The South African Social Services Agency (Sassa) updated the portfolio committee on social development on the progress it has made and the readiness of the agency and the South African Post Office (Sapo) to distribute grants on April 1 when the Cash Paymaster Services (CPS) contract comes to an end on March 31.
Briefing the committee, the grant administration officer from the agency’s head office, Diane Dunkerley, said there were 2.8 million people collecting their grants in cash using biometric verification, and there were an estimated 2.3 million recipients who had money directly paid into their private, personal commercial bank accounts, and 5.7 million collected their funds from the national payment system.
One of the measures the agency has implemented to take over the payment of grants from CPS is to reactivate its PMG account, which operates within the South African Reserve Bank (Sarb) environment, through which the agency does direct transfers into the personal bank accounts of grant recipients.
She said the agency was looking at paying the money directly into the current Sassa card account holders by April 1. The card is used by the 5.7 million recipients.
The agency has also started rolling out biometric hardware to its local offices, and the first lot of 1 003 biometric reader devices will be delivered by March 15. She said the agency and the information regulator were getting all of the biometric data from CPS, which would be done together with the information regulator.
She said the agency was looking at alternative payment channels, particularly cooperative banks or cooperative financial institutions in an effort to expand its payment network by using local merchants or cooperative financial institutions.
During the February payment cycle, Sassa launched a pilot project by successfully paying directly to 100 000 of the 5.7 million Sassa card account holders who transact in the national payment system, she said.
She added the 5.7 million recipients would ultimately be migrated to the new Sassa-Sapo card in terms of the signed agreement between the two agencies.
However, these beneficiaries can still choose to have the grants paid into their personal accounts.
Dunkerley said Sassa approached the banking association to ensure 155 beneficiaries that make use of VBS mutual bank, which was placed under curatorship at the weekend, were not be affected, and added the agency was assured that the situation would be monitored closely.
She said the agency was looking at bringing on board Sapo outlets that are ready, particularly looking at outlets that are within a 5km radius from the agency’s paypoints.
She said Sapo would provide four services, which include electronic banking services for the 5.7 million grant recipients, onboarding of new beneficiaries, biometric authentification of beneficiaries and the development of software for the integrated grant payment system.
In terms of the agreement signed, Sapo would be given a six-month period of transition, which starts on April 1, she added.
Dunkerley said the card swap to give beneficiaries the new Sassa-Sapo card would start in earnest by April 30.
She said the testing of the new card was still live and under way throughout the month of March and that rural areas had been chosen for piloting these cards.
The agency expects that the cash payment service provider will be ready to start paying by July 1.
She said the contingency plan, should the court not grant the CPS extension, had not be finalised, and that there were risks involved, should the need arise that the plan is set in motion.