Sassa and CPS wrangle over costs going to Constitutional Court

The Constitutional Court is being asked to intervene yet again in the ongoing South African Social Security Agency (Sassa) grant beneficiary debacle.

This time, it is over the 65 cents difference between what Cash Paymaster Services (CPS) claimed it needed and what National Treasury had recommended.

Herman Kotze, CEO of CPS holding company, Net1, said yesterday CPS had requested “the Constitutional Court allows for CPS to invoice Sassa at the Treasury recommended rate of R45 per beneficiary, pending the final court order”.

Despite this, the two million beneficiaries who were paid out in cash would still receive their monies at the end of the month, a Net1 company spokesperson said yesterday.

Treasury had recommended R44.35 per beneficiary, which Kotze stated was not enough for CPS. “Its continued operation under these circumstances will constitute reckless trading on the part of its directors,” Kotze declared in an affidavit on Friday.

“The fixed monthly service fee is required by CPS to facilitate the reduction and closure of pay points as Sassa have publicly advised. The time frames and closure have as yet not been made available to CPS,” Kotze said yesterday.

“CPS, in terms of the Constitutional Court order, is still required to provide the services on the same terms and conditions and is unable to reduce the infrastructure or associated costs without the details of the phaseout plan.”

Kotze noted that the reduction of beneficiaries at a pay point would not result in the reduction of costs, as the same cost infrastructure (staff, security, vehicles) would still be required.

In his affidavit, he explained that CPS had enrolled 16 396 new beneficiaries at R94.57 each and was entitled to invoice Sassa for more than R1.55 million.

Except, CPS had still employed 690 people at a cost of more than R3 million, thanks to Sassa requiring CPS to service all the previous pay points, bringing about a loss of nearly R1.5 million for April.

In May, CPS had lost nearly R950 000 and as Sassa continued with its enrolment programme, Kotze said CPS expected to lose more money and proposed “the court direct Treasury” to recommend a minimum monthly payment so CPS could cover its operating costs of nearly R148 million per month.

The Constitutional Court has drawn a six-month line in the sand for the declaration of invalidity of the original contract between Sassa and CPS, which has been redrawn twice already.

Meanwhile, the Black Sash Trust, which has been opposing the profit being made off government, was unimpressed.

“Last week’s cancellation of the tender for cash payments is extremely concerning, mainly because Minister Susan Shabangu and Sassa appear to have no interim plan on how to mitigate the September deadline,” said Black Sash’s Angie Richardson.

“Simply put, the Black Sash finds this laughable. There is simply no possible way that Sassa or the recently appointed technical panel will find a solution for the distribution of cash grants by the deadline.

“Which means the focus should be on the probability of CPS being awarded a further extension, or face the reality of two million social grant beneficiaries not receiving their money come October.”

Richardson said the latest court application had been left until the last minute, which put beneficiaries’ at risk of not being paid.

“Basically, they are bullying government into getting what they want.”