Unintended Consequences Of Changes To Pension Delivery Amidst COVID19: The Case Of South Africa

Author: Gabrielle Kelly, Samson Institute for Ageing Research, South Africa.


(This blog is linked to a Global Platform webinar on Pensions, Social Protection and Older People which ran on 15 May 2020).


In the context of the COVID-19 pandemic, it is critical that social assistance reaches older persons in need of financial support to address their particular risks and vulnerabilities. Given the high risk older persons face in terms of COVID-19 morbidity and mortality, governments in low and middle-income countries that provide cash transfers to older persons as part of their social protection strategies have had to rapidly implement measures to mitigate infection risk at pay points. With colleagues, I helped to develop guidance for safe pension delivery and collection which was published by HelpAge International here.

These measures have ranged from home delivery of pensions to the appointment of proxies and the implementation of hygiene protocols. Implementing rapid and widescale changes such as these in a context of such uncertainty is challenging and, as with other aspects of the pandemic, learning from the experiences of other countries is vital.

South Africa provides a good example of the importance of considering the unintended consequences of new policies when developing strategies to protect vulnerable populations such as older persons. While good in theory, efforts to stagger pension payments may, in fact, have increased risk of infection in some areas.



South Africa has one of the largest and most generous social pension systems among low and middle-income countries. The South African Social Assistance Agency (SASSA) pays non-contributory, means-tested Old Age Grants to around 3.6 million people monthly – approximately 70% of the population of older persons. These are valued at R1860 (US$100) per month (R1880 if over 80) and have been increased by R250 (US$14) from May to October as part of the government’s response to the devastating economic effects of a very strict COVID-19 social and economic lockdown.

Every month over 18.6 million grants are collected by 11.3 million people from heavily congested pay points, putting older persons collecting their pensions at risk of COVID-19 exposure. The government has put hygiene and social distancing measures in place at South African Post Office and the SASSA mobile cash points that still operate in rural areas, but 95% of payments are typically collected either at ATMs or merchant retailers where the government has to rely on third-parties to implement appropriate measures.

To protect vulnerable groups, a decision was made to allow older persons and people with disabilities (PWDs) to collect their social grants earlier than other categories of social grant recipients. However, this has failed for the past two payment cycles for the following reasons:

  • For April payments, payments to older people and people with disabilities were made a day earlier (30 March). However, money was still transferred into the accounts of Child Support Grant beneficiaries on the same day, making it very difficult to keep these beneficiaries away from collection points. This resulted in older persons being pushed and shoved out of the way by younger people desperate to receive their grants in a context where many households were starting to feel the effects of the lockdown.

  • In May, SASSA attempted to solve the problems experienced the previous month by separating out the payment files so that older persons and PWDs could be paid on separate days. A decision was also made to delay payments to the 3rd and 4thday of each month or the first working day after this date, presumably to keep grant beneficiaries away from the other end of month shoppers. Payments to Child Support Grant beneficiaries started two days later and payments at SASSA cash pay points started two days after that (including to older persons). The delayed payment dates meant that between April and May older persons were forced to wait five days longer than usual to receive desperately needed income that is generally spent within the first few days of the month. Tight deadlines and a shortage of SASSA administrative staff to separate out the payment files also resulted in errors in some provinces, with some people receiving their grants twice while others received nothing. This resulted in mass confusion and long queues.

Another challenge was the delay of payments at SASSA pay points which operate exclusively in rural areas where the South Africa Post Office, retail merchants and ATM services are not available. In April and May payments at these sites only began on the 3rd and the 7th days of those respective months. Unwilling to wait to receive their cash, older people from rural areas flooded into towns and cities, forcing them to spend their scarce resources on transport into areas where rates of transmission were likely higher and creating congestion at already busy payment locations. Compounded by payment glitches, this resulted in long snaking lines of several kilometres in many areas. Numerous media reports from across the country showed older people sleeping in lines overnight, with several deaths due to long waits without food or water also reported. Although efforts to ensure social distancing and hand sanitising were made at many sites, crowd control becomes increasingly difficult when people are congregating in very large numbers over long periods of time.


De-congesting pay points via electronic means provide the most promising solution for containing the spread of the virus. For several years, SASSA has been encouraging people not to draw their money all at once and rather use their SASSA cards as a debit card throughout the month. Although heavily promoted over the past few months, take-up of this suggestion appears to have been low, possibly because of a lack of trust. Mobile money transfers present another possible option and are being used for paying the COVID-19 Social Relief of Distress Grant. However, mobile transfers may not be very accessible or easy to use for many older persons. Another new initiative that may help to de-congest payment points is the South African Post Office’s recent roll-out of 10,000 cashless ATMs to serve as additional social grant pay points. To use these machines beneficiaries will select an amount to be debited from their SASSA card and the cashless ATM will print out two slips, one to hand over to the over a spaza shop (an informal convenience shop operated usually from a home), and in exchange, the merchant will give the customer cash or goods to the value of the withdrawal. Beneficiaries will also be able to use cashless ATMs to purchase pre-paid electricity and airtime, and pay bills.

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