional Court, the Post Office could earn almost R2.4 billion over the next five years, that’s more than double the cumulative profits earned by CPS over the same period.
A panel of experts overseeing the transition of the grant payment system says it’s concerned beneficiaries could end up paying more to access their money.
While the Post Office stands to make a loss in this financial year during the takeover of the social grant payment system, by 2023 it projected it will make an annual profit of more than R800 million.
Most of its profits will be derived from doubling a monthly account servicing fee charged to the South Africa Social Security Agency (Sassa) of R13 per beneficiary.
A court-appointed panel of experts led by the Auditor General says this fee is well above the monthly cost incurred by the Post Office for maintaining beneficiary bank accounts.
The Post Office is also proposing doubling its over-the-counter fee to R23.
The panel says it’s unreasonable for the Post Office to use these profits to upgrade its branches, and that it has significantly understated the costs it would incur in providing payment services to grant beneficiaries.
It adds that with less than two weeks to go before CPS is completely phased out, Sassa and the Post Office are yet to sign a formal agreement.
And the cost to beneficiaries for accessing social grants remain uncertain.
(Edited by Zamangwane Shange)