SASSA requests extension of CPS contract

Thursday, February 8, 2018

The South Africa Social Security Agency (SASSA) has filed an affidavit with the Concourt to request an extension of the suspension of invalidity of the Cash Paymasters Services (CPS) contract.

“This is to allow SASSA to phase out CPS and phase in a new service provider. The reason for this development is that the contract with CPS ends at the end of March and a new service provider can only be appointed after the CPS contract ends,” SASSA said in a statement on Thursday.

According to the Panel of Experts appointed by the Constitutional Court,  in their second report to the court, they indicated that there will be a need for such an engagement.

“This will be for a limited service, namely cash payments at paypoints, because SASSA and the South African Post Office (SAPO) have already tested other functions such as payment through banks and retailers and will be able to rollout other services from April without the involvement of CPS. What this means is that the CPS should assist with doing cash payments only for the tended period,” SASSA said.

During the extended period, SASSA would have appointed a new service provider for taking over cash payments at paypoints.

According to SASSA, this will only affect 2.9 million out of 10.6 million grant beneficiaries which is 27% of the beneficiaries and will have no adverse impact on operations. 

SASSA has successfully paid over 2 million beneficiaries who receive their grants from commercial banks.

“This was done today through our Paymaster General account which was opened. This move is a giant step taken towards SASSA ultimately paying all beneficiaries using any type of electronic payment method.

“It is part of fully complying with orders of the Constitutional Court and phasing out CPS, the current service provider,” SASSA said.

Direct transfers

As from 1 March 2018, SASSA will do direct transfers to about 5.7 million beneficiaries who use the SASSA card. This will bring about 80% of payment transactions under the control of SASSA by the end of March 2018. 

By April 2018, the only beneficiaries whose payments won't be falling under SASSA control will be the ones paid in cash at SASSA paypoints.

The South African Post Office has already gone to the market for the cash payment category by way of advertising a tender. This represents just under 3 million beneficiaries.

“Till recently, the legislated life insurance premium deductions of 700 000 beneficiary accounts were deducted through a third party contractor. At the moment SASSA has already taken over this function and is paying such premiums directly on a monthly basis. This will also result in huge savings for government,” SASSA said.

SASSA is currently negotiating with the banking industry in order to develop a low cost banking account which will be subsidized by SASSA so that beneficiaries get the full value of their grants without paying bank charges.

Such an account will not allow electronic debits and is intended to protect beneficiaries from unauthorised debits which have been a problem in the past. 

SASSA card

The current SASSA card is still valid and will only expire at the end of the year; by which time the new SASSA/SAPO card shall have been introduced.

SASSA has gone on a countrywide awareness campaign to inform beneficiaries with these developments and to eliminate fake messages which tell beneficiaries to switch to some questionable new cards. The public is reminded to contact 0800601011 in case they need more clarity. –

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