SASSA to approach Con Court over social grants contract extension

Wednesday, February 1, 2017

Cape Town – The South African Social Security Agency (SASSA) says it will approach the Constitutional Court to ask for permission to validate and extend the contract of a company it currently uses to pay grants to millions of South Africans.

The agency said this when it appeared before the Portfolio Committee on Social Development to brief MPs on the progress made in implementing the Constitutional Court ruling on the bidding for the new social assistance payment tender and the institutionalisation of the grant payment system on Wednesday.

The agency is tasked with paying social grants to at least 17 million beneficiaries across South Africa.

The briefing came as the current contract with Cash Paymaster Services is set to expire at the end of March. The Constitutional Court had previously made a ruling that the contract between SASSA and Cash Paymaster Services was invalid and ordered a re-run of the tender process.

But Cash Paymaster was allowed to continue to fulfil its contractual obligations so that social grants payments would not be disrupted.

Raphaahle Ramokgopa, the Executive Manager for Strategy and Business Development at SASSA, said the agency would approach the Constitutional Court as a short-term measure to ensure that beneficiaries will receive their payments on the first of April 2017.

She said a number of options were considered by SASSA, but there were concerns that the options would not be feasible and could lead to social grant recipients being paid late.

“The option that is left for us, if we are to guarantee payment by the first of April, [is procuring the services] of the current service provider for a limited time in order to pursue option six … as recommended by the task team.

“After doing that, we also came with timelines … to say if we were to go for option one, which is going with the current service provider, automatically it makes it irregular and any expenditure incurred would be irregular.

“The only thing that would make us survive would be to go to court, approach the court as a matter of urgency and request the … suspension of invalidity and then also go to the office of the Chief Procurement Officer and follow the deviation process,” Ramokgopa said.

She said SASSA would ask for the current contract to be extended by a period of one year.  

While a number of options were taken into consideration to resolve the current challenges, the sixth option that Ramokgopa referred to, which the National Treasury supports, involved appointing a service provider for cash distribution to grant recipients who are currently using cash pay points.

It also means that banked beneficiaries would use their existing bank accounts to disburse grants through the banking sector.

Following the Constitutional Court ruling, Social Development Minister Bathabile Dlamini set up a Ministerial Advisory Committee, which later recommended that the payment system be developed in-house.

As a medium-term option, SASSA proposed that it should procure the services of all banks for those beneficiaries who seek to be paid through the banking infrastructure.

It also proposed that it should procure the services of a service provider to pay beneficiaries that are currently using cash pay points.

“We found that while this option would ensure that beneficiaries are paid in terms of the guaranteed service delivery, it had problems.

“From a supply chain point of view, it would be inappropriate to go and extend an illegal contract.

“From a Constitutional Court point of view, we found that it would be something that is in violation of the Constitutional Court recommendation. And also, from a public perception [point of view], we found that it would be something that would really be compromising the organisation.

“But in terms of delivering services, we found that this option is the only one that can ensure that come the first of April, all beneficiaries are paid.” –

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