It is understood that it could take up to two years to replace all the cards - at “substantial” cost - and grant beneficiaries would need to be re-registered.
The fiasco began when Sassa - which was to have taken over grant payments to millions of beneficiaries in April from Cash Payment Services - said it was unable to.
This followed a 2014 Constitutional Court ruling that the contract with the CPS was illegal and the department and Sassa were ordered to insource the administrative requirements to distribute grants.
However, Social Development Minister Bathabile Dlamini settled on CPS as the only viable alternative, sidestepping the need to secure the Constitutional Court’s approval for extending CPS’s contract by stipulating she was renewing it.
Sassa was warned last year that it would take considerable time and money to transfer the payment of social grants from CPS, which is owned by Net1.
According to correspondence between Net1 and Sassa, it will take up to two years to replace all the beneficiary cards.
Net1 has the technological systems to extend the cards’ longevity.
The Weekend Argus has seen correspondence, dated between May and December, between Net1 and Sassa where Net1 highlights the expiry date issue.
In a letter to Sassa, Net1 director Serge Belamant said the company had conducted tests to establish how the lifespan of the cards could be extended for another 18 to 24 months, during which time Sassa was to have taken over the grant payment system. However, he said in the letter, “this issuing process, in our view, will prove difficult to achieve in less than 24 months”.
Belamant said hundreds of Sassa branches would need to be upgraded. “We believe that 50% of all cards could be updated by April 1, 2017.”
In a letter sent in May, Belamant said the process would also require the registration of grant beneficiaries.
He pointed out the initial registration process had involved complex logistics and had cost CPS more than R1 billion.
“It is our view, then, there is not enough time left between now and March 31, 2017 for the banks to assist in this massive task.
“The cost associated with this upgrade may still be quite substantial,” he warned.
Belamant was not available for comment yesterday.
Meanwhile, a rights group which has approached the Concourt over the grant crisis, intends asking it to declare that CPS may not make a profit from a new deal to distribute the grants.
Freedom Under Law argues a “no benefit” order imposed by the court in relation to CPS’s current contract should be made to apply to a new deal being hammered out.
The Black Sash, another rights group that approached the court in the matter, has asked for the terms of a new contract to be “reasonable”.
The Concourt will hear argument next Wednesday.
Chief Justice Mogoeng Mogoeng has set down Monday as the deadline for Sassa to give a detailed account of how it came to be unable to take over the administration of grants next month, leaving a vacuum almost certain to be filled by CPS.
President Jacob Zuma, meanwhile, has called on South Africans to wait until April 1 before commenting on the saga and took a swipe at the host of critics who have called for Social Development Minister Bathabile Dlamini to be axed.
“People are making judgment before the day arrives it’s just exciting the country.”
However, the DA wants Parliament to set up a commission of inquiry into whether Dlamini is fit to hold office.
Additional reporting by Noni Mokati and Rapula Moatshe.