“We have failed” admits SASSA

CPS to run grant payment system for another year

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Photo of social grant recipients in a queue
Social grant recipients queue for their grants in Parow on Wednesday. Photo: Tariro Washinyira

The South African Social Security Agency (SASSA) is to apply to the Constitutional Court to extend the grant payments contract of Cash Paymaster Services (CPS) for another year.

The announcement by the agency on Wednesday confirmed concerns raised by political parties and civil society about the agency’s ability to take over the payments of social grants, in line with a commitment to the Court.

SASSA’s current contract with CPS was declared invalid in 2014. Rather than appoint a new contractor, SASSA then submitted a plan to the court to take over the payments to 17 million beneficiaries on 1 April 2017.

“After carefully considering our options, we felt it may cause panic if we try and implement a new system. We acknowledge we have failed,” said SASSA official Raphaahle Ramokgopa. She said SASSA’s legal team would head to the Constitutional Court next week to request that the ruling declaring the invalidity of the current CPS contract be suspended. SASSA is yet to approach CPS on this proposal.

Ramakgopa was among a delegation from SASSA and the Department of Social Development, briefing Parliament’s portfolio committee on Social Development on its progress to institutionalise the payment of social grants. She said since the last presentation to the committee, SASSA had been engaging with the National Treasury and the SA Reserve Bank regarding the payment system.

SASSA had considered several options, including:extending the CPS contract for a year; using Grindrod or another bank to rollout payments; using the SA Post Office; and appointing a contractor to facilitate cash payments at around 10,000 existing pay points.

“Each of the options has advantages and disadvantages with varying probabilities of success,” said Ramakgopa. “We believe that extension of the [CPS] contract carries the least amount of risk and will ensure that come 1 April, beneficiaries will be paid as normal,” she said.

She said SASSA’s plan was to create “special bank accounts” for beneficiaries. Banks would be invited to bid for the contract to establish the special accounts, with cards for the beneficiaries and a biometric identification system.

Deductions from the grants would be limited, said Ramakgopa. The Black Sash and others have been calling for the “ring-fencing” of social grant money in beneficiaries’ accounts to solve the problem of unauthorised and illegal deductions which has troubled grant recipients for years. SASSA would subsidise transaction fees from the new accounts, Ramakgopa said.

The bid documents would be ready by end-March and banks would have until May to bid. The phasing out of the CPS contract would begin in October and be complete by March 2018. While some committee members welcomed the progress made by SASSA, concerns were raised on what would happen if the Constitutional Court rejected the request to suspend its declaration.

SASSA CEO Thokozani Magwaza insisted that there was no need for panic. “We will wait to get guidance from our legal representatives on a way forward…the issue of deductions is with Net1. CPS has been doing a great job with the payments so far.”

When asked why SASSA — in three years since the ConCourt ruling — had not completed the takeover process, Magwaza said: “It’s not that we haven’t done anything since the ruling. We have reported back to the court on time and have been engaging with key stakeholders.”

Earlier, the meeting got off to a rough start with committee members from opposition parties at loggerheads. DA MP Lindy Wilson and IFP MP Liezl van der Merwe were outraged that Social Development Minister Bathabile Dlamini was not attending the briefing. Last week, the meeting was postponed as Dlamini and Committee Chairperson, Rosemary Capa, were attending an ANC Lekgotla. “It is unacceptable that the Minister is absent yet again. It’s a damn disgrace,” said Wilson.

ANC member Hope Malgas hit back at the duo. “We have a quorum as the committee. It is not necessary for you to attack the Minister in her absence. We don’t ask about the business and leaders in your party.” Capa added that Dlamini had excused herself from the briefing and was attending a Cabinet Lekgotla.

CORRECTION: The original version of this article incorrectly stated that Liezl van der Merwe is a DA MP. She is an IFP MP. We regret the error.

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TOPICS:  Social Grants

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