SA Post Office to stop paying social grants

John Maytham interviews financial journalist Ray Mahlaka.

The South African Post Office (SAPO) will no longer be responsible for paying social grants to beneficiaries as it cedes this function to the SA Postbank as part of its restructuring plan.

This restructuring plan is aimed at rehabilitating the financially distressed SA Post Office, which has been under business rescue since July.

The SA Post Office’s revenue from disbursing social grants dropped from R798 million to R318 million since taking it over from Cash Paymaster Services.

In 2024, revenue is expected to fall even further to R48 million for the first six months.

Unfortunately, 6000 jobs are on the line and 600 branches across the country will be shutting down as SAPO seeks a R3.8 billion bailout from the government.

Creditors of the SA Post Office will vote on the business rescue plan on 7 December.

Should they vote against the rescue plan, the Post Office could face liquidation and permanent closure.

South African Post Office / Wikimedia Commons: Leo za1

The Post Office is still involved in a crucial function, and that is processing and dispersing social grants.

Ray Mahlaka, business and financial journalist

Scroll up to listen to the full interview.