Grant recipients will lose the ability to withdraw cash from Post Offices, according to an announcement by the Postbank and the South African Social Security Agency (Sassa).
Sassa distributes 19 million permanent grants which include the Older Persons pension grant, Disability grant, War Veterans grant, Care Dependency grant, Foster Child grant, Child Support grant, Child Support grant Top-Up and Grant-in-aid. Many of these grant beneficiaries choose to collect cash at a Post Office branch due to its accessibility in rural areas.
The joint statement, released on Monday, outlined plans to gradually eliminate all physical cash payment points (CPPs), including the withdrawal of grants in cash from Post Offices.
This process is scheduled to kick off in January next year, concluding by 31 March 2024.
The transition will be implemented sensibly to ensure that no one is left out. The aim is to ensure continuity in the payments for everyone and that every person is paid their grant in the most efficient, safe, secure, reliable and convenient manner.
Originally unveiled in 2018, this decision is part of a broader strategy aimed at combating cash-in-transit heists, addressing adverse conditions at CPP sites, and tackling capacity challenges at the Post Office.
Postbank spokesperson Bongani Diako emphasised that while Post Office branches will continue offering non-cash services such as card reinsurances, PIN resets, and statement printing, the actual cash payments to beneficiaries will be stopped.
This development unfolds against the backdrop of the Post Office's financial struggles, having incurred a staggering R6 billion loss over the past three years, with a particularly steep R2.2 billion loss in the 2022/2023 financial year.
As part of its business rescue plan, the Post Office is set to close 420 loss-making branches and retrench 6,000 employees with the potential for a R3.8 billion government bailout.
The plan also includes phasing out revenue streams that have “failed to produce revenue”.
The revenue services they are referring to include Over Counter (‘OTC’) payment services, which include SASSA and cash pay points payments. If the plan is adopted later this year, the Post Office will no longer pay social grants.
Where Grant Beneficiaries Can Withdraw Cash
The move will require Sassa grant beneficiaries to use alternative National Payment System (NPS) channels. This includes using their Sassa gold cards at retailers for purchases or tapping into cash-back facilities.
Sassa gold card social grant recipients using CPPs and Post Office branches must now use those cards at any place that accepts a bank card. This includes making purchases in any retailer that has a point of sale to swipe for goods or withdrawing funds from any retailer that provides a cash-back functionality.
Additionally, cash withdrawals can be done at ATMs and various retailers such as Boxer, Pick n Pay, Spar, Shoprite, Usave, or Checkers. Postbank and Sassa have highlighted that the vast majority, 98%, of grant recipients already use these NPS channels.
The decision has drawn criticism from civil society organisation Black Sash, asserting that it was made without thorough research and consideration of its impact, particularly on pensioners and disabled individuals residing in rural areas.
Interviews with grant recipients have uncovered widespread dissatisfaction with concerns ranging from increased transport costs and delays at alternative payment sites to withdrawal fees at ATMs and retailers being raised.
Over 60% of recipients expressed a need for assistance at pay points which points to the challenges and drawbacks the joint announcement from Sassa and the Postbank could bring.
