Progress Report on the Implementation of the Constitutional

Progress Report on the Implementation of the Constitutional

Progress Report on the Implementation of the Constitutional Court Order Briefing to the Portfolio Committee 15 August 2018 Purpose The purpose of this presentation is to brief the Portfolio Committee of Social Development on Progress achieved with the payment of social grants (April August 2018) Payment challenges experienced and remedial actions Progress on migration of beneficiaries from CPS Payment plans beyond September 2018 2 PAYMENTS FROM APRIL TO AUGUST 2018 SUMMARY OF PAYMENTS FROM APRIL TO AUGUST 2018 Payment channel April May No. of beneficiaries June July August

Biometric CVM payments (CPS) 3 160 832 3 110 333 1 950 249 1 637 975 1 098 669 ACB Direct transfers SASSA/ Grindrod Bank (Bilateral processing old SASSA cards ) Total 2 348 107 3 531 734 8 928 107 9 236 945 9 795 132 5 342 376

4 221 999 0 0 0 10 851 315 10 864 066 10 878 356 10 874 920 10 893 801 4 Payments to Beneficiaries Receiving Social Grants Through CPS The total number of beneficiaries that are paid by CPS in August is 1,098,669. SASSA managed to successfully reduce the number of beneficiaries paid by CPS by 2,062,163 from April 2018 (3 160 832) to August 2018 1,098,669. Since the issuance of the August pay-file, card swap continued and the number of cash beneficiaries was further reduced by approximately 196, 802 to 811 009 by 6 August 2018. The number continue to be reduced on daily basis through the daily card swap and, this net effect will only be reflected in the September payment file. CPS Payment extraction (April - August 2018) Region April 2018 May 2018

June 2018 July 2018 August 2018 EC 494,869 482,713 288,629 242,530 158,477 FS GP 215,045 384,760 211,112 380,905 148,426 189,767 128,037 153,918 85,325 109,399

KZN 695,883 683,528 427,901 376,822 260,382 LP 573,292 567,771 440,595 367,412 247,043 287,473 79,467 227,951 202,092 3,160,832 284,227 76,871 223,535 199,671 3,110,333

191,737 43,231 145,229 74,734 1,950,249 155,562 34,702 122,974 56,018 1,637,975 100,406 23,148 83,407 31,082 1,098,669 MP NC NW WC Total Progress on Direct Transfers to Commercial Bank Accounts There has been a general increase in the number of beneficiaries choosing to be paid in their own bank accounts. Following the provision of information related to the payment options available to beneficiaries, SASSA received numerous requests for grant payments into personal bank accounts.

The August payment file included 9,795,132 beneficiaries who were to receive their grant payments at different banks. The number of beneficiaries paid through other commercial bank accounts excluding Grindrod and SAPO is approximately 1 663 083 in August 2018. Progress on Direct Transfers to Commercial Bank Accounts Payments to Grindrod (including old SASSA Cards) Of the 9.7 million ACB beneficiaries, 5,589,506 beneficiaries were paid through Grindrod Bank. This include beneficiaries who are still using the old SASSA card in the NPS. The number of beneficiaries using Grindrod bank accounts reduced by approximately 2,124,937 between June and August 2018. This decrease is largely due to card swap /migration of beneficiaries from the old SASSA card to the new SASSA/SAPO card. There were no major reported challenges with the payment of beneficiaries receiving grants through commercial bank accounts including the old SASSA card, except for those using the new SASSA/ SAPO card. ACB Payment Extractions Banks Months

201802 201803 201804 201805 201806 201807 201808 ABSA BANK 29,680 56,667 88,180 119,007 165,646 211,358 249,934 AFRICAN BANK (Ubank) 97 419 1,047 2,583 5,800 9,225 12,023 ALBARAKA BANK 23 36 43 58 70 89 118 BANK OF ATHENS 90 596 1,419 2,637 3,534 5,069 6,447 BANK WINDHOEK 154 152 152 154 153

154 153 BIDVEST BANK 105 463 1,755 3,403 5,138 7,196 9,932 CAPITEC BANK 24,494 67,413 124,280 189,616 301,158 421,107 532,078 FINBOND MUTUAL 15 4,107 10,067 14,776 20,600 24,947 31,710 FIRSTRAND BANK 21,702 47,013 93,149 137,309 200,812 271,464 332,285 GRINDROD BANK 1,860,488 1,923,941 1,877,392 2,802,095 7,714,443 6,970,925 5,589,506 HBZ BANK 1 4 6 8 HSBC BANK 4 4 2

