Potential Disruption to SASSA Grant Distribution by South African Post Office. Concerns arise as Business Rescue Practitioners consider halting the distribution of social grants through the South African Post Office (SAPO), impacting millions dependent on its branches for SASSA grant collections.
Financial Struggles at South African Post Office (SAPO)
SAPO’s financial crisis prompts the consideration of discontinuing social grant distribution. Since 2022, costs have consistently surpassed revenue by over 200%, with employee costs alone reaching 150% of revenue, necessitating urgent restructuring.
Urgent Business Rescue Measures
With SAPO’s financial distress preventing timely financial obligations, Business Rescue Practitioners (BRPs) were appointed on July 10, 2023. Their proposed plan includes a reduction of around 6,000 employees and the elimination of unproductive revenue streams, including SASSA and cash pay points (‘CPP’) payments.
Potential Impact on Social Grant Payments
Adopting the Business Rescue Plan may eliminate social grant payments at SAPO, a matter to be decided through a creditor vote on December 7, 2023, requiring a 75% majority as per the Companies Act, 2008.
SASSA Grant Beneficiaries at Risk
Over 18 million SASSA grant beneficiaries, relying on SAPO branches, face the prospect of seeking alternative sources for their monthly grant payments if the plan is adopted.
Exploring Alternative Grant Collection Methods
In light of potential disruptions, SASSA offers alternative distribution methods, including direct deposits into bank accounts. Retail outlets such as Pick n Pay, Shoprite, Boxer, Usave, and Checkers also serve as alternative grant distribution points.
Mobile Cash Pay Points as an Option
For added flexibility, mobile cash pay points present an option, allowing fund collection during specific hours in the payment cycle. Grant beneficiaries are encouraged to explore these alternatives to ensure continued access to their funds.