Post Office Could Stop Paying Sassa Grants

If business rescue practitioners have their way, the South African Post Office (SAPO) would no longer distribute social grants. This is concerning for millions of financially vulnerable people who rely on the wide footprint of Post Office branches to collect their grants. 

The South African Social Security Agency (Sassa) pays social grants to approximately 19 million financially vulnerable people monthly. This includes the distribution of several permanent grants. These grants 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 collect their grants at a post office branch as it is the only accessible way to get their money. 

However, collecting social grant payments at a South African Post Office (SAPO) branch could be a thing of the past if business rescue practitioners have their way.

SAPO was placed under Business Rescue by the High Court in July 2023 and has faced a critical financial situation, with costs consistently surpassing 200% of revenue since the fiscal year 2022. Employee costs alone account for 150% of its revenue, which indicates the urgency for a comprehensive restructuring strategy.

The Business Rescue Plan, published by the Joint Business Rescue Practitioners outlines a multi-faceted approach that focuses on rationalising costs, right-sizing the workforce, and strengthening leadership, management and technical expertise across the organisation.

Their plan to reduce costs includes the retrenchment of approximately 6,000 out of 11,083 people working for SAPO and phasing out revenue streams that have “failed to produce value”. 

The revenue services they are referring to include Over Counter (‘OTC’) payment services, which include SASSA and cash pay points (‘CPP”) payments. If the plan is adopted later this year, the Post Office will no longer pay social grants.

Creditors will have the opportunity to vote on the Business Rescue Plan on 7 December 7, 2023, as mandated by the Companies Act, 2008. A 75% majority vote in favour of the Plan is required for adoption.

Where Else Are Sassa Grants Paid?

Permanent grant beneficiaries can choose the convenience of having their grants directly deposited into their bank accounts. This method allows beneficiaries access to their funds at any time after Sassa completes the payment.

Sassa grants are distributed through various retail outlets such as Pick n Pay, Shoprite, Boxer, Usave, and Checkers. 

Mobile cash pay points provide another avenue for grant beneficiaries, though with limited flexibility. Funds can only be collected during specific hours in the grant payment cycle.