Big changes coming to social grants in South Africa

The South African Social Security Agency (SASSA) is embarking on a modernisation and digitisation programme that will see significant changes made to the country’s grant application process.

This programme will be partially funded from the termination of an agreement between SASSA and the Postbank.

This was revealed by the Department of Social Development (DSD) in a recent presentation to the Standing Committee on Appropriations on 16 September 2025.

In this presentation, the DSD explained that SASSA is currently embarking on a modernisation and digitisation programme aimed at improving the grant application process.

This programme will focus on achieving operational efficiency through, for example, the automation of grant reviews, automated means test verification, and the digitisation of beneficiary records.

The programme will also increase the integration of technology in grant administration through, for example, self-service kiosks installed at local offices and an electronic queue management system.

The DSD explained that these improvements will be funded, in part, through savings realised from the termination of an agreement between SASSA and the Postbank.

SASSA entered into a contractual relationship with the South African Post Office (SAPO) Master Service Agreement (MSA) in 2018 after the Constitutional Court ordered the government to terminate an unlawful Cash Paymaster Service (CPS) contract.

The court directed SASSA to assume full responsibility for social grant distribution, but the agency lacked the necessary infrastructure and expertise at the time. 

This led to a partnership with the Post Office to ensure grant payments are fulfilled while SASSA developed capacity.

However, the SAPO’s liquidation and business rescue proceedings in 2023 necessitated the closure of costly cash pay points and over-the-counter services, and the contract was ceded to Postbank.

Therefore, this partnership evolved into the Postbank arrangement under a Master Service Agreement (MSA). 

This agreement is expected to be terminated at the end of September 2025, with the DSD explaining that the resources that were allocated to the Postbank will now be used to roll out its digitisation programme.

Social grants

In the 2025/26 fiscal year, R248.8 billion has been appropriated for transfers to households for social assistance grants and social relief of distress.

This figure is set to decrease over the next two years, with R259.7 billion allocated for 2026/27 and R271.4 billion for 2027/28.

Statistics South Africa’s 2024 General Household Survey (GHS) revealed that reliance on government funding is growing. 

It found that in the Eastern Cape, Free State, Limpopo, Northern Cape, and Mpumalanga, more people received social grants than earned a salary in 2024.

In 2003, the proportion of individuals receiving social grants was 12.8%. That increased to 30.9% in 2019 and surged to 40.1% in 2024 due to the introduction of the special Covid-19 Social Relief of Distress grant.

The R350 SRD grant was initially introduced as a temporary relief measure for struggling households during the Covid-19 pandemic. However, it has been extended every year since and has been hiked to R370.

The government has floated the idea of using this grant as a basis to introduce a basic income grant in South Africa, although concrete plans are still lacking.

That means four of every 10 households in South Africa rely on social grants. Similarly, the percentage of households that received grants concurrently increased from 30.8% to 50.4%.

Grants were the second most important source of income after salaries. More than one-fifth (23.8%) of households indicated that grants were their primary source of income.

Grants were particularly important as a main source of income for households in the Eastern Cape (38.9%), the Northern Cape (34.4%), and Limpopo (33.8%).