Despite the intervention of the National Treasury in an impasse between the South African Social Security Agency (Sassa) and the South African Post Office (Sapo), a credible deal between both parties for the payment of social grants is yet to be announced.
Instead, the Inter-Ministerial Committee (IMC) 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 in Parliament (Scopa) on Wednesday, Radebe said the IMC and Treasury met on Tuesday and decided to fast-track the introduction of an integrated payment system between Sassa and Sapo.
This is not a dead cert as there are no details yet on what a social grant payment plan will look like. The Department 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 IMC has also proposed a hybrid model for the payment of social grants that might see Sapo possibly collaborating with commercial banks in the payment of social grants. A payment and co-operation agreement between Sapo and Sassa is expected to be signed on November 17 and presented to Parliament on November 21.
In March, the Constitutional Court extended CPS’ invalid contract until March 31 2018. Come April 1 2018, the CPS contract with Sassa must be phased out. However, delays over the last seven months to sign a contract with Sapo 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 IMC, they wanted to see a finalised payment plan. They also raised concerns about the deadlock between Sassa and Sapo being solved and want the Hawks to investigate the reasons behind the delays in confirming a deal with Sapo.
The impasse between Sassa and Sapo relates to the latter’s ability to distribute social grants to 17-million beneficiaries, worth R130 billion annually.
Social Development Minister Bathabile Dlamini has been accused of trying to muscle out Sapo, paving the way for an external party to be responsible for social grant payments.
Dlamini said Sapo doesn’t have the capacity to perform social grant payments and has proposed an open tender for the services that Sapo couldn’t fulfill. Sapo 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 Sapo 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 IMC to table a payment plan with Sapo in Parliament. Treasury is part of the IMC.