Social development minister Sisisi Tolashe has lashed out at state-owned Postbank for the crisis facing social grant beneficiaries who are required to swap their SA Social Security Agency (Sassa) grant gold cards for Postbank cards by March 20.
She expressed pessimism in an address to parliament’s social development committee on Wednesday about the successful completion of the conversion by the new deadline — an extension from the previous February 28 deadline — saying the deadline had not been informed by any facts. She said there was a crisis.
After the deadline, social grant beneficiaries — there are about 28-million in SA — will not be able to use their Sassa cards to receive their grants, creating a lot of anxiety that they will not be able to access their payments.
Committee chair Bridget Masango said the March 20 deadline was a “joke” and had to be extended. The committee is calling on Postbank to provide a full report.
Postbank, the minister said, had to appear before the committee to present a workable plan adding her team was looking at all ways to address the problem.
There is much confusion about the swap and complaints about the long queues, long waiting times, network glitches and slow service times at Postbank outlets, which are not always in proximity.
Tolashe said that in some cases, tellers had no clue about what they were doing and the system produced 12 cards in four hours. Social grant beneficiaries can opt to receive their grants in their bank accounts.
Another problem, the minister said, was many people were not aware of the existence of Postbank.
Sassa and the department of social development also told MPs the Gauteng High Court had erred in finding the Covid-19 social relief of distress (SRD) grant was a permanent grant. They plan to take the judgment on appeal, believing it is flawed. This is also the view of the Treasury, which also believes the judgment should be appealed in its entirety.
The court ruled in favour of an application by the Institute for Economic Justice and #PaytheGrants that the regulations governing the grant were unconstitutional and invalid.
The applicants objected, among other things, to the restriction of applications to online applications, which excluded many potential applicants with no online access; the definition of income and financial support; flaws in bank verification of income; the amount of the grant; failure to pay successful applicants; and the income threshold.
Judge Leonard Twala ruled the SRD grant was a permanent grant, the amount of the grant — presently R370 per month — must be raised to the food poverty line, which amounted to R796 per person in 2024, and the income threshold for grant recipients of R624 per month be raised.
Sassa currently processes about 17-million SRD applications per month with an average of 8-million being approved. The judge noted there were 18.3-million poor people with insufficient food to sustain themselves who were potential beneficiaries of the grant.
Finance minister Enoch Godongwana told journalists ahead of the anticipated tabling of the 2025 budget, which was withdrawn last week, that abiding by the judgment would cost the fiscus about three times the R35bn provided for until March 2026. No financial provision was made in the budget for funding the grant in the two outer years of the medium-term expenditure framework as the Treasury had alternative plans related to the consolidation of job activation programmes.
The department and Sassa submitted an application for leave to appeal on February 13 and the Treasury has also done so.
“Should the leave to appeal be granted, this will suspend the ruling against the regulations until the appeal is heard. We are now awaiting the decision from the court, which will guide the next steps,” the department and Sassa said in a presentation to the committee.
They said the SRD grant had a specified end-date of March 31 2025. This was extended for a year in the budget that was rejected by cabinet a week ago.
“For the provision to become a grant, all policymaking processes need to be followed and the Social Assistance Act must be amended to allow for the provision. Such legislative amendments have not yet been undertaken as the policy process towards this has not been concluded,” the presenters said.
The SRD grant was introduced in 2020 to deal with the humanitarian crisis produced by the Covid-19 pandemic, and has been extended in each of the subsequent years.
Stanley Matshote of accounting firm Masegare & Associates briefed the committee on the findings of an investigation into the vulnerability to fraud and corruption in the administrative system for the SRD grant. These vulnerabilities were brought to light by two Stellenbosch students, Joel Cedras and Veer Gosai. The department appointed Masegare to conduct the investigation.
Matshote said the system, while not highly vulnerable, faced a moderate risk to certain types of attack, which, however, could have serious consequences.
Sassa chief information officer Abraham Mahlangu mapped out the implementation plan to address the weaknesses identified in the Masegare report. The plan involved short-, medium- and long-term actions and would take about 18 months to complete.
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