BY THE MINISTER IN THE PRESIDENCY FOR PLANNING, MONITORING AND EVALUATION ON
COMPREHENSIVE SOCIAL SECURITY REPORT
TSHEDIMOSETSO HOUSE, PRETORIA
Members of the IMC
Minister of Telecommunications
and Postal Services
Minister of State
CEOs and Officials of Government Departments and Entities,
Members of the
media here present
Good morning and welcome to this much
anticipated press briefing.
The statement we are
presenting today provides the briefing on government’s work that is the
culmination of a very rigorous, in-depth and mindful process. It also serves to provide South Africans with
an update on this work the Government is doing to ensure a smooth transition in
the payment of social grants from 01 April 2018. This statement summarises the
information that was submitted to the Constitutional Court on Friday, 08 December
The team behind this worked
around the clock, bringing their collective expertise and experiences to ensure
that the needs of all social grants recipients receive government’s highest
attention. As a caring government we remain steadfast in our commitment to
provide a social security safety net that responds to challenges of poverty,
inequality and unemployment in line with Vision 2030 of the National
Development Plan (NDP).
As a point of departure let
me re-emphasize and assure the people of South Africa and particularly the
social grant recipients, on behalf of the Interministerial Committee on
Comprehensive Social Security, that government will continue to pay social
grants come 1 April 2018 and beyond.
The IMCs mandate and Terms
of Reference on Comprehensive Social Security was expanded by President Jacob
Zuma to oversee the implementation of the Constitutional Court Order of March
2017, under the chairpersonship of the Department of Planning, Monitoring and
Evaluation. The role of the IMC is to clearly act with Political Authority to guide
and direct the implementation of the Constitutional Court Order. The Court
ruled in March 2017, that the order of invalidity on the contract of the
current Service Provider be suspended for a period of 12 months ending 31 March
Subsequent to that, SASSA
considered various options for the replacement of service providers and
preferred the option of the South African Post Office as the most suitable one. Government elected to resolve the impasse
between SASSA and SAPO through the IMC, which illustrated Political Commitment
at its meeting with the Joint Committee of SCOPA and the Portfolio Committee on
Social Development on the 8th November 2017. We believe that the announcement
we are making today, demonstrates further commitment and dedication of the
Executive, to take full responsibility for the implementation of the solution
that now finally resolves the challenge of payment of social grants.
Constitutional Court on the 17th March 2017 ordered that the South African
Social Security Agency (SASSA) and the Department of Social Development (DSD) to
find an alternative service provider to Cash Paymaster Services (CPS). The
current contract with CPS for the payment of social grants was declared invalid
by the Constitutional Court in 2014 bringing finality to a legal battle that
began in 2012.
declaration of invalidity was suspended until the end of the contract period to
enable SASSA to “insource” the payment of grants. Following the Black Sash action in March 2017,
the Court further suspended the declaration of invalidity of the CPS contract
for another year, to March 2018. This was to allow the DSD and SASSA to find a
permanent solution to the payment of social grants to all beneficiaries.
the 7th of November 2017, the Constitutional Court issued Directives to SASSA
to ensure proper compliance with its order dated 17th March 2017. It directed
· provide information to Panel of Experts within the required timeframes or provide the panel, if unable to do so, within three working days of the request;
· provide appropriate and sufficient detail on processes undertaken by SASSA to obtain services of service providers, including communication with the office of the Chief Procurement Officer by 12 noon Friday 17th November 2017;
· combine statistics and information of all mechanisms involved in the payment of social grants in one consolidated document to be provided to the panel on a monthly basis;
· request GCIS to develop and implement a focused communication plan to inform current and potential beneficiaries and recipients of social grants of the implications of the transition and benefits of receiving their social grants via bank accounts provided by commercial bank or financial institution of their choice;
· report to the court, on affidavit, each month as to the progress achieved in implementing a communication plan;
· by Friday, 08 December 2017, report to the Court, on affidavit, as to SASSA’s plan to effect the uninterrupted payment of social grants:
filing its plan, report to the court each month as to the progress achieved in
implementing the plan, the steps taken to mitigate risks which could prevent
the full execution of the plan and any other matters;
Friday, 8 December 2017, report to the Court as to SASSA’s contingency plan if
a seamless transition on 1 April 2018 is not realisable; and
the Panel with appropriate and sufficient information on any steps taken to
implement these directions.
