Grants payments at risk
IF GIVEN a choice between watching the country “burn” if grants are not paid out to beneficiaries or incurring irregular expenditure by extending the contract of the company issuing payments, SA Social Security Agency (Sassa) chief executive Thokozani Magwaza would choose the latter. And he may have to do just that. As the April 1 deadline to meet a Constitutional Court ruling on the payment of social grants fast approaches, Sassa has been forced to admit that they are not ready.
And the only feasible option is to extend the illegal and invalid contract with Cash Paymaster Services (CPS) that got them into hot water with the court in the first place.
In 2013, the Constitutional Court ruled that the tender for the distribution of social grants awarded to CPS was invalid.
However, it ordered that the contract be allowed to run its full course – until April 1 2017, in order that social grants recipients were not affected while Sassa developed their own payment methodology.
The court set out seven key items that Sassa needed to deliver. But, appearing before parliament’s social development committee yesterday, Sassa said they had not completed any of these. They outlined six possible scenarios to ensure that payments are made on April 1, but with less than 60 days to go, they said the best option would be to extend the contract.
This would require them to approach the Constitutional Court to get permission to extend it for an additional year, negotiate terms with CPS and request a deviation from National Treasury – none of which has been done yet.
Rapaahle Ramokgopa, a Sassa executive, told the committee intended to approach the court next week and had put together a team to negotiate time-lines, costs and what she called the “unfavourable” conditions of the current contract – such as the illegal deductions being made from social grant beneficiaries’ accounts by Net1 – CPS’s holding company.
Magwaza said: “As CEO, I had to take a decision. Come April, we need to pay. I can get all the punches and take all the blame but come April 1, we have to pay 18-million grant recipients and if it means we have to use CPS to do it, then so be it. “If I have to choose between whether the country must burn on April 1 and irregular expenditure, I’ll choose irregular expenditure.” He admitted that CPS, who had been quoted in the media as saying Sassa would fail, were “arrogant”.
Magwaza said he had lobbied for Net1 and CPS to be charged over the illegal deductions but said he had to divorce the payment system, which CPS was doing well, from the deductions being made by Net1 in order to ensure payments go ahead without a hitch. The presentation and Social Development Minister Bathabile Dlamini’s absence – this time to attend a cabinet lekgotla – left opposition MPs seething. The IFP’s Liezl van der Merwe said Sassa had done nothing in four years.
“You’re ambitious in telling us there is no crisis if we must extend an illegal and invalid contract that was declared such in 2013,”
She said South Africans were “deeply upset over the deductions” from their accounts. “You’re handing a bunch of crooks another lifeline,” said van der Merwe.
The DA’s Evelyn Wilson said it seemed as if the situation had been “manipulated” to “force an emergency” that would compel the court to extend the contract.
ANC MPs who in November had taken Sassa to task, however rallied together, detailing how the ANC government had made social grants payments to millions of people since coming into power.
ANC MP Solomon Mabilo said their “bone of contention was whether come April, people will be paid and the CEO has responded that yes, they will be paid”.
Only feasible “option is to extend illegal, invalid contract