Pensioners queue to collect their grants at a Sassa pay point in Jeppes Reef, Mpumalanga. File photo: SOWETAN/SANDILE NDLOVU
Pensioners queue to collect their grants at a Sassa pay point in Jeppes Reef, Mpumalanga. File photo: SOWETAN/SANDILE NDLOVU

South African banks have signed a memorandum of understanding with the South African Social Security Agency (Sassa) on finding ways to better distribute welfare payments.

Banks have identified 8.2-million existing beneficiary accounts, of which 2.6-million were used to pay grants of R3.04bn in April, the Banking Association of South Africa (Basa) said on Wednesday.

The agreement would assist in ensuring practical solutions were implemented using Sassa and banks’ infrastructure and resources, it said.

Business Day reported on Monday that the banks, Sassa and Treasury were determined to find a long-term solution, despite Sassa CEO Abraham Mahlangu’s concern recently expressed in a letter to Basa.

Basa said on Wednesday: "With our countrywide branch and ATM networks, and ongoing progress towards inclusive banking for all our citizens, SA’s banks are well positioned to assist in the payment of grants.

"It is foreseen that many more beneficiaries will start using their existing bank accounts for grant payments over the next few months."

SA is seeking a new distributor of social security payments that cost the government more than R150bn annually after the Constitutional Court ruled in 2014 that a contract awarded to Net1 UEPS Technologies was unconstitutional because correct processes were not followed.

However, Nets1 subsidiary CPS has continued to facilitate grant payments — to ensure grant recipients are not punished for government failings — while the Department of Social Development has repeatedly failed to meet court-ordered deadlines to ensure other means of paying grants.

Bloomberg, with staff writers

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