Finding extra money? Not a problem

Cash Paymaster Services (CPS) has agreed to continue paying social grants for a fee of some R2.33-billion a year, the company disclosed in papers filed with the Constitutional Court on Thursday.

That represents an increase of roughly 4% on the per-recipient price CPS has charged the state over the past five years. The South African Social Security Agency (Sassa) will have to find the extra R100-million in its existing budget.

Helping the likes of Sassa to find money in existing budgets is something the finance department is pretty good at, treasury director general Lungisa Fuzile told Parliament this week. And if money were to run out, it would do so towards the end of the financial year, he said, leaving plenty of time to “augment” where necessary.

On Wednesday, CPS representatives would not tell the Constitutional Court how much the company intended to charge to continue distributing grants, saying it involved an inflation calculation. They suggested that a previous “in principle” agreement between Sassa and CPS — nullified by a ministerial task team — could easily form the basis of a new contract.

On Thursday CPS gave the court a copy of the “draft contract” it had agreed to with Sassa, but which was never signed. That contract is for two years, at R194-million a month, regardless of how many grant recipients CPS pays on behalf of the state every month.

The Post Office said it could take over grant payments at a cost of R20 a recipient. That would equate to an annual cost of R2.76-billion — or R429-million more than the CPS offer. —