SASSA struggles to migrate all beneficiaries

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Over half a million SASSA beneficiaries are still in possession of the old cards.
Over half a million SASSA beneficiaries are still in possession of the old cards.

Over half a million social grant beneficiaries still have to migrate to the South African Social Security Agency's (SASSA's) modernised payment cards.

This is according to SASSA, urging those beneficiaries, still holding on to the old card, to swap it for the new gold card.

As part of a phase-out approach to replace the SASSA/Grindrod Bank-branded cards, the agency confirmed in June that it was administering welfare payments using its new card design.

The cards, developed in partnership with the SA Post Office (SAPO), were introduced in line with efforts to take over the grants payments function from Cash Paymaster Services (CPS).

At the time, social development minister Susan Shabangu noted the card's modern features, which include biometrics, mean beneficiaries can use it at any of the banks in the country. However, Net1 UEPS Technologies, parent company of CPS, hit back saying that is what it had been doing since 2012.

According to SASSA, although it's made significant progress in migrating beneficiaries, some still run the risk of not getting their welfare payments in January 2019.

SASSA acting CEO Abraham Mahlangu states: "November is the deadline for obtaining the new SASSA cards and unfortunately there will be no extension.

"We also wish to warn beneficiaries that soon we will no longer make any social grant payments into these old cards. For this reason, affected beneficiaries have to visit the nearest SASSA or post office to do a card swap. They have to bring along their ID and the old card so they can be issued with the new one. The process takes less than five minutes."

Costly extension

For six months, after the 31 March deadline, CPS continued to assist SASSA to distribute cash payments to the social grant recipients at pay points, an exercise Net1 has labelled costly for its subsidiary.

In its first quarter 2019 results report, CEO Herman Kotz'e said as SASSA commenced with its phase-out activities, the company experienced very difficult trading conditions as it had to deploy full infrastructure to ensure seamless service delivery to an undetermined and declining customer base.

"As a result, we incurred significant operating losses in anticipation of the proposed fee adjustment being sanctioned by the Constitutional Court, which has not yet been executed.

"In addition, SASSA performed a forced migration of approximately 900 000 EPE customers to SAPO during the last three months of the contract in order to meet their targets for SAPO, which we consider to be illegal and unfortunately requires further legal action. We are disappointed that the last three months of our contract had to end in this manner, but as we have said previously, we expect FY2019 to be both a transitional and transformational year."

Kotz'e added that despite the many challenges over the last few months, Net1's transformation is well under way and the business is now free to focus on the reconfiguration of its distribution network to provide affordable transactional and financial services to its target market.

SASSA's business ties with CPS came to a close when the extended contract expired at the end of September. From 2012, the social security agency relied on the services of CPS to pay 10.8 million beneficiaries through cash payments, direct deposits and electronic payments.

As the distributor of the majority of South African social grants, CPS faced a slew of allegations that it authorises deductions on beneficiaries' accounts before their social grants are paid out. The payments provider refuted these claims.

Mahlangu says SASSA is pleased to have complied with the instructions of the ConCourt, particularly in ensuring it gets rid of any contractual ties with CPS.

Meanwhile, he also warned beneficiaries to ignore tempting SMSes and WhatsApp messages claiming SASSA and some retailers are offering vouchers for unemployed people.

"This is fake news generated by criminals who want to defraud unsuspecting beneficiaries this festive season. Social grants for December will be made available from as early as 28 November at post offices, stores and ATMs to avoid the December rush. Cash pay points will, however, start paying from 3 December."

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