SASSA Card. PHOTO: SASSA website

In The News South Africa

Sassa vows September will see end of CPS contract

PARLIAMENT, June 7 – The South African Social Security Agency (Sassa) said on Wednesday, it was on track to do away with the services of Cash Paymaster Services (CPS) completely in September.

Sassa acting CEO Abraham Mahlangu told Parliament’s portfolio committee on social development the agency was systematically reducing the number of grant recipients who are paid their monthly grants in cash.

These are the only beneficiaries who continue to be paid through Cash Paymaster Services, the controversial company whose contract was extended until September while Sassa transfers the function to the South African Post Office and commercial banks.

At this point there were 1.9 million of the country’s roughly 11 billion welfare recipients who paid in cash, down from 2.2 million in April. Sassa’s estimate is that ultimately there will 789,000 for whom no other payment method is an option.

“We will intensify efforts to bring it down even further,” Mahlangu said, but added that where there is no alternative Sassa would take “extreme measures” to safely deliver the money to grant recipients in remote areas, including possibly calling on the defence force to help.

Fellow Sassa officials told members of Parliament (MPs) the aim was to ensure that the agency could report to the Constitutional Court, in September that it had terminated the services of CPS, in line with the conditions the court imposed for a further extension of the contract.

“We are trying to intensify the card swap so that in August we can go to the court and say this is the last month and that is that. We can tell the committee already that our plan is not to go back and ask for another extension,” said Sassa’s head of strategy Raphaahle Ramakgopa.

She said Sassa planned to complete the migration of 2.5 million welfare card users to the SAPO card system by the end of this month and migrate a further four million to the new system by the end of June.

By the end of August, the aim is have switched over 7.9 million card users to the new system.

Inkatha Freedom Party MP Liezl van der Merwe said CPS should not simply be allowed to walk away unscathed in September but must face a full parliamentary inquiry into its conduct while acting as the sole payment provider for Sassa for five years.

“We need a full parliamentary probe into the unethical business practices of this company. We cannot simply let CPS exit and not suffer consequences.”

The Constitutional Court in 2014 found that the contract Sassa signed with the company was invalid but suspended that order so as not to compromise grant payouts. It was forced to extend the contract in April 2017 after it emerged that the agency had been woefully unable to set in place an alternative payment system, raising the spectre that the payment of some 17 millions grants would cease from one month to the next.

In February, the March was forced to agree to a further six month extension after negotiations for a transfer to the post office hit several hurdles with former social development minister Bathabile Dlamini.

Van der Merwe said the progress made in recent months was proof that replacing that Sassa had been capable of finding an alternative to CPS but had been hampered.

There was further controversy last month when it emerged that Grindrod, which provided banking services to Sassa under the CPS contract, had starting deducting R10 from grants for banking charges. It said it was doing so recuperate costs no longer covered by a fee of some R16 CPS previously charged Sassa per beneficiary. The bank threatened to close the accounts if it were not allowed to make the deduction. ANA

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