2 3 INVESTEC BANK 3 5 5 5 5 8 13 ITHALA KZN FIN&INV (ITH 123 338 1,447 3,521 1 7,550 2 10,850 9 13,710 ACB Payment Extractions Banks MERCANTILE BANK NBS NEDBANK


6 1 1 12 12 12 83,164 136,306 203,661 39 38 38 201803 49 58 201804 73 57 1 13 30,319 40 2 7,327 1 12 54,310 39 31,448 83,448 1 233,215

1 38,120 1 144 63,018 1 208 89,519 1 225 133,186 1 250 1 201808 184 55 3 12 263,363 38 936,680 2,542,543 1 3 174,557 210,925 1 1 58

189 80 1 3 1 1 1,969,246 2,177,224 2,348,107 3,531,734 8,928,107 9,247,753 9,795,132 10 PROGRESS ON PAYMENTS BY SAPO THROUGH POSTBANK There were 936 680 beneficiaries in July who were to be paid through PostBank using both the SAPO Mzanzi accounts and the new SASSA/SAPO account holders. The number of beneficiaries paid through the PostBank increased to 2 542 543 in August 2018. The increase is due to intensified card swap programme aimed at migrating beneficiaries from the CPS payment platform to the new SASSA/SAPO card. SAPO/PostBank beneficiaries Month No of beneficiaries April 31,448 May 83,448 June 233,215 July 936,680 August 2 542 543 July payments challenges and Remedial actions

There were payment challenges that were experienced during the first week of the July payment cycle affecting most of the 700 000 beneficiaries using the new SASSA/SAPO card In terms of the Bankserv report the transaction success rate for the new SASSA/SAPO card was at 25% and 50% for ATMs and POS respectively, on 30 June 2018 due to challenges in the system. Payment challenges affecting over 700 000 beneficiaries using the new SASSA/SAPO card. The root cause mostly related to the inability of the SAPO systems to process real-time large volumes of transactions generated by the SASSA beneficiaries transacting on the NPS. Major issues identified were as follows: Late processing of the payment file by SAPO. Failed transactions errors linked to transaction timeouts. Connectivity and capacity of payment link between SAPO and Bankserv Africa. Over the counter (OTC) limit of R1,600 forcing some beneficiaries to perform multiple transactions to withdrawn their full grant 12 July payments challenges and Remedial actions

To address the challenges in preparation for the August pay run which was scheduled for 31 July through to the end of August 2018 payment cycle, SASSA, SAPO, Telkom/BCX, and SITA worked in collaboration with industry partners, such as Bankserv, PASA to : Upgrade and migrate the Integrated Grants payment System (IGPS) system to the Telkom enterprise hosted environment. (The current IGPS environment at SAPO Data centre will stay and serve as an Interim backup/ Failover environment). Better server host capacity as well as high availability on the server level resulted in improved capacity which provide capabilities for the IGPS system to process up to 200 transaction per second at peak time from the previous 15 TPS. Connectivity with Bankserv has been improved by replacing the Copper Diginet lines with high volume high speed Fibre dedicated links which can scale on demand. This addresses issues of slow response and throughput. New upgraded links were used for connectivity for the end user devices. The splitting of the card issuing function from the transaction processing function on the IGPS system was completed on 12 July 2018. The splitting will allow for better load balancing between the two processes. 13 Further Remedial actions Subsequent to the implemented interventions, by 06 July 2018, the situation had improved and the transaction success rate was 99% for both ATMs and POS. Mid-month report was submitted to CC on 12 July 2018, to report the challenges and remedial action The IMC held a press conference to brief the public about progress regarding the transition and to apologise for the inconvenience caused by challenges experienced during the July payment run.

Furthermore, the Minister, the Acting CEO of SASSA, and the CEO of SAPO, have been on various news media to allay beneficiary fears. Workshop was held with payment industry: banking sector under the auspices of the Banking Association of South Africa (BASA) and the retail sector under the auspices of the consumer goods council of South Africa (CGCSA). 14 August Payments CPS is paying 1,098,669 at all cash paypoints (8000) except for 1000 that have been decommissioned 7,252,589 received payments using own bank account This include approximately 3 million beneficiaries who are still using the old SASSA card in the NPS system 2,542,543 beneficiaries payments were deposited through the Post Bank accounts cards SAPO will also pilot the cash payment solution at 18 sites across the country involving 4201 beneficiaries

