Johannesburg - The South African Social Security Agency wants to extend its contract with Cash Paymaster Services (CPS) by at least three years.
The agency has admitted in court papers filed in the Constitutional Court yesterday that it did not have the capacity to pay out grants.
If Sassa has its way and CPS demands R25 for each of the 17 million recipients, this would mean the agency would have to pay R425 million a month, or
R5.1 billion a year.
The court papers also confirm information The Star had, indicating Sassa had withdrawn its initial Constitutional Court papers on Wednesday as Minister Bathabile Dlamini and acting chief executive Thamo Mzobe had not authorised the move.
The papers were allegedly filed on Tuesday by embattled chief executive Thokozani Magwaza, who is said to be off sick. On Wednesday, when she was made aware of them, Dlamini ordered that they be withdrawn.
The filing of the initial court application is now being investigated, the new papers say.
Sassa claims in the papers filed yesterday that if the CPS contract is not extended, millions of South Africans will not be able to receive their grants because the department does not have the capacity to deal with the payments.
In fact, it might take Sassa at least five more years to implement the internal systems.
The filing of the papers came as Cosatu and Archbishop Emeritus Njongonkulu Ndungane called on Dlamini to resign.
“Sassa does not at present have the capacity, budget and skilled personnel to implement the progress report within the time frames,” the papers state.
Read also: Sassa begins contract talks with Cash Paymaster Services
Sassa admits it hasn’t implemented the progress report to take over the payment of social grants by the end of this month as instructed by the court. The CPS contract was found to be unlawful by the Constitutional Court in 2014, and expires at month-end.
One of the reasons given as to why progress has not been made is that the agency has had four chief executives since November 2015, and that Dlamini differs with Finance Minister Pravin Gordhan on the way forward.
But Dlamini and Sassa say they take full responsibility for the delay. “The minister and Sassa accept responsibility for delays in identifying and redressing deficiencies in the plan since the time of reporting to the court on November 5, 2015.”
The department said some of the options considered in implementing the new grant-payment system was using banks and the South African Post Office, but there was no consensus on their feasibility. Instead, the CPS option was found to be the one with the least risk to avoid the interruption of payments.
“The minister and Sassa have since been advised that the plan was overly optimistic, unrealistic and underpinned by insufficient research,” the papers say. Though the department and the agency were aware of this as early as August last year, they wrote to the Treasury only on February 7 this year, asking for an extension of the CPS contract.
“The minister and Sassa accept they ought to have been so aware earlier,” the papers state.
The Treasury refused the extension of the contract, labelling it unlawful and saying it would not support it.
In the court papers, Dlamini said she “accepts responsibility for the delays in identifying and redressing deficiencies”. She added that she had now “mandated a negotiating team to conduct negotiations with CPS” so it can continue paying the grants even after March 31.
Talks with the company began on Wednesday. Dlamini admits formal negotiations with the company should have started sooner.
On Tuesday, human rights organisation Black Sash also filed papers in the Constitutional Court, asking it to allow CPS to continue with its services even after its contract expires.
It was revealed in Parliament this week that if the matter is not resolved, Sassa might have to use trucks to deliver money to grant recipients.