The Post Office (SAPO) will take over social grant payments on behalf of the South African Social Security Agency (Sassa) from April 2018.
A Services Agreement signed last week effect to the implementation of the phasing in of SAPO and the Postbank as a service provider and also as one of the key channels through which grants will be paid.
Making the announcement, minister in the presidency Jeff Radebe says the agreement constitutes the first critical step of the development of an integrated grant application and in-sourcing of payment system.
On Friday (8 December 2017), the team submitted a consolidated model to the Constitutional Court, as part of the implementation plan which makes provision for four key channels through which beneficiaries across the country will receive their grants.
According to the plan, beneficiaries with commercial bank accounts will receive their payments in their accounts. Other payment methods will be through merchants in large retail shops, through Postbank and via a second tier of merchants which include village banks, general dealers, small retail outlets, spaza shops, and co-operatives.
In terms of the agreement, SAPO will be responsible for the provision of the following services:
* Electronic banking services, including the provision of a central holding account and special disbursement accounts;
* On-boarding of new beneficiaries;
* Biometric authentication of beneficiaries; nd
* Development, in conjunction with such other state capabilities as may be required, of the required software solution to replace the incumbent systems.
SAPO will also provide cash disbursement through its branch network, particularly in locations close enough to replace existing cash pay-points. SAPO may develop a competitive alternative to the current cash in transit pay-point service, subject to the approval of SASSA.
SASSA is responsible for:
* The provision of all related information SAPO will need to make all decisions necessary in the payment of grants.
* Providing timeously to SAPO a beneficiary payment file prior to the grant being paid.
* Providing SAPO with beneficiary biometric data and beneficiary biographic data.
* The provision of the funding for the payment of social grants.
* Providing SAPO with all reasonable assistance in order to render the services.
SASSA will also be responsible for managing and overseeing SAPO’S performance, monitoring the quality of the services, convening meetings with SAPO as agreed and assisting SAPO, where reasonable and necessary.
“The partnership between SASSA and SAPO is founded on the principle of building the capability of the state, through services to be provided by SAPO to SASSA, in a more cost-effective manner when compared to either the private sector or the current incumbent service providers,” Radebe says.
“This partnership allows for retention of assets, systems and data with state entities for the benefit of government and the beneficiaries. It further protects the personal information of beneficiaries from abuse by private sector companies for ambush marketing and sale of financial products and deductions which the poor cannot afford.
“The state information will be retained and protected and will, in the future, be consolidated with other state information such as that from Home Affairs (National Identification System), Human Settlement (Housing Subsidies) and Transport (Drivers Licences).”
The role of financial institutions will be increased over the next five years. Commercial banks are working with the Banking Association of South Africa and the Reserve Bank on establishing a special disbursement account which will be more affordable for grant recipients.