SASSA has partnered with First National Bank (FNB) to assist over 65 000 grant beneficiaries affected by the provisional liquidation of Ithala SOC Limited. This collaboration comes as a response to an urgent situation following the freezing of accounts held by Ithala, which has left vulnerable individuals without access to their social grants.
This article explores the reasons behind this development, what it means for affected beneficiaries, and the measures SASSA and FNB are taking to ensure continuity in social grant payments during this transitional period.
Understanding the Situation
Ithala SOC Limited, a banking entity that served as the financial institution for many grant beneficiaries, was placed under provisional liquidation after a court ruling by the Pietermaritzburg High Court.
This development has frozen the accounts of all clients banking with Ithala, including recipients of various grants such as:
- Old Age Grants
- COVID-19 Social Relief of Distress (SRD) Grants
- Child Support Grants
- Disability and Care Dependency Grants
- Foster Care Grants
The freezing of these accounts has created widespread uncertainty and hardship for affected individuals, many of whom rely entirely on their social grants for their livelihoods.
South African Social Security Agency and FNB: Emergency Measures
In a swift response to the crisis, the National Treasury, in collaboration with the Banking Association of South Africa (BASA), called on major banks to assist in resolving the situation. Out of the institutions approached, FNB stepped forward, agreeing to open new accounts to facilitate immediate payments to affected South African Social Security Agency clients.
Key Steps Taken by SASSA and FNB:
- Opening New Accounts: FNB has begun assisting beneficiaries by opening new accounts. This process is designed to be seamless and ensures access to funds within the shortest time possible.
- Account Activation: Beneficiaries can activate their new accounts and collect their bank cards from FNB branches starting from 28 January to 4 February 2025. Valid identification is required to complete this process.
- Rural Outreach: To accommodate beneficiaries in remote areas, SASSA and FNB are coordinating outreach programs to minimize travel inconvenience.
- Interim Measures for January Payments: SASSA has acknowledged that January payments for COVID-19 SRD beneficiaries may face delays. However, a special payment run has been planned to ensure these individuals receive their grants as soon as possible.
What Beneficiaries Need to Know
- Timeframe for Transition:
- Beneficiaries will be supported in transitioning to their preferred banks over the next three months.
- This ensures that grant recipients have adequate time to make an informed choice about their banking provider.
- Grant Access:
- Payments will continue uninterrupted for most grant types, excluding potential delays for SRD grants. Beneficiaries are encouraged to remain calm as SASSA works to resolve this.
- Areas Affected:
- The majority of Ithala clients are based in KwaZulu-Natal, with smaller groups in Mpumalanga, Eastern Cape, Gauteng, Free State, North West, and the Western Cape.
- SASSA’s Assurance:
- SASSA has emphasized that it is not promoting FNB as a permanent banking option but appreciates FNB’s willingness to step in during this crisis.
Related: #PayTheGrants Advocacy Group: South Africa Can Afford to Support SRD Grant Beneficiaries
How Beneficiaries Can Prepare
To ensure a smooth transition, South African Social Security Agency encourages beneficiaries to take the following steps:
- Prepare Identification Documents: Ensure you have a valid ID or other required documentation to collect your FNB bank card.
- Follow Updates from SASSA: Keep an eye on announcements from SASSA regarding outreach events in your area.
- Remain Patient: Transitioning 65,000 clients is a massive undertaking, but SASSA and FNB are committed to completing this within three months.
Related: ANC NEC Confirms SASSA SRD Grant is Temporary as New Social Interventions Are Planned
SASSA’s Message of Reassurance
SASSA recognizes the concerns of beneficiaries affected by the Ithala liquidation and urges them not to panic. The agency is working diligently with FNB and other stakeholders to ensure the continuity of grant payments, protecting the livelihoods of vulnerable South Africans.
This partnership demonstrates SASSA’s commitment to prioritizing the welfare of its clients, even during unexpected challenges. Beneficiaries are encouraged to cooperate with the outlined processes and seek assistance from SASSA or FNB representatives when necessary.