File image: IOL.
CAPE TOWN - South African Post Office (SAPO) CEO, Mark Barnes says government's new hybrid model for the payment of social grants will cost the same as the current deal with Cash Paymaster Services (CPS).

This comes after the interministerial committee on social security, chaired by Minister in the Presidency, Jeff Radebe, announced on Sunday that a "landmark" deal has been signed with SAPO.

"The cost to government is pretty much the same as it was before and is within the approved National Treasury budget for this service", Barnes said at the press conference.

"The way it is worked out is to take the total cost over the 5 years and divide that per year, so you have a flat rate for the period".

According to a local media house, they allege that they have seen the signed deal with the Post Office. The deal will allegedly cost R2.2 bn per year, an equivalent to the CPS deal.

Cash Paymaster Services

The IMC was led by Radebe's department of planning and monitoring and evaluation (DPME).

According to DPME director general Mpumi Mpofu, CPS will have no part to play in the cash payment portion of the scheme under current terms beyond the deadline.

Beneficiary data

There are four key channels by which grants will be paid through:

- direct payments into commercial bank accounts for 2 million beneficiaries

- payments into new or existing Post Office bank accounts

- payments through merchants in large, retail shops

- payments at second tier vendors, such as (legally-recognised) Spaza shops, general dealers, village banks and small retailers.