Registered users can save articles to their personal articles list. Login here or sign up here

Treasury says Net1’s welfare charge is too high

Treasury recommends that Net1 be paid 24% less than requested to pay Sassa recipients for a further six months.

South Africa’s National Treasury has recommended that Net1 UEPS Technologies Inc. be paid 24% less than it’s requesting for a six month extension to pay social welfare grants at cash pay points.

In documents submitted to the Constitutional Court, the country’s Finance Minister Nhlanhla Nene recommended that the company’s Cash Paymaster Services unit be paid a monthly R51 rand per welfare recipient at a cash pay point compared with the company’s request for R66.70. It also said that CPS had failed to furnish it with “material information.”

The South African Social Security Agency (Sassa) requested the extension after if failed to make adequate arrangements for a replacement for Net1. A tender to do so has been canceled because of complaints about the omission of information by Sassa and will be reissued, Social Development Minister Susan Shabangu said in court documents last week.

South Africa is seeking a new distributor of social security payments that cost the government more than R150 billion annually, after the Constitutional Court ruled in 2014 that the contract with Net1 was unconstitutional because correct processes weren’t followed.

Sassa failed to find a new service provider and the court intervened again last year to demand that action be taken amid accusations by civil society organizations that Net1 used the information it gleaned on grant recipients to sell services to some of the country’s poorest and least literate people. Net1 denied the allegations.

The ruling African National Congress has held up the social security program as one of its greatest successes to alleviate poverty in one of the world’s most unequal nations. An interruption in the processing of payments could undermine the party’s support in national elections next year.

Former Social Development Minister Bathabile Dlamini has been asked by the court to explain why she shouldn’t pay the costs of the court cases personally because of her negligence.

Nene also recommended that Net1 receive R19.48 for other methods of payment and R108.75 for the enrollment of new welfare recipients.

Currently 2.25 million out of 10.85 million recipients are paid at cash pay points, Sassa said in a separate court document.

The agency is also in a dispute with Grindrod Bank over the fee it charges to pay 5.34 million recipients through the so-called Sassa card. Grindrod raised its monthly fee per recipient to R10 rand from R6.91 without telling the agency, Sassa said, adding that it has demanded that the lower fee be used.

© 2018 Bloomberg L.P

COMMENTS   4

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up for FREE

If Net1 not happy they should simply walk away.

Let the post office do the deed

I question if everyone will be outraged when the post office screws it up.

Ja – why net 1 did not walk away from this bunch of imbeciles 3 years ago I do not know!!!!

True casper1; but the nice thing about imbeciles is that they are easy (and cheap) to milk. But the cow is now getting old and too many questions are being asked – you can only give ConCourt suckers the finger so many times. Rather put their weight behind SASSA diverting to the “post office” (who can’t even do post) then sign up a deal to do the admin for them (the po) with their (net1’s) existing systems. He he.

Load All 4 Comments
End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
Insider GOLD
ONLY R63pm

Moneyweb's premium subscription is a membership service which will give you access to a number of tools to take charge of your investments.
Or choose a yearly subscription at R630pa - SAVE R126

Get instant access to all our tools and content. Monthly subscription can be suspended at any time.

Podcasts

GO TO SHOP CART

Follow us:

Search Articles:Advanced Search
Click a Company:
server: 172.17.0.2