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SASSA negotiating low bank fees for grant beneficiaries

Deductions from new accounts might not be allowed

By Barbara Maregele

1 February 2018

Photo of car with SASSA branding
SASSA is negotiating low bank charges for grant recipients. Archive photo: Barbara Maregele

The South African Social Security Agency (SASSA) has proposed subsidising a special low-cost bank account for social grant beneficiaries.

This is one of the proposals tabled by SASSA at a meeting facilitated by the Banking Association of South Africa (BASA) on 19 January.

SASSA told GroundUp this week that while talks to finalise a deal with the banks were still ongoing, the idea was to “have beneficiaries pay next to nothing for the account”.

On Tuesday, Paseka Letsatsi, head of communications at SASSA said the agency was willing to subsidise the account. SASSA was considering paying R6.71 for each account which would probably offer limited ATM withdrawal facilities and account statements.

“A decision was taken that individual banks be engaged further on the matter.”

One option was that no electronic payments or debits would go through the account. It would be limited to the social grant payment, he said.

On Monday the Black Sash called on government to cover the banking costs for beneficiaries opting to have their grants paid directly into their bank accounts.

“Grant beneficiaries will not receive their social grant in full and will be saddled with banking fees that they can barely afford and unauthorised, illegal, unlawful deductions and debit orders,” said the Black Sash in a statement. It said that the SA Reserve Bank “should also play an oversight role” and “deal decisively with any unethical conduct”.

It its most recent report to the Constitutional Court on progress appointing a new service provider to pay grants, filed on 8 January, SASSA said it would for the first time make electronic payments to approximately two million beneficiaries through its new corporate Postbank account on Thursday, 1 February, instead of through Grindrod Bank.

Postbank is the banking division of the Post Office, which signed a deal with SASSA last year to provide the core function in the new grants payment plan from 1 April this year. Grindrod is the banking partner of Cash Paymaster Services (CPS), which currently pays social grants.

Since November last year, SASSA has been encouraging beneficiaries to get their grants paid into commercial bank accounts rather than via cash paypoints or retailers. It has called it the “easier and more convenient” way to receive grants.

Talks with the banks could lead to the provision of a new low-cost account specifically tailored for grant beneficiaries. This means the two million beneficiaries would have to be given the option to open the special account or to continue having their grants paid into their present bank accounts, at their own cost.

Black Sash also said it was concerned with the state’s “hybrid payment model”, and in particular with the way cash payments are to be made. Potential service providers had until 19 January to submit bids for the cash payment contract.

On Tuesday, Letsatsi said that SASSA was “still in a procurement process” to appoint the service provider.

He said beneficiaries’ SASSA cards would remain valid until the end of the year.


Published originally on GroundUp .

© 2018 GroundUp. Creative Commons License
This article is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.

You may republish this article, so long as you credit the authors and GroundUp, and do not change the text. Please include a link back to the original article.