Sassa payment system disaster looms come April 1
IF IT comes down to a choice between watching the country “burn” when social grant recipients don't receive their benefits come April 1 or incurring irregular expenditure by extending the illegal contract of the company making the payments, the man in charge says he would choose the irregular expenditure every time and shoulder the blame.
And South African Social Security Agency (Sassa) CEO Thokozani Magwaza 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 have failed, 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 this year – in order that social grants recipients were not affected while Sassa developed their own payment system.
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 the terms with CPS and request a deviation from the National Treasury – none of which has been done yet.
Sassa executive Rapaahle Ramokgopa told the committee that they intend approaching the court next week, and have put together a team who will negotiate the timelines, costs and what she called the “unfavo 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 the 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 will choose the irregular expenditure.”
He admitted that CPS, who have been quoted in the media as saying Sassa would fail, are “arrogant”. He said he had lobbied 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 to ensure payments go ahead without a hitch.