Despite the intervention of national treasury in an impasse between the South African Social Security Agency (Sassa) and the Post Office, a credible deal between both parties for the payment of social grants is yet to be announced.
Instead, the inter-ministerial committee on social security — now led by minister in the presidency Jeff Radebe — has been roped in to lead the process of phasing out the social grant payment contract of incumbent Cash Paymaster Services (CPS) in the next five months.
Radebe was appointed by President Jacob Zuma on Monday.
In his appearance before the social development committee and the standing committee on public accounts (Scopa) in parliament on Wednesday, Radebe said the inter-ministerial committee and treasury met on Tuesday and decided to fast-track the introduction of an integrated payment system between Sassa and the Post Office.
This is not a dead certainty as there are no details yet on what a social grant payment plan will look like. The departments of home affairs and state security will be part of a dedicated team to review and ensure that the payment plan is implemented.
In its engagements with treasury, the ministerial committee has also proposed a hybrid model for the payment of social grants that might see the Post Office collaborating with commercial banks in the payment of social grants. A payment and co-operation agreement between the Post Office and Sassa is expected to be signed on 17 November and presented to parliament on 21 November.
In March, the constitutional court extended CPS’s invalid contract until 31 March 2018. Come 1 April 2018, the CPS contract with Sassa must be phased out. However, delays over the last seven months to sign a contract with the Post Office or another service provider have raised fears that CPS might still be responsible for social grant payments beyond April 2018.
Although MPs welcomed the intervention of the ministerial committee, they wanted to see a finalised payment plan. They also raised concerns about the deadlock between Sassa and the Post Office being solved and want the Hawks to investigate the reasons behind the delays in confirming a deal.
Impasse
The impasse between Sassa and the Post Office relates to the latter’s ability to distribute social grants to 17m beneficiaries, worth R130bn annually.
Social development minister Bathabile Dlamini has been accused of trying to muscle out the Post Office, paving the way for an external party to be responsible for social grant payments.
Dlamini said the company doesn’t have the capacity to perform social grant payments and has proposed an open tender for the services that it couldn’t fulfil. Post Office CEO Mark Barnes has rejected Dlamini’s assertions, saying the state-owned enterprise has an adequate banking infrastructure to become the paymaster.
Earlier this month, treasury was roped in to oversee the impasse between the Sassa and the Post Office after MPs ordered both parties to return to the negotiating table to reach an agreement. Treasury was meant to report back to Scopa and the social development committee on its progress in solving the impasse. However, it instead paved the way for the ministerial committee to table a payment plan with the Post Office in parliament. Treasury is part of the committee.
- This article was originally published on Moneyweb and is used here with permission
