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SASSA, CPS in tiff over R1bn claims

SASSA is in hot water following allegations it owes CPS R1 billion for breaching contract terms.
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SASSA is in hot water following allegations it owes CPS R1 billion for breaching contract terms.

The South African Social Security Agency (SASSA) has hit back at Cash Paymaster Services (CPS) following allegations it owes the government-contracted distributor over R1 billion.

Yesterday, the Mail & Guardian reported that CPS has claimed SASSA owes it over R1 billion as a result of a breach of the terms of social grant payment services contracts.

Cash Paymaster Services alleges SASSA breached contracts concluded in 2009 for the Eastern Cape, KwaZulu-Natal, Limpopo, Northern Cape and North West. It is reported the contracts were breached when beneficiaries were moved from receiving their grants at CPS pay points to commercial banks.

However, the social security agency has rejected CPS's claims.

In a statement, SASSA says the initial amount claimed by CPS was R1.3 billion and the claim has since decreased to R792 853 000, after CPS withdrew its other claims.

According to the agency, the parties have attempted several times to have these matters settled, with SASSA preferring the withdrawal of each matter without any form of payment. However, the discussions did not succeed, leading to arbitration proceedings.

Pearl Bengu, acting SASSA CEO, says in the statement: "Upon rejection of the claims by SASSA, the parties agreed that the matters be referred for arbitration as provided for in the contracts. The arbitration proceedings involved the exchange of pleadings, appointment of presiding officers, holding of pre-arbitration meetings and the actual setting down of the arbitration proceedings for hearing.

"CPS has recently confirmed it is no longer proceeding with its claims for the Eastern Cape, KwaZulu-Natal and Northern Cape regions. This consequently led to the withdrawal of the agency's counter-claim," she adds.

The agency further notes the parties had some disputes over the process to be followed when appointing arbitrators, which led to the undertaking being prolonged. However, the arbitrators for each matter were finally appointed.

Meetings aimed at resolving the matter for Limpopo and North West have been postponed to July, states SASSA.

"Manipulating the poor"

Meanwhile, the Organisation Undoing Tax Abuse (Outa) has slammed social development minister Bathabile Dlamini's ongoing manipulation of the needs of the poor to suit her own agenda.

According to Outa, the December report handed to the Constitutional Court (ConCourt) revealed that Dlamini and SASSA are refusing to prepare for the exit of CPS as the social grants distributor.

In December, Jeff Radebe, minister in the presidency and chairperson of the Inter-Ministerial Committee, announced SA's national postal service as the official distributor of SASSA grants, effective 1 April 2018.

Outa points out that Bengu and Dlamini told the ConCourt the contract with CPS needs to run for "at least" another six months beyond the 31 March deadline.

"This delay makes the situation even worse and appears to be an attempt to force the Constitutional Court to accept an extension to the illegal CPS contract," says Dominique Msibi, Outa's portfolio manager for social services and special projects.

Outa has urged the ConCourt to prevent any further extensions to the illegal contract with CPS and to hold Dlamini personally accountable for engineering the grants payment crisis.

Simnikiwe Mzekandaba
IT in government editor

Simnikiwe Mzekandaba is the IT in government editor at ITWeb. She reports on tech initiatives, policies and digital transformation strategies in government, banking and education. She holds an Honours degree in Journalism from Rhodes University. Behind that smile, she is plotting how best to get government officials to respond to her emails before deadline :)

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