CPS asks for pay hike to disburse social grants
Concourt declared contract with Sassa invalid in 2014
Social grants distributor Cash Paymaster Services (CPS) has asked the Constitutional Court for an order authorising it to make representations to the National Treasury on a reasonable fee for its continued provision of cash payment services from April 1 to September 30.
CPS made this submission yesterday as it responded to an application by the South African Social Security Agency (Sassa) earlier this month that it continue to provide the payment of social grants through cash withdrawal at Sassa’s designated pay points after March 31.
The contract Sassa currently has with CPS was declared invalid by the Constitutional Court in 2014.
However, in March last year‚ the court extended the contract to the end of March after the agency failed to find a new contractor to pay social grants from April 1 last year.
In its application‚ Sassa said it had managed to make arrangements for three of the four categories of beneficiaries of social grants to be serviced by entities other than CPS.
“In respect of the fourth category dealing with cash payments made to some 2.5 million beneficiaries‚ Sassa has been unable to procure an alternative methodology to secure timeous payments to such beneficiaries at this stage‚” Sassa said in its application for extension.
Sassa said this category was comprised of those who were illiterate‚ elderly and the disabled‚ who did not use banks and received their grants physically.
In its affidavit‚ CPS said while it preferred not to provide any payment services beyond March 31 until its position was regularised by a lawful tender process‚ it remained willing and able to provide whatever payment services to ensure the uninterrupted payment of grants.
In his answering affidavit‚ CPS director Nunthakumarin Pillay said providing the cash payment services at the current price would cause CPS to incur a considerable loss over the six-month period.
“The majority of operational costs incurred are fixed or non-variable costs – in other words‚ they are costs that are incurred regardless of the volume of beneficiaries paid.”