Thousands of South African grant beneficiaries are reportedly losing money due to bank charges and unauthorised deductions on their social grant payments.
This concern was recently raised in Parliament, where lawmakers criticised both financial institutions and government agencies for failing to protect the country’s most vulnerable citizens.
As the cost of living continues to rise, these deductions are placing additional strain on individuals who rely on monthly grants for basic needs. In this article, we break down Parliament’s warning, the role of banks, the impact on recipients, and the steps being taken to fix the issue.
What Parliament Said About Bank Charges
During a recent parliamentary session, officials raised concerns over excessive deductions and banking service charges applied to SASSA grant accounts. The Portfolio Committee on Social Development criticised the lack of oversight and urged the Department of Social Development (DSD) and the South African Social Security Agency (SASSA) to intervene.
Lawmakers demanded clarity on:
- Why recipients are being charged for basic transactions.
- The absence of fee-free banking options for grant recipients.
- Potential violations of consumer protection laws.
According to Parliament, “the system is failing the poor,” and urgent reforms are needed.
How Grant Beneficiaries Are Affected
Grant recipients, particularly those receiving Child Support Grants, Old Age Pensions, Disability Grants, and the R350 SRD Grant, are seeing their limited funds depleted due to:
- Monthly maintenance fees
- ATM withdrawal fees
- Unexplained debit orders or airtime deductions
Many beneficiaries reported receiving R350 only to find R30–R50 missing due to various charges. For low-income households, these small amounts make a significant difference in their daily survival.
Role of Banks and SASSA
The SASSA grant distribution system relies on partnerships with banks like Capitec, Nedbank, Absa, FNB, and Postbank. While these banks facilitate electronic disbursement, they also impose charges that eat into grant funds.
| Bank Name | Common Charges | Fee-Free Option |
|---|---|---|
| Postbank | Minimal fees | Yes |
| Capitec | R7–R10/withdrawal | Limited |
| FNB | Account fees apply | No |
The lack of a national fee-free account for social grant recipients means banks continue to profit from vulnerable groups. Parliament also questioned whether SASSA is enforcing its agreements to protect recipients from such charges.
Real-Life Examples of Deductions
Across the country, complaints have surfaced about:
- Deducted airtime purchases
- Loan repayments tied to grant accounts
- Hidden bank service charges
Some grant recipients unknowingly give debit order permission to service providers. In many cases, they do not understand what they are signing or clicking on—especially when using mobile devices or informal agents.
Government’s Proposed Actions
In response to Parliament’s warning, several actions have been proposed:
- Zero-fee bank accounts for all grant recipients
- Postbank-only grant system to avoid private bank charges
- Improved regulation of digital financial services
- Public awareness campaigns to help users identify and stop unauthorised deductions
The National Treasury and South African Reserve Bank may also intervene to regulate fees tied to social grants.
What Can Beneficiaries Do?
To avoid losing money to bank charges or scams, beneficiaries are encouraged to take the following steps:
Tips to Protect Your Grant:
- Use Postbank Gold Cards, which offer fewer charges
- Do not give PINs or IDs to agents or strangers
- Check your balance and transaction history regularly
- Report suspicious deductions immediately to SASSA
Where to Report:
- SASSA Hotline: 0800 60 10 11
- Visit the nearest SASSA office or Post Office
- Send complaints to the National Consumer Commission
Frequently Asked Questions (FAQs)
Why are bank fees deducted from my grant?
Most banks apply standard charges for withdrawals and account usage, even on grant accounts, unless a fee-free arrangement is in place.
Can I stop the deductions?
Yes. You can switch to a Postbank card or request SASSA to block unauthorised debit orders.
What is Parliament doing about this?
Parliament is urging stronger regulation, better banking agreements, and a full shift to zero-fee accounts.
Can I change my bank account for grants?
Yes. You can visit a SASSA office and request a bank change form to switch to a fee-free account like Postbank.
Conclusion
As Parliament raises the alarm, it becomes increasingly clear that bank charges are undermining the purpose of social grants. These payments are meant to uplift, not burden, South Africa’s poorest. If government, banks, and SASSA collaborate effectively, millions of grant beneficiaries can finally receive the full support they deserve. Until then, staying informed and cautious is the best defence.
