Social grants is one government system that must not fail
26-million people depend on it
Every month the government spends over R22 billion on social grants, about 17% of tax revenue.
The vast majority of payments are to 13 million children, each receiving R500 per month. Nearly four million older people receive R2,080 per month. A further one million people with disabilities receive the same amount. More recently about 8.5 million people have been receiving the R350 per month social relief of distress grant.
food on the table
For each of the 26 million beneficiaries it’s a small amount that helps put food on the table.
Many state functions have collapsed over the last decade. But the social grant payment system, with glitches, has largely worked – every single month since the advent of democracy. Thank goodness, because it’s the one government system that must not fail.
It is hard to think of a higher priority for President Cyril Ramaphosa’s government than to make sure the grant payment system works.
does not inspire confidence
Last week’s problems are troubling. This is the fourth system failure that we are aware of since the Postbank took over grant payments in October last year (See here, here, and here). No clear reason has been provided for the latest failure. All we are told is that it was a glitch. This does not inspire confidence.
According to a presentation by SASSA to Parliament in May 2023, this is how people receive their payments:
- SAPO/SASSA Card – 35% of beneficiaries
- Post Bank Card – 11% of beneficiaries
- Other Bank Cards (paid into accounts by Post Bank) – 52% of beneficiaries
- Post Office – less than 1% of beneficiaries
- Cash Paypoints – 1% of beneficiaries
SASSA and Postbank cardholders, almost half of the beneficiaries, were affected by this latest glitch. Though how many we don’t know.
This is what happened:
On Monday, pensioners reported they were unable to access their grants. On Wednesday, Postbank said the issue with ATMs was resolved but withdrawals through retailers were not resolved yet. However many beneficiaries trying to withdraw their grant money went from ATM to ATM. This then resulted in numerous reversal instructions at the banks, which further delayed payments. Some people are still trying to get their grant money on Monday morning.
From the start, Black Sash expressed scepticism about the Post Office’s capacity and infrastructure to pay grants. These concerns have been justified.
The social grant system helps reduce massive hunger. It likely prevents food riots and rebellion. It is hard to think of a higher priority for President Cyril Ramaphosa’s government than to make sure the grant payment system works.