15 Plans to support payments : August SASSA activated staff to support payments Presence at every decommissioned pay point to redirect any beneficiaries who may arrive Presence at post offices, major merchants and ATMs to support, respond to questions and assist beneficiaries Help desk at cash pay points still serviced by CPS Card swap desks at existing cash pay points to ensure balance are issued with new cards Roving teams to move to smaller pay points for monitoring Dignity interventions on demand where queues are not moving 16 New SASSA Card August Payment Transactions July/ POS POS Value ATM Txns Augus Txns t 30-Jul 15,483 R8,471,506.17 53,585 31-Jul 99,203 R68,604,096.77 245,532 1-Aug 408,911 R384,928,377.20 557,115 2-Aug 224,820 R187,279,523.78 283,484 3-Aug 139,377 R103,020,563.82 170,955 4-Aug 91,932 R59,108,963.09 109,377 5-Aug 33,858 R16,406,378.32 38,526 6-Aug 71,976 R47,124,324.08 86,560

7-Aug 53,459 R31,410,266.06 62,231 ATM Value R49,330,880.00 R254,015,030.00 R580,598,114.00 R262,539,149.00 R150,806,770.00 85,664,894.00 R24,217,649.00 R73,128,934.00 R50,173,820.00 Branch Branch Value Grand (OTC) Total Txns Txns 1790 R2,228,580 70,858 15455 R20,327,900 360,190 67,826 R93,258,260 1,033,852 48,313 R63,209,030.00 556,617 36,617 R46,851,480.00 346,949 9,464 R10,831,290.00 210,773 13 R10,780.00 72,397 22,586 R28,678,380.00 181,122 15,252 R19,217,260.00 130,942 Grand Total Value R60,030,966.17 R342,947,026.77 1,058,784,751.20

513,027,702.78 300,678,813.82 155,605,147.09 40,634,807.32 148,931,638.08 R100,801,346.06 Summary of August Payment challenges Generally there were no major challenges during the first week of August. There were however a number of incidences relating to: IGPS - The majority of challenges received related to the IGPS system being slow in the morning hours. Late arrival of Cash - The late arrival of CIT affected some of the Post Office Outlets. Decommissioned pay points A number of reports were received of beneficiaries arriving at decommissioned pay points and CPS paying beneficiaries. SASSA officials were not allowed into the halls PIN resets: In a number of Regions beneficiaries had challenges with regard to PIN resets (both old SASSA card and new) as Information on the location of PIN reset sites was not easily accessible or available at local or national level. Deductions, beneficiaries receiving less than their grant. SAPO and SASSA are investigating the cases and Bankserv has been requested to assist Limited services Post Office outlets not all SAPO outlets were paying or doing card swap - In most cases this was as a result of the system being down/ offline or no money having being delivered to the Post Office. CASH PAYMENTS PLANS: AUGUST 2018 Cash Payment file reductions Province Since mid-May 2018, SASSA and SAPO Cash Beneficiaries

have been swapping social grants August Pay- Balance of Cash File beneficiaries CPS/Grindrod cards for the file as at 06 August 2018 SASSA/SAPO card. (23/07/18) As of 07 August 2018, at least 3,683,078 Eastern Cape Free State Gauteng Kwazulu Natal Limpopo Mpumalanga Northern Cape 158,477 85,325 109,399 260,382 247,043 100,406 23,148 118,218 beneficiaries had been transferred from old 57,960 SASSA card to the new SASSA/SAPO card. 89,412 188,005 The card swap process has reduced the total 169,540 number of cash recipients of social grants, for

77,439 whom the Constitutional Court made a ruling 18,858 on from approximately 3.1 m to 811 009 as of Northwest Western Cape Grand Total 83,407 31,082 1,098,669 67,939 23,638 The plan is to finalise the migration of 811,009 remaining cash beneficiaries in August and 6 August 2018. September 2018 Interventions for cash beneficiaries in remote areas Interventions to service the residual number of beneficiaries in difficult to reach rural areas: SAPO will utilise its point of sale solution supported by CIT and guarding services to pay beneficiaries at the remaining pay-point The solution is piloted at 18 sites during the August cycle (8 NW; 2 EC and KZN, 1 for each of the remaining provinces) 60% of cash beneficiaries at the residual sites will be migrated to SAPO in August in preparation for payment at those pay points from September 2018 All remaining cash beneficiaries in will be migrated in September and paid from October

