Johannesburg - SA Social Security Agency (Sassa) CEO Pearl Bhengu says 5.7 million social grants beneficiaries will be paid directly from April 1.
These beneficiaries will be paid without the help of Cash Paymaster Services (CPS).
Bhengu said Sassa has implemented a pilot project that began in January through direct payments into commercial bank accounts – and that has gone well so far.
The CEO was speaking at a joint press briefing with SA Post Office (Sapo) where it was outlying the organisation’s state of readiness to distribute social grants from April 1.
The extension of the CPS contract was granted by the Constitutional Court last year, the deadline for this extension ends at the end of March.
Sassa has asked for a further extension of this contract for an extra six months because Sapo would be unable to take over cash payment services of social grants at the moment to about 2.5 million people – a service currently provided by CPS.
Bhengu said on Thursday that if the Constitutional Court does not allow for a further extension of the contract with CPS, the agency had a contingency plan in place involving the SA Reserve Bank (SARB).
She said Sassa has an account with the SARB and will use the account to make cash transfers to beneficiaries.
Social grant beneficiaries can currently choose between three methods of payment; cash payment, merchant or supermarkets and through personal bank accounts.
Sassa said it will use the next six months, if the Constitutional Court rules in its favour, to transition from CPS to Sapo.
Bhengu said card holders will be able to use their Sassa cards until the end of the year, and then new cards will be issued through the Post Office.
Sassa has also taken over the controversial funeral covers that where run by CPS, said Bhengu.
Sapo CEO Mark Barnes said Sapo would continue to meet with Sassa weekly to ensure a smooth transition.