CPS has a moral duty to carry on paying — Sassa
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.