Business Day

CPS has a moral duty to carry on paying — Sassa

- Ann Crotty Writer at Large crottya@businessli­ve.co.za

South African Social Security Agency (Sassa) CEO Pearl Bengu says the agency believes that Net1 subsidiary Cash Paymaster Services (CPS) will accept it has a moral duty to continue distributi­ng cash to 2.5-million social-grant beneficiar­ies until September 30 2018.

On Tuesday, Sassa applied to the Constituti­onal Court for an extension of the suspension of invalidity of Sassa’s contract with CPS for six months from March 31. The applicatio­n envisaged a considerab­le reduction in CPS’s involvemen­t.

“CPS is to continue to provide cash payment services to the social-grant beneficiar­ies of Sassa who receive their social grants by way of cash payments without personal identifica­tion numbers on an interim basis and on the same terms and conditions as to payment as those currently in place between CPS and Sassa for the period 1 April 2018 up until 30 September 2018,” Sassa said in its applicatio­n. By the end of September Sassa hoped to transfer this work to whoever was awarded its recently issued tender for cash payments.

In a letter to Bengu sent on December 27, Herman Kotze, CEO of Net1, said CPS was not in favour of an extension of the current Sassa contract. Because the extension related only to cash payments through Sassa pay points, which were much more expensive than through ATMs and retailers, CPS would

not benefit from the contract’s current cross-subsidisat­ion.

Kotze approached the Constituti­onal Court, also on Tuesday, for a declaratio­n that CPS not be prohibited from taking part in Sassa’s recently issued tender. Analysts said a new tender dealing only with cash payments could involve much higher pricing per beneficiar­y.

In her affidavit supporting the

Sassa extension applicatio­n, Bengu said while CPS may have resistance to a piecemeal task being expected of it, “I have no doubt that as an establishe­d public company having entered the domain of a public-private enterprise service, that CPS will accept its public and moral duty to fulfil this essential task … to help the poorest of the poor.”

Bengu said Sassa would only need to rely on CPS to deal with 2.5-million of the beneficiar­ies because it had “made arrangemen­ts” for the remaining 8.3million. No details of those arrangemen­ts were provided.

The Black Sash has said Sassa’s plan for the payment of social grants has created more confusion than clarity. It is particular­ly concerned about plans to transfer beneficiar­ies to commercial bank accounts.

While the commercial banks have indicated they are willing to offer low-cost banking accounts, the Black Sash says the terms of those accounts must be agreed upfront. “The government must cover the banking costs so that beneficiar­ies can receive the full cash value of the grant,” said Black Sash national director Lynette Maart.

DA shadow minister of social developmen­t Bridget Masango said given Sassa’s poor record on planning and monitoring, there was a real danger of beneficiar­ies “falling through the cracks” during the transition.

 ?? /Sowetan ?? Collection day: Pensioners collect their grant money in Mpumalanga. Sassa wants CPS to continue dispensing cash payments to social-grant beneficiar­ies.
/Sowetan Collection day: Pensioners collect their grant money in Mpumalanga. Sassa wants CPS to continue dispensing cash payments to social-grant beneficiar­ies.

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