COSATU slams SASSA's termination with Postbank, raising concerns over bank fees for social grant recipients
Trade union federation COSATU has criticised SASSA’s decision to end its service agreement with Postbank
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Trade union federation COSATU has criticised SASSA’s decision to end its service agreement with Postbank, warning that millions of social grant recipients could now face bank charges from commercial banks
The agency confirmed earlier this year that it had terminated its contract with Postbank, citing that the agreement no longer served its original purpose.
The move has sparked fears among beneficiaries and critics who worry about the potential negative impact on vulnerable recipients. However, Minister of Social Development Sisisi Tolashe assured that the termination of the Master Service Agreement (MSA) with Postbank will not interrupt the payment of social grants.
In a statement issued to the media on Wednesday, the trade union slammed the decision, describing it as a threat to the financial security of millions of poor South Africans who could be burdened by costly banking fees.
"This bewildering move will see affected social grant recipients charged R10 per R1000 withdrawal whilst the Postbank is reported not to deduct such fees,". Mathew Parks, Cosatu's Parliamentary Coordinator, said.
"When social grant recipients receive so little and the cost of living is continuously rising, they should be protected from fee deductions to fund the profit margins of private banks. SASSA needs to negotiate with all bank providers to waive such fees for social grant recipients".
Parks added that the decision undermines government efforts to support the Postbank as a state-owned financial institution designed to serve the most marginalised communities.
"If the Postbank is to be placed on a sustainable path and to fulfil its legislative mandate, then government, in particular SASSA, needs to provide it the space and support to do so".
"Similarly, when 27 million social grant recipients are struggling to make ends meet, then they should be protected from being fleeced of their little funds by banks and their overpaid CEOs".
Earlier this week, SASSA dismissed reports suggesting it was favouring commercial banks or that social grant payments would be disrupted.
"This doesn’t mean that we are taking our beneficiaries away from Postbank, they will continue if they are happy with the service”, CEO Themba Matlou said.
"In addition, social grants beneficiaries should be treated equally; therefore, it would be discriminatory if SASSA were to continue paying for bank charges for only the social grants beneficiaries who are clients of Postbank, whilst those banking with other banks must fend for themselves"
Matlou also noted that many beneficiaries have already chosen private banks to receive their grants and argued that continuing to subsidise bank charges exclusively for Postbank users would be unfair and discriminatory to those banking elsewhere.
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