CAPE TOWN - South African social security agency’s (Sassa’s) fate will today be decided as entities confer in Parliament in order to reach an agreement on a payment provider.
Today marks D-Day for the social security scheme.
Sassa and the South African Post Office (Sapo) have been given until 6 pm today to decide on a settlement which will affect the lives of 17 million beneficiaries.
We take a closer look at the fired-brawled social security agency and how the current feud transpired.
Sassa has assured Parliament in February that the payment of social grants will continue as usual, post April 1.
This follows the agency's attempt to extend the invalid and unlawful contract with service provider, Cash Paymaster Services (CPS).
"One thing for sure is that come April 1, we will be paying as usual. How we are to pay? That is what we have agreed with National Treasury and South African Reserve Bank," said Sassa chief executive officer Thokozani Magwaza.
This payment method was however disputed by opposition parties, citing CPS as lacking "readiness".
The ball was in the CPS's court, allowing them to engage with the contract at hand.
However, they had failed to reach an amicable agreement.
Sassa said they would consider delivering grant money in trucks to beneficiaries, if a a solution is not met.
This was revealed in Parliament when Sassa and the Social Development Department appeared before their oversight portfolio committee, along with the South African Reserve Bank.
The social development department acknowledged that extending the contract with CPS was the most practical solution.
Additionally, department director-general Zane Dangor revealed that paying out grants through banks would also be an option.
This comes after noting that at least 90% of grant recipients have bank accounts.
Dangor added that for those with both banks accounts and Sassa cards, the plan was to use Postbank outlets or post offices to pay them.
“That will mean having to move them from biometrics to PIN. Forty percent use biometrics", he said.
Sassa reportedly wants to extend their contract with CPS for at least three years.
The payments provider would receive approximately R425 million a month (R5.1 billion a year) if they request R25 for each of the 17 million beneficiaries.
Sassa reportedly filed for an extension of CPS's contract in order to avoid the ill-fate of millions of South Africans unable to receive their grants.
Yet, Sassa has been dubbed unable to deal with the payments.
"Sassa does not at present have the capacity, budget and skilled personnel to implement the progress report within the time frames" ,according to papers Cosatu and Archbishop Emeritus Njongonkulu Ndungane called on Dlamini to resign state.
Sassa set aside R2 million for the payment of a 10-member panel of experts appointed to monitor phasing out the CPS contract.
The panel of experts were appointed as per the Constitutional Court's command.
The proposed budget by Sassa has however been criticised.
“We made an assumption that it will run until the end of the financial year. If it goes beyond, it will be a problem", said Chief finance officer, Tsakeriwa Chauke.
Social Development Minister Bathabile Dlamini announced the appointment of Pearl Bhengu as interim CEO of Sassa.
Bhengu assumed this position after former CEO, Thokozani Magwaza mutually agreed to terminate his employment contract.
Magwaza's exit comes after standing committee on public accounts (Scopa) chairperson Themba Godi spoke out about Magwaza's alleged death threats.
The former Sassa CEO claimed that he had received death threats about finalising the contract between Sassa and the SA Post Office (Sapo) to replace Cash Paymaster Services (CPS) in the payment of social grants.
Sassa said it was in talks with the National Treasury to receive additional funding. The funding required was in order to comply with a Constitutional Court order and replace Net1 UEPS Technologies as the distributor of more than R150billion of welfare payments a year.
The funding would finance a pilot project in order to subsequently replace Net1 by April 2018.
Despite the court ruling on Net1's contract as invalid, Sassa failed to secure an alternate service provider.
The social security agency has received a vote of no confidence from MP's.
Sassa failed to update Parliament's social development committee on phasing out the current contractor, CPS.
"This is heading for another disaster", declared ANC MP Vilhelmina Mogotsi.
In addition, opposition party the Democratic Alliance expressed their embarrassment at Sassa.
DA MP Bridget Masango noted that nearly 90% of what they had asked Sassa for was not provided.
"None of the timelines given were kept. I can’t believe that we don’t have Sassa here at this critical time", she said.
Dlamini on Monday slammed allegations that Sapo would issue Sassa grants.
Sapo can only produce 2.4 million cards per annum as opposed to a minimum requirement of 4.2 million cards per year, said Dlamini at a media briefing in East London.
The Minister added that Sapo does not have a business license which effectively compromises their banking services.
However, many believe that the reasoning for this is to curve yet another crisis for the social security agency.
Sassa and Sapo have today been forced back to the negotiating table by Parliament.
The entities will enter a Parliamentary meeting to receive a progress report from the two entities on the procurement of the social grant contract.
The forthcoming meeting comes after Dlamini announced on October 30 that he procurement of banking services, production and issuing of banking cards and provision of cash payment services was to be advertised on Friday.
Sassa has declared that Sapo can only deal with the integrated payments system, including biometrics, on the grounds that they did not have the capacity and capability for grant payments.
Sapo has since trashed these claims whilst maintaining that 97% of the requirements contained in the Council for Scientific and Industrial Research (CSIR) due diligence report commissioned by Sassa.
The outcome of this meeting is pending the judgement agreed upon in this meeting.
- BUSINESS REPORT ONLINE