was on the basis of these comprehensive directives that the IMC committed to
align its work to the Constitutional Court reporting requirements, given the
similar timeframes and expectations of the dedicated period between now and
was also our considered view that reporting requirements must coincide with the
deadlines and deliverables of the Constitutional Court. In this way, SASSA
would remain dedicated to the task of implementation rather than dual and
different reports to different authorities
order to ensure the uninterrupted payment of social grants, and considering the
fact that the Court ordered SASSA to identify ‘an entity other than CPS to pay
social grants or take the function over itself’, SASSA’s best option was
therefore to adopt an approach which will ensure insourcing of the grant system
within government as well as seamless hand over within a period not exceeding five
years. SASSA therefore resolved to collaborate with the South African Post
Office (SAPO) to ensure a seamless phasing out of the current service provider
CPS in compliance with the Court Order in the Black Sash matter dated 17 March
am delighted today to announce to members of the media and the South African
nation that we have reached a landmark agreement between the South African Post
Office and the SASSA to bring to life a new grants payment system. This new
system while drawing on the resources and capabilities of the South African
democratic state, will also make allowance for the participation of other
partners such as enterprises and commercial banks, in the payment of social
grants to beneficiaries.
promised, the commitment of the IMC to our people was to conclude an agreement
between SASSA and SAPO.
the 17 November 2017, the Implementation Protocol agreement was finalised and
signed between SASSA and SAPO, and myself as the Chair on behalf of the IMC.
This, and the work conducted under the auspices of the IMC, subsequently led to
the signing of a Services Agreement between SASSA and SAPO on 7 December 2017. This
Agreement gives effect to the implementation of the phasing in of SAPO and the
Postbank as a service provider and also as one of the key channels through
which grants will be paid.
constitutes the first critical step of the development of an integrated grant
application and in-sourcing of payment system focusing on the following
The need for a significant improvement in the overall
service delivery to beneficiaries, including the delivery of such services in an
effective and efficient manner, including:
for beneficiaries to access their payments;
in beneficiary experience irrespective of grant delivery channel;
of a payment service within the SASSA regulatory environment;
to funds in the most remote parts of the country;
of payment service; and
of all, safeguarding and protecting the dignity of all beneficiaries.
The reduction of fraud, corruption and leakage including:
of consistent payment of the right grant to the right person at the right time;
proof of life of beneficiaries as an integral part of the payment process; and
that beneficiaries are not registered more than once.
Reducing the cost to both SASSA and the beneficiaries,
which also saves the country’s fiscus significant amounts.
Friday, 8 December 2017, the team submitted a consolidated model to the
Constitutional Court, as part of the implementation plan which makes provision for
four key channels through which beneficiaries across the country will receive
• Payments through bank accounts of beneficiaries’ choice
with commercial banks.
• Payment through merchants in large
• Payment through the Postbank of SAPO at its outlets
• Payments through a second tier of merchants which include
village banks, General Dealers, small retail outlets, Spaza shops, cooperatives
etc, which are legally registered and South African owned and operated.
will be done essentially through the insourcing of grants payments in a phased
way. One of the primary objectives of
this phasing is to fundamentally reduce cash payments for security, efficiency
and cost-saving purposes.
ROLE OF THE DEVELOPMENTAL STATE IN THE PROVISION OF COMPREHENSIVE SOCIAL
The Government of the
Republic of South Africa has since 2006 been developing and implementing the
Comprehensive Social Security System which provides a social safety net for
various vulnerable groups of people in our society. The system comprises the
Road Accident Fund, the Unemployment Insurance Fund, Social assistance
provisions such as the grant payment to elderly, disabled and children, social
relief of distress, amongst others. This system serves to enhance the social
protection of the most vulnerable provided by the developmental state.
In addition to the
above, the Government as the Executive of the developmental state is guided by
the three Levers of the National Development Plan 2030, namely; Strong and
inclusive economy, Capable State and Active Citizenry, and Building the
Capabilities of South Africans. This latter lever includes the Medium Term
Strategic Framework (MTSF) Outcome 13 of Social Protection, which includes the
Social Security, part of which are social grant payments.
response to the potential crisis of the payment of social grants was to adopt
the approach which is driven through its second NDP lever – Capable State and
active citizenry. This intervention is intended to consolidate government
capacity, to provide an effective response and sustainable solution to the
social grant payment system.
In its response to
the Constitutional Court, the IMC confirmed the adoption by government of a State
led Hybrid Model, which included a partnership between SASSA and SAPO,
increasing the role of the banks and merchants and reducing the role of cash
payment for social grants. As indicated above, the IMC signed an Implementation
Protocol on the 17th November together with SASSA and SAPO, in terms of the
Intergovernmental Relations Framework (IGR) Act, 2005 (Act No13 of 2005), which
was submitted to the Parliamentary Committees on the 21st November 2017. The
IMC made further commitment to ensure full compliance with the 7th November
Direction by the 8th December 2017.
