SASSA’s Decommissioning Process Has Devastating Consequences on Social Grant Beneficiaries.

7 October 2019

An in-depth study by the Black Sash and the Department of Political Studies at the University Western Cape (UWC) has found that the decommissioning of SASSA’s pay point has had a negative impact on social grant recipients, especially on their pockets and bodies[1].

The study released last week found that the cost of accessing grants has increased for all social grant beneficiaries.  This can be attributed to several factors, including the transaction fees, transportation costs (especially in rural areas), long queues, an unreliable system that is often offline, and an inadequate supply of cash to pay grants.

In December 2017, SASSA and the South African Post Office (SAPO) 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 (SDA) or Gold Gard 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.  Simultaneously, 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 is risky and expensive. The remaining cash pay points were placed under SAPO management. At no stage did SASSA outline the risks to beneficiaries, nor were beneficiaries consulted about the negative consequences of these closures.

Says Black Sash; “The closure of almost 80% of cash pay points has had a devastating impact on social grant beneficiaries, especially in rural and peri-urban areas.  Beneficiaries have a constitutional right to receive the full value of their monthly social grant in a dignified manner.  Currently, beneficiaries must join public queues at SAPO branches, retailers and ATMs without any guaranteed seating, water, shelter, access to toilets, or security. Pensioners are standing for hours and many travel to multiple payment channels in a day to get their money, or to the SASSA office to query problems. Beneficiaries may go home empty-handed due to a shortage of cash at these payment channels.

The rural grant beneficiaries are most affected.

The study found that rural social grant beneficiaries appear worse affected by the decommissioning process, as there is not always access to SAPO branch, a retailer or the NPS infrastructure, including ATMs. For many rural grant beneficiaries, the time and distance travelled to access grants has increased significantly with exorbitant transport costs which they cannot afford.

Recourse is now harder.

It has also become increasingly difficult to pursue recourse, which is exacerbated by the prevalence of fraud.” In the past, grant recipients could query problems with payment at the SASSA pay point. Now if there is a problem at a SAPO branch, ATM or retailer, they must make an additional trip to the SASSA office, and often the police station too to get an affidavit. This brings additional expenses, inconveniences and risks.

Social grant beneficiaries are unaware of the commitments made by SASSA.\

Says UWC; “Before the transition from the old CPS contract, SASSA made several commitments to ameliorate the impact of the decommissioning process.  These included a low-cost bank account with a ‘basket of services’.  SASSA also promised assistance with transport to pay points. Our study showed that most social grant beneficiates are entirely unaware of the basket of services or the promise of transportation.”

The current situation cannot continue, says Black Sash. The lives of the most vulnerable members of South African society are being compromised through constrained access to grants as a result of the decommissioning of pay points, and the inadequate provision of services by both SASSA and SAPO.

Issued by Angie Richardon on behalf of Black Sash, 7 October 2019

[1] The 2019 collaboration was an in -depth study that looked at four case-study sites in the Western Cape, Delft, Khayelitsha, Genadendaland Robertson. It also contributes to a broader ongoing Black Sash study underway nation-wide.