Sassa turns to court to extend grants contract
• Agency finally admits it lacks distribution capacity • Insists, however, that only the CPS deal is acceptable
The South African Social Security Agency (Sassa) has turned to the Constitutional Court at the 11th hour, asking it to extend a social grants distribution contract it invalidated in 2014.
In its papers, the agency has finally admitted that it does not have the capacity to distribute the social grants and says the payments thereof will be in jeopardy come April 1 if the court turns down its urgent application. Sassa also concedes that its efforts to petition the Treasury for a condonation have failed.
Sassa has also ruled out all other options to distribute the social grants, including roping in the country’s major banks, insisting that only a Cash Paymaster Systems (CPS) contract extension will do.
The development comes as Sassa officials admitted in Parliament on Tuesday that the agency had no plan in place to distribute more than 17-million social grants to more than 11-million beneficiaries other than to extend Net1 subsidiary CPS’s contract.
But South African Post Office (Sapo) CEO Mark Barnes stands at the ready to distribute the social grants should the need arise for this.
A Sassa delegation is due to meet Net1 CEO Serge Belamant on Wednesday to discuss the terms of a contract extension, while Social Development Minister Bathabile Dlamini is giving a briefing on the matter on the same day.
Net1 spokeswoman Jeanette Agliotti said Belamant was making his way back to SA for the negotiations.
In its 21-page affidavit filed on an urgent basis, Sassa is seeking permission to enter into negotiations with CPS for a year-long contract. In the papers, Sassa CEO Thokozani Magwaza says the agency’s attempts to procure a new tender have been unsuccessful and it has limited capacity to administer the social grants itself.
This made it necessary to ask the court for assistance in ensuring that social grant beneficiaries were not deprived of the right to dignity and equality as promised in the Constitution, Magwaza said.
“In short, come April 1 2017, if an agreement is not procured with CPS to continue rendering the services for a further year, the majority of our poor people will have hardship in receiving payment of social grants.”
Magwaza said CPS had written to Sassa on February 9 2017, indicating that it was “amenable to assisting” in a transitional period. Sassa’s records show that more than 1.6-million beneficiaries have accounts with 23 banks, but the majority of recipients do not have their grants paid into personal accounts.
This means no system, including Sapo’s, is suitable to ensure grants are paid.
“Sassa requires one year to be in a position where it will make payments of social grants utilising the national payment system and, in isolated selected areas, the service of a cash service provider,” he said.
Magwaza had approached Barnes to consider options for Sapo to assist with the distribution of social grants after April 1.
Barnes told Business Day on Tuesday that Sapo had indicated it “would be happy to engage with them [Sassa] in the interest of finding a solution and making whatever contribution we could to kind of rescue the situation”.
Barnes said Sapo would be ready to help by April if approached, but a sustainable solution would require partnerships with technical experts.
“We [are] sticking our hand up to see if we can be part of an intergovernmental solution to a government mandate to pay social grants and we believe that is where the responsibility lies, and furthermore that is what we are required to do in terms of the ICT policy approved by the Cabinet,” he said. There were “workable alternatives”, which could be used immediately. Thereafter, a “complete and resilient” solution between Sapo and relevant partners could be made available in months.
Sassa programme head Zodwa Mvulane had to face the music alone at the Scopa meeting, at which she also insisted that the only sustainable option to resolve the impasse was to extend CPS’s contract.