The South African Social Security Agency (SASSA) has warned grant recipients that changing bank accounts will not free them from loans or other debts.
In a statement, the agency said it knows that some recipients switch accounts because of existing financial obligations, including loans and debit orders. SASSA has also noticed recipients changing their payment methods and banking details more often.
Debt follows you to a new account
SASSA made its position clear. “Changing a bank account does not remove a beneficiary’s contractual obligations to a lender or other creditor,” the agency said.
Some recipients move their grants to a new account so lenders can’t collect debit orders on payday. The debt, however, remains. Lenders can still pursue repayment, and missed instalments can add penalties and damage a recipient’s credit record.
The agency urged recipients to “exercise caution when making financial decisions” and to understand their contractual obligations with financial institutions and service providers.
Talk to your bank instead
SASSA encourages recipients who are struggling with repayments to get proper financial advice and to deal directly with their financial institution instead of switching accounts.
Many lenders offer repayment arrangements for customers in financial difficulty. Contacting a lender early usually leads to a better outcome than avoiding the debt. Recipients who feel trapped by unaffordable loans can also get help from a registered debt counsellor.
Switching carries its own risks
Changing accounts can also backfire on the grant itself. SASSA warned that frequent changes to banking details can put grant payments at risk and cause avoidable delays.
Recipients who change accounts close to SASSA’s payment processing dates may miss the cut-off for the next cycle, so their grant arrives later than expected. Errors in banking details, or new accounts that the bank has not fully activated and verified, can lead to payments being rejected and returned.
The recipient then has no grant until the problem is fixed, and the original debt still stands.
SASSA said it remains committed to protecting the integrity of the social grants system and to paying the right grants only to eligible beneficiaries.
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