This IGR legislation
further provides for a very detailed framework for negotiations and a dispute
resolution mechanism, which outlines court as a last resort, for public sector
entities. The signed Implementation Protocol is thus in this instance the
umbrella agreement binding the Public Sector parties and brought into effect
through the Contractual Agreement signed by SASSA and SAPO for the
implementation of the detailed project plan.
between SASSA and SAPO is founded on the principle of building the capability
of the State, through services to be provided by SAPO to SASSA, in a more cost
effective manner when compared to either the Private Sector or the current
incumbent service providers. The Build,
Operate and Transfer Model allows the investment made to SAPO to directly
benefit and be transferred to SASSA at the end of the five-year period. The
public sector-led component of this Hybrid Model allows government to effectively
monitor the payment of social grants and intervene timeously if necessary with
additional resources or capacity during this period. This will be done without benefitting or
breaching contractual agreements between the government and private sector parties.
allows for retention of assets, systems and data with state entities for the
benefit of government and the beneficiaries. It further protects the personal
information of beneficiaries from abuse by private sector companies for ambush
marketing and sale of financial products and deductions which the poor cannot
afford. The State information will be retained and protected and will, in the
future, be consolidated with other state information such as that from Home
Affairs (National Identification System), Human Settlement (Housing Subsidies)
and Transport (Drivers Licences).
The Hybrid Model
further envisages increasing the role of financial institutions through a
Migration Plan over the five-year period and beyond. The Banking Association of
South Africa, Reserve Bank and some banks have met with the IMC’s Technical
Committee’s subcommittee on a Financial Model to discuss the establishment of a
Special Disbursement Account which will be more affordable than normal bank
accounts with respect to transaction fees. An effective communication plan by government
and aggressive marketing plans by the respective banks will be necessary to
migrate beneficiaries to new bank accounts away from cash pay points.
The Hybrid Model
further identifies the role of “second economy” merchants such as General
Dealers, corner shops, spaza shops, village banks and cooperatives in township
and rural areas outside of the 5km radius, which are legally registered and South
African owned and operated. This will provide
a wider network of outlets, greater accessibility for beneficiaries within
rural villages and townships and eliminate transport costs to banks and town
SAPO ROLES AND
will be responsible for the provision of the following services:
· electronic banking services, including the provision of a central holding account and special disbursement accounts;
· on-boarding of new beneficiaries;
· development, in conjunction with such other state capabilities as may be required of the required software solution to replace the incumbent systems.
will also provide cash disbursement through its branch network, particularly in
locations close enough to replace existing cash pay-points. SAPO may develop a competitive alternative to
the current cash in transit pay-point service, subject to the approval of
SASSA. SAPO will at all times ensure
compliance with the SASSA Act, 2004.
SASSA ROLES AND
SASSA is responsible for the following in
The provision of all
related information SAPO will need to make all decisions necessary in the
payment of grants.
to SAPO a beneficiary payment file prior to the grant being paid.
Providing SAPO with
Beneficiary biometric data and beneficiary biographic data.
The provision of the funding for the payment of social grants.
Providing SAPO with
all reasonable assistance in order to render the services.
SASSA will also be responsible
(a) managing and
overseeing SAPO’S performance;
(b) monitoring the
quality of the Services;
meetings with SAPO as agreed; and
(d) assisting SAPO,
where reasonable and necessary.
All of this is to
ensure SAPO provides beneficiaries with the highest level of service as per the
REVIEWED PAYMENT CHANNELS
a review is considered, it has to be stated that SASSA’s grant distribution and
service is a national imperative which will be informed among others by the
in the most convenient way to beneficiaries that accounts for their
socio-economic, educational and other related aspects of the beneficiary
for Beneficiaries to access their payments
to funds in the most remote parts of the country
implementation of the Hybrid Payment Model as espoused in the SASSA Act will be
intensified and beneficiaries will be given a number of options to be able to
exercise their wider choice.
