The Inter-Ministerial Committee on Social Security, led by the minister, was giving an update on progress made by Sassa on the new payment system for social grants in Pretoria on Friday.
The briefing follows the implementation of the Constitutional Court orders as directed in March this year.
In its judgment, the Constitutional Court ordered the minister and Sassa to submit quarterly reports highlighting the steps being taken to ensure the appointment of the new service provider when the current 12-month contract with Cash Paymaster Services lapses at the end of this year.
Dlamini said the proposed five-year take-over period was based on extensive research into various payment options and recommendations of the ministerial advisory committee and the work streams.
She added that they had begun collaborating with South African Post Office (Sapo) to ensure beneficiaries are paid at the end of March next year.
“As part of this interim arrangement and in line with the position of the governing party, Sassa began collaborating with Sapo with a view to working together to ensure payment of social grants beyond March 2018.”
According to the minister, under the current contract with CPS, there are serious challenges, which she said they are working on resolving, with regard to the payments.
“Under the current contract with CPS, the total amount of all social assistance transfers are deposited into a CPS bank account. This creates serious challenges as Sassa is unable to have direct oversight on this account. To address this, Sassa is in a process of reactivating its paymaster general account with the South African Reserve Bank. To this end, we are in consultation with the National Treasury,” she said.
Dlamini said plans were underway to open Sassa’s corporate account with special beneficiary disbursement accounts through a sponsor bank. “This account will be solely managed by Sassa. These two accounts will be opened with the same bank to reduce costs and to improve the ability to transfer funds freely,” said the minister.
Regulation 21 of the Social Assistance Act makes provision for cash payment or direct transfer into the commercial bank accounts of beneficiaries.
She said CPS will by the end of this month make a list of all beneficiaries whose grants are paid into their commercial bank account.
“Sassa is currently in consultation with the National Treasury to re-establish the linkage to Bankserv to enable these payments. Once finalised, over two million beneficiaries will be paid using this method.”