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The payment of social subsidies will not be affected by the financial problems of the South African Post Office, the parastatal has promised.
Misha Jordaan, Gallo Images
- South Africa Post has assured Sassa recipients that welfare payments will continue as usual.
- The post office has approached the Postbank subsidiary for 1 billion rand so that it can process the social grants.
- The state company could face a restructuring after suffering heavy losses during the national shutdown.
The payment of social subsidies will not be affected by the financial problems of the South African Post Office, the parastatal has promised.
This despite the fact that the Post Office approached the Postbank subsidiary for 1 billion rand to allow it to process the social grants.
In a statement, the SA Post Office has assured the beneficiaries of Sassa that “the payment of social subsidies will continue normally and will not be affected by the current financial restrictions experienced by the Post Office.”
By the end of May, the post office had recorded an estimated loss of 800 million rand in revenue due to the nationwide shutdown. In a parliamentary briefing, the administration and the Post Office board estimated that the parastatal could experience more than R1.9 billion in losses during the year.
Since then, the Post Office has requested additional financial support of R4.9 billion and the Treasury has described this as an “urgent need for restructuring and repurposing” to avoid collapse.
“The SA post office experienced a dramatic reduction in revenue during the lockdown period and is currently looking for ways to improve cash flows,” the statement continued.
‘Sold out reserves’
However, this will not affect Sassa beneficiaries as the funds for the social grants come from the National Treasury through the Department of Social Development and not from the Post Office, the statement said.
On Sunday, City Press reported that the post office had contacted its own subsidiary, Postbank, for 1 billion rand to be able to process social grants before next week’s payments.
When the Post Office replaced Net1’s Cash Paymaster Services as the main distributor of social grants, Postbank pre-financed payments and was reimbursed four days later. This was to prevent the money from being paid up front, deposited in the bank, and Net1 keeping the accrued interest.
Since the corporate separation of Postbank and Post Office, the parastatal has relied on its own reserves for pre-financing, something that is no longer possible with the Post Office’s “depleted reserves”.
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