COMMITTEE HIGHLIGHTS CONCERNS OF OLDER PERSONS IN ACCESSING GRANTS

By Precious Mupenzi.

• Contingency plans must be put into place to make sure social beneficiary payouts are not disrupted as the agreement between the South African Social Services Agency and Postbank comes to an end.
• SASSA’s acting CEO, Brenton van Vrede, assured parliament’s portfolio committee on social development that the agency has been introducing new systems and safeguards to protect beneficiaries.
• ⁠Committee members undertook to visit rural areas to see first-hand the challenges beneficiaries – particularly older persons – face in accessing their social grant payments.

Parliament’s portfolio committee on social development has expressed deep concern over the looming expiry of the Master Service Agreement between the South African Social Security Agency (SASSA) and Postbank, warning that millions of vulnerable South Africans, particularly older persons in rural areas, could face renewed hardship if contingency plans are not in place.

This came as the Department of Social Development and its agency SASSA were briefing the committee on 27 August 2025 on the impact of the Postbank contract termination at the end of September 2025, and the measures being implemented to ensure continuity, stability, and a smooth transition in the payment of nearly 19 million grants, which total R22.4-billion monthly.

Committee chairperson, Bridgette Masango, said the purpose of the briefing was to interrogate the impact of the South African Reserve Bank’s indefinite suspension of card replacements and to assess the risks associated with the termination of the Postbank contract.

She stressed that Parliament would hold both the Department of Social Development and SASSA accountable for uninterrupted payments, saying South Africans could not afford a repeat of past crises where beneficiaries were left destitute.

Minister Tolashe: Postbank was never SASSA’s choice

Minister of Social Development, Sisisi Tolashe, clarified that the partnership with the South African Post Office was not a matter of choice but rather the outcome of a Constitutional Court ruling involving Cash Paymaster Services (CPS).

“We got into a partnership between ourselves and the Post Office at the time through a court outcome. It was never SASSA’s choice. The Post Office volunteered itself as a friend of the court. The National Treasury then allowed a deviation, but this could not be sustained forever without attracting audit queries,” she explained.

Tolashe said the arrangement was necessary at the time due to the Post Office’s rural infrastructure, but admitted it had created challenges that continue to affect beneficiaries.

SASSA: 19 million grants, R22.4-billion monthly

SASSA’s acting CEO, Brenton van Vrede, outlined the agency’s operations, reminding the committee that the agency pays approximately 19 million grants every month, including 12 million social grants and seven million Covid-19 social relief of distress beneficiaries, amounting to R22.4-billion.

Payments are deposited directly into beneficiaries’ bank accounts across 22 banks.

MPs voice concerns

Portfolio committee member Paulnita Marais criticised the decision to rely on Postbank, recalling her early warnings that it would fail and accusing SASSA of burdening older persons unnecessarily.

“Old people were made to stand in queues for black cards, some dying, some collapsing, some hungry, knowing it was not going to work. It was very unfair to our old people. SASSA must apologise to our people because this is unacceptable,” she said.

Nokwethemba Mtshweni welcomed the presentation but reiterated her longstanding opposition to the termination of pay points, stressing that rural pensioners were forced to walk long distances and many wanted to receive their money in hand.

“Nothing will change my mind about the concern I have about the termination of the pay points. People in rural areas must walk long distances to get their grants, and they remain vulnerable to theft and corruption,” she said.

Mtshweni also highlighted the plight of young mothers and children without identity documents, pointing out that many are excluded from the grant system because they and even their grandmothers lack IDs.

Tshilidzi Munyai focused on the contractual and financial aspects of the Master Service Agreement.

He questioned why SASSA had invoked clause 5.1 instead of pursuing termination on the grounds of fundamental breach, whether legal advice had been obtained, and how the R3-billion monthly transfers to Postbank were justified.

Munyai also called for a multi-lingual public communication strategy to prevent panic and protect beneficiaries from scams.

Biometrics, backlogs, and insurance

Van Vrede assured MPs that the agency has been introducing new systems and safeguards to strengthen grant administration and protect beneficiaries.

On biometric identification, he confirmed that rollout would begin on 1 September for all new grant applicants.

“We believe we are now ready to go live with biometrics from 1 September. This will ensure that every new beneficiary is biometrically enrolled, helping to curb fraud and identity theft,” he said.

Van Vrede also emphasised that SASSA is no longer dependent on external systems to disburse grants.

“As of 1 April this year, we are running our own system and paying directly into beneficiaries’ bank accounts. That was a transition over a number of years, from CPS doing everything to where we are today,” he explained.

On the issue of funeral insurance deductions, he acknowledged that beneficiaries had been exploited in the past but stressed that tighter controls are now in place.

“We have biometrics, triple confirmations, voice recordings, and strict refund measures. If providers misbehave, they are removed from the system,” he said, while cautioning that debit orders initiated directly through banks remain outside SASSA’s control.

Addressing concerns about backlogs, Van Vrede said that account switching usually takes place within a month if done before the cut-off date.

“The name on the bank account, together with the account number, is accurately captured on our system. Under normal operations, switching should happen within a month. The only reason we had backlogs earlier this year was because over 900 000 people came forward in just two months,” he explained.

He added that beneficiaries who switch accounts after the cut-off date – normally the 20th of the month – would still receive their next payment in their old account, with funds only reflecting in their new account the following cycle.

On the exclusion of beneficiaries without IDs, Van Vrede reassured MPs that regulation 26A allows SASSA to process applications using alternative documentation such as affidavits from pastors, school principals, or traditional leaders. Applicants are then given three months to apply for an ID at the Department of Home Affairs, during which their grant continues to be paid.

To reduce fraud, mandatory biometrics are now required for new applicants and for those applying without IDs, ensuring individuals cannot lodge multiple applications across different offices, he confirmed.

Van Vrede also touched on home visits, saying these remain part of SASSA’s service offering for beneficiaries who qualify, but capacity constraints sometimes affect turnaround times.

On Postbank fees, he reassured the committee that SASSA has not received any indication of new service charges.

“We don’t believe it would be in their best interest to introduce fees because many banks already offer free accounts. If Postbank were to start charging, it would risk losing even more clients,” he warned.

Next steps

The committee agreed that the next sitting should be a joint meeting with the South African Reserve Bank, SASSA, the Department of Social Development, and Postbank to address unresolved issues around card replacements and financial risks.

Members also resolved to undertake oversight visits to rural areas to see first-hand the challenges beneficiaries face, from long distances and corruption to exclusion due to a lack of documentation.

Chairperson Masango closed the meeting by affirming that oversight is Parliament’s duty and that the department and SASSA will be held accountable if payments are disrupted in October.

“We will hold you accountable to your assurances of uninterrupted grant payments. South Africans cannot afford another crisis,” she said.