To this end, SASSA has adopted a 5-year
phased in plan as follows:
Phase 1: Payment of
Social Grants as from April 2018 and CPS Exit. (Year 1);
Implementation of Hybrid Model that addresses the Constitutional Court
directives (Year 2 & 3);
Phase 3: Development
of SASSA Insourcing Infrastructure (Year 4 & 5)
Grants have played a significant role in stimulating and supporting business in
general, government has taken a conscious decision to place Social grant
payments as a platform for integration of local enterprises into the social
grants distribution value chain and unlock the potential of small, medium and
micro enterprises (SMMEs), cooperatives, township and rural enterprises. This
move will also assist to reduce the government’s bill on service fees for cash
the signing of the SASSA / SAPO Agreement our implementation plan commences
immediately and more details about this will be shared with beneficiaries over
the coming weeks and months.
main issues we would like South African grant recipients to be aware of as
implementation starts, are the following:
for about over 2 million beneficiaries who receive their grants through bank
accounts, SASSA has received the details of all these bank accounts and has
confirmed them, and from 1 January 2018 your grant will be paid directly into
your bank account by SASSA.
implementation plan builds in the option for recipients to migrate to the
banking sector. SASSA is in discussions
with commercial banks for the establishment of a special low cost bank
account. More than 5 million South
Africans who receive their grants at the moment through electronic means – that
is using a PIN number at an ATM, a retailer or other pay point – will be eligible
for this special, low cost account. To
ensure that there are no problems as beneficiaries move from their current
payment point to the new commercial bank, the current SASSA card held by
Grinrod Bank will be valid until the end of December 2018 – let me emphasizes
this - the current card will remain valid beyond the current validity date of
2.9 million South Africans (which is 29% of beneficiaries) receive their grant
payments in cash at more than 10 000 cash points across the country. These beneficiaries use biometric
verification at the point to receive their grant in cash. For a short to medium term, these
beneficiaries will continue to use the current cash payment method. SASSA will go out on a competitive bidding
process to procure the service of a service provider for cash distribution at
and SAPO will embark on a process to verify the mapping done by SASSA of pay
points and SAPO branches. The intention is to determine pay points that can be
migrated to SAPO infrastructure to minimize duplication without compromising
service delivery to beneficiaries. However, the norm of keeping pay points
within a 5 kilometre radius of the beneficiaries will be maintained. The migration of pay points to the SAPO
facilities will facilitate natural migration to the SAPO and electronic payment
SASSA and SAPO will cooperate on to conducting the biometric authentication of
beneficiaries through linking with HANIS.
SASSA on the other hand will verify the biometric data of all beneficiaries
in its possession and transferred such to SAPO for uploading for utilisation
as far as the enrolment of new beneficiaries is concerned, SASSA will build
capacity to take the enrolment function from CPS. This will include the design
of the requirements, upgrading of infrastructure, procurement of biometric
enrolment equipment and training of staff. The SASSA and SAPO systems will have
to be configured to enable SAPO to issue a payment card once a beneficiary has
Finally, SASSA and SAPO will identify card issuance sites
where interface with beneficiaries will happen. Consideration was made to use
pay points on payment days to issue new cards to beneficiaries. Communication
will therefore be issued to beneficiaries to request them to visit identified
sites to receive their new cards.
project will be implemented by government through the following departments and
The DSD, SASSA, the NDA, Telecommunications and Postal
Services and SAPO
Trade and Industry; Small Business Development; Rural
Development and Land Reform; Agriculture and COGTA
GCIS will lead the communication and public awareness
workstream involving all IMC departmental and agency communicators
LET ME REITERATE:
government has announced a landmark agreement between the South African Post
Office and the South African Social Security Agency on a new grants payments
system to be implemented from 1 April 2018.
grants will continue to be paid as directed by the Constitution, and through
existing channels until then.
SASSA Card will expire come December 2017.
grants remain an essential part of Government’s social protection programme
which protects the poor and vulnerable.
we will achieve the NDP Vision of an inclusive and responsive social protection
is committed to making the payment of grants as easy as possible. We are cognizant of the fact that grant
recipients live across the length and breadth of the country, in areas with
different characteristics of demography, geography and culture which will influence
significantly the method to be used in their distribution. We are also conscious
of the challenges we may face due to the phase in process.
is against this background that government will embark on a massive
communication and education programme aimed at giving information on the choice
of payment channels to be availed as well as specific requirements of
beneficiaries to enroll in new channels.
We hope to be doing this in collaboration with all partners and
stakeholders in this process. The process of information dissemination starts
here with you members of the press, and we appeal to you to further amplify the
message to all, directly and indirectly affected.
wish both SAPO and SASSA as well as other partners who will be involved in
rolling out the establishment of this new system all the best moving forward.
Together we can move South Africa forward.
would like to thank the members of the IMC, my fellow Ministers: Minister Cwele
of Telecommunications and Postal Services; and Minister Dlamini of Social
Development, amongst others and the Technical Team of the IMC on Comprehensive
Social Security, who have been working for the past month in ensuring that all
elements of this new plan of paying Social Grants according to the
Constitutional Court directive are met.
wish all the grant recipients, their families and all South Africans, including
members of the press, a safe festive season and a happy entrance to the New