Continuous interaction with Retailers & Banks to included their infrastructure as alternative channels Transport plan is also being finalised to support the SAPO strategy Pilot Sites paid by SAPO in August 2018 Payment Date 1-Aug-18 1-Aug-18 2-Aug-18 2-Aug-18 2-Aug-18 2-Aug-18 2-Aug-18 3-Aug-18 3-Aug-18 3-Aug-18 7-Aug-18 14-Aug-18 14-Aug-18 14-Aug-18 14-Aug-18 15-Aug-18 15-Aug-18 16-Aug-18 16-Aug-18 17-Aug-18 Province North West

Gauteng North West North West North West North West KZN North West North West North West Mpumalanga Eastern Cape Northern Cape Paypoint name Molatedi - Mabeskraal Poortjie Sebokeng Post Office Tshidilamolomo Matloding Moshawane Logageng Thafamazi Mamerotse Tantanana Serutube Platrand, Lekwa local office, Gert Sibande Mtonjeni Caf Elliotdale Camden Shakadza A Northern Limpopo, Mutale Limpopo Shakadza B Northern Limpopo, Eastern Cape Gcwagcwini A/A , Idutywa Western Cape Agter Witzenberg (Worcester district) Free State Verkeerdevlei, Welkom office Northern Cape Maphinick

KZN Bangizwe, Mbazwana local office (Deep rural) Number of Beneficiaries 285 392 245 495 279 560 152 122 254 60 148 200 434 102 135 44 267 237 142 174 Plan to support pilot sites Staff deployed to support Socpen enquiries available Beneficiaries with SASSA/SAPO card direct to pay station Manual payments off card but using biometrics Beneficiaries with old SASSA card directed to card swap and then transported to cash payment site in vicinity Beneficiaries informed of payment options for next

months 23 Progress report on the work of the Panel of Experts and its budget allocation The Constitutional Court appointed the Auditor-General of South Africa and 10 independent legal and technical experts to evaluate SASSAs implementation of the Courts orders of 17 March 2017 and 23 March 2018 respectively. The Court directed that SASSA would be responsible for the reasonable remuneration of the Panel. The panel of experts reports to the Constitutional Court in accordance with paragraphs 8 of the Court order dated 23 March 2018. The panel of experts have so far released 7 reports SASSA engages with the panel of experts monthly. In July, following the payment challenges experienced by beneficiaries using the new SASSA Card, the Panel invited both SASSA and SAPO to a workshop to deliberate on issues and the measures implemented. Progress report on the work of the Panel of Experts and its budget allocation SASSA also ensures that matters raised in the Panels reports are

addressed in the monthly reports to Court. Budget and Expenditure: In 2018/19 it is estimated that the panel will work an average of 35hrs per expert per month translating into a total hours of 2,423hrs.The table below shoes budget and spending. Financial Year 2017/18 2018/19 Total Budget Actual Expenditure (R'000) (R'000) 8,000 6,559 5,000 3,250 13,000 9,809 RISKS AND MITIGATION RISKS RISKS/ ISSUES MITIGATION Failure to swop all Focus all efforts to swop cash cash beneficiaries beneficiary during August 2018. by 30 September 2018. Robust communication to encourage beneficiaries to go to swop their cards.

PROGRESS Card swop process has been extended to take place over weekends. Labour disputes and strikes The use of PIN in the NPS might be a challenge for older persons and people with disabilities. Recruitment process Engage with Labour through existing government structures utilise Auxiliary Social Workers (ASW) to conduct home visits and advise families on the option of using procurators for the frail and people with disabilities and assist them with the application process. Conduct door-to-door to identify those who require home visits. Process to recruit Auxiliary Social workers being undertaken (7/08/2018) 27 RISKS RISKS/ ISSUES

Insufficient cash at retailers to respond to the demands of the beneficiaries. MITIGATION PROGRESS Information on beneficiary numbers Communication and per pay point to be shared with information sharing with retailers and banks. banks is on-going Migration of beneficiaries to The SAPS to provide support by SAPO outlets, banks and increasing visibility around merchants may increase the risk merchants and banks during the of robberies, including robberies payment period. of retailers and merchants. Engagement with NATJOC is on-going and a security plan will be jointly developed between SASSA, SAPO and NATJOC. Migration of beneficiaries from a SASSA is considering the pay point to either a SAPO outlet possibility of staggering payments or alternative electronic to ensure that beneficiaries do not payment infrastructure could all receive their grants on the same result in overcrowding at these day. facilities. This will be done in consultations with beneficiaries

28 Recommendation It is recommended that the Portfolio Committee of Social Development note and support Progress achieved with the payment of social grants (April August 2018) Payment Challenges experienced and remedial actions Progress on migration of beneficiaries from CPS Payment plans beyond September 2018 29 Thank you 30

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