The South African Post Office (SAPO), which is technically bankrupt, owes the Medipos medical aid scheme R700m for workers’ contributions, and is likely to be discontinued within the next 30 days – leaving 12 000 members and their families, some 22 000 people, without health cover.
Despite contributions being regularly deducted from employees’ salaries, no payments have been made to the medical aid since 2020.
SAPO’s net loss of R591m for the second quarter of the 2021/22 financial year, and its Post Bank debt of some R2.2bn means either government will extend yet another bailout – or seek out private investors.
A report presented to the Communications Portfolio Committee laid out the details of the 20/21 Post Office annual results, outlining the performance – or lack thereof – of the Post Office, and blaming most of the difficulties on the COVID-19 pandemic, leadership vacancies and various other issues.
SAPO’s cash flow position is dire: creditors, medical aid contributions, pension fund contributions and SARS obligations remain unpaid, and will continue not to be paid unless urgent financial assistance is provided.
Writing in PoliticsWeb, the DA’s shadow minister of communications Dianne Kohler Barnard said that the situation at the Post Office was “nothing new”.
In September last year, MedicalBrief reported that SAPO employees and pensioners had been warned by Medipos that it was cutting them off and they would have no medical aid from the following month because it was owed R602m in member contributions.
The Sunday Times reported at the time that in the letter sent to affected employees, the scheme’s principal officer, Thabisiwe Mlotshwa, said SAPO had not paid the contributions made by members over to the scheme for the past 15 months.
“On the odd occasion that we do receive some form of contribution it will only be partial payment. To date, a total of approximately R602m is owed by SAPO to Medipos, thus a significant portion of your contributions remains unpaid,” the letter said.
A week later, the Labour Court in Johannesburg ratified a “settlement” reached between trade union Solidarity and the SAPO and Medipos in the saga. This, noted Fin24, followed Solidarity’s urgent application in the Labour Court seeking an order compelling SAPO to pay the medical aid contributions that were in arrears to the tune of more than R600m.
“Not only did the Post Office violate its statutory and contractual obligations towards its employees, but it also posed a threat to the lives of its workers,” said Anton van der Bijl, head of legal matters at Solidarity. In a Pretoria News report, he added that some of their members suffered from serious chronic conditions such as cancer, and relied on their medical cover to access treatment and medication for those conditions.
Kohler Barnard said SAPO had, for a long time, “been engaging in what can only be seen to be fraudulent activities: last year’s overdue contributions totalling R600m has since risen drastically”.
Finding private investors was the only hope for the ailing SAPO, she wrote, as South African taxpayers “are under unprecidented financial hardship, and no bailout must be continanced”.
“How long will the COVID-19 excuse be used to justify incompetency?”.
SAPO has a net loss projected of R1.85bn, negative revenue growth, R440m of the capital investment budget is unspent, and nothing has been done to prevent wasteful or irregular expenditure. There is, she added, no evidence of any disciplinary steps against officials who incurred irregular expenditure or criminal charges being laid against those accused of theft and fraud.
PoliticsWeb article – SAPO owes its medical aid Medipos R700m – DKB (Open access)
See more from MedicalBrief archives:
Post Office medical aid settlement agreement reached, says Solidarity
Post Office workers and pensioners face loss of medical aid cover
Pharmacists concerned about Post Office's delivery of chronic meds