The never-ending cycle of problems for Sassa beneficiaries

A new study has found that the decommissioning of Sassa’s pay point has had a negative impact on social grant recipients. The Black Sash and Sassa weigh in.

FILE: The Black Sash called on the Sassa to bring back pay points, particularly in rural areas, as the cost of accessing grants has increased for all social grant beneficiaries. Picture: Thomas Holder/EWN.

CAPE TOWN – Standing in the rain, long queues, and an unreliable system that is often offline are some of the issues recipients of South African Social Security Agency (Sassa) grants have to deal with every month.

These findings were made in a study published by advocacy group The Black Sash, together with the department of political studies at the University of the Western Cape (UWC). They found that the decommissioning of Sassa’s pay points had a negative impact on social grant recipients.

The Black Sash called on the Sassa to bring back pay points, particularly in rural areas, as the cost of accessing grants has increased for all social grant beneficiaries.

Speaking on 702’s Breakfast Show on Thursday morning, Black Sash national director Lynette Maart said it was disheartening to see the most vulnerable people in the country struggle to access their grants.

“We want Sassa to think very carefully and to bring back the pay points, especially in rural areas. It is really difficult to see how people have to pay money to get to a pay point and then there’s no money when they get there. They also need to pay for bank charges.”

The study found that beneficiaries now had to pay transaction fees, which means they go home with less money.

Many people also need to pay transportation costs, especially in rural areas, only to stand in long queues. At times, beneficiaries were sent away due to an inadequate supply of cash to pay grants.

The study found that rural social grant recipients appear worse affected by the decommissioning process, as there is not always access to a South African Post Office branch, a retailer or the national payment system (NPS) infrastructure, including ATMs.

“People spend a lot of money to get to pay points or payment channels. In some of these areas, there are no branches. Often there are no retailers and other structures like ATMs are not available in those areas,” Maart said.


In response, senior media relations manager at Sassa Kgomotso Diseko told 702 they welcomed the study by the group and the university. Diseko admitted that Sassa faced challenges with its new system.

“Our partners at the Post Office are working hard to address these issues. They are strengthening their infrastructure.”

Diseko went on to say not all payments were made at the same time and some beneficiaries were scheduled on other dates.

“People at pay points don’t receive their money on the first of every month because we have different dates for the pay points. The difficulty is that people don’t wait for that pay date and they know the money is in on the first of every month. So, they use public transport to access their money from banks.”

However, Sassa said it was unfortunate that the Black Sash conducted the study without its input.

“The study interviewed only inconvenienced beneficiaries as if there is not a single beneficiary whom the current system of multiple payment channels works for and this is questionable,” a statement read.

Sassa further stated that it saved R1 billion approximately, since the end of the payment contract with Cash Paymaster Services (CPS) in September 2018.

“While the contract with CPS proved convenient to beneficiaries because payments were made at mobile designated points, this payment model also introduced unintended consequences, not the least of which were unauthorised deductions.”

CPS administered grants to over 10 million beneficiaries between 2012 and 2018. However, the Constitutional Court found the agreement between Sassa and CPS was irregular as they had not followed proper tender processes.

CPS lost its contract to the Post Office in 2018, and most banks now allow beneficiaries to access their funds.

In December 2017, Sassa and the South African Post Office signed an agreement for the provision of a state-led-hybrid social grants payment model.

This included the creation of a ring-fenced Sassa/Sapo special disbursement account or gold card that grant beneficiaries could use to access free services at Sapo branches, as well as Sassa cash pay points and merchants.

In 2018, Sassa abandoned its tender process for a service provider to make cash point payments.

At the same time, Sassa started to reduce the pay points from 10,000 to 1,780 premised on the rationale that South Africa has a developed National Payment System (NPS) infrastructure, and the transportation and management of cash are risky and expensive.

The remaining cash pay points were placed under Sapo’s management. Sassa said this was in line with a 2017 Constitutional Court ruling.

“To better understand the rationale behind Sassa reducing the number of pay points, the directions of the Constitutional Court are instructive. On 29 November 2017, the ConCourt directed Sassa and the minister of social development to set up a system of direct payments into beneficiary accounts enabling the beneficiaries to
access grants through the NPS.”

The Black Sash, however, accused Sassa of not having outlined the risks of the new system to beneficiaries and added they were not consulted about the negative consequences of the pay point closures.