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CPS looks to dump SASSA

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A panel of experts is concerned there is no clear plan on what needs to be done to reduce risk of a national SASSA crisis come 1 April.
A panel of experts is concerned there is no clear plan on what needs to be done to reduce risk of a national SASSA crisis come 1 April.

Cash Paymaster Services (CPS) is not looking to continue a business relationship with the South African Social Security Agency (SASSA) beyond 31 March.

This was revealed in the latest special report filed by a panel of experts to voice its concerns to the Constitutional Court (ConCourt) as the deadline of the CPS contract nears.

With no current alternative in the short-term for social grant payments, SASSA last week filed an affidavit with the ConCourt to request an extension of the suspension of invalidity of the CPS contract for another six months.

SASSA stated the contract needs to be extended to allow it to phase out CPS and phase in a new service provider.

However, in the report to the court, the panel of experts says it is deeply concerned about the recent developments, stating "CPS is not willing to extend its contract with SASSA beyond 31 March 2018", which the government agency is purportedly aware of.

Responding to a third progress report submitted to the court where SASSA indicated it will require CPS services for at least six months to ensure uninterrupted payments, the social grants distributor said it has a number of concerns in this regard, according to the report.

It states: "There is...no need for SASSA to continue a relationship with it beyond 1 April 2018, whether in the form of a new contract or an extension of the current contract."

Lack of cooperation

The panel of experts, appointed by the ConCourt to monitor phasing out the services of CPS, slammed SASSA's lack of cooperation on what needs to be done to meet the 1 April deadline and to reduce the risk of a national crisis come April.

Noting the difficulty in obtaining information from SASSA, the panel, which includes the auditor-general, says information relating to its concerns was submitted by concerned parties and not by the agency.

"The panel raises this matter as a concern not simply as a matter of compliance, but as a withholding of information that is material to the ability of the panel to evaluate the state of readiness of SASSA to meet the 1 April deadline.

"It is also a reflection of the lack of appreciation by both SASSA and the minister of the crisis ahead and the need for urgent and singular focus on ensuring their ability to pay grants without disruption from 1 April 2018 onwards."

Future without SASSA

According to the special report, CPS is exploring a variety of goals and future strategies that do not include entering into a contractual obligation with SASSA.

The paymaster is seemingly looking at rolling out mobile ATMs to enable the payment of social grants at cash paypoint locations.

However, it is still not clear if the mobile ATMs will be the same machines currently being used by CPS at existing paypoints, the report states.

"It seems that in terms of CPS' vision, Net1 UEPS Technologies (CPS's holding company) is intent on making financial services accessible to the previously under-banked or financially excluded, and has accordingly been planning and scheduling the redistribution of CPS resources."

CPS has been distributing SASSA payments to more than 10 million beneficiaries after it was awarded the contract in 2012. The CPS contract, which was declared invalid, would have come to an end last March, but the ConCourt suspended the order of invalidity and ordered its extension until 31 March to avoid a social grants catastrophe.

The court also ordered minister Bathabile Dlamini, the Department of Social Development and SASSA to use the time to find an alternative service provider to distribute social grants from 1 April.

As the distributor of South African social grants, CPS has faced a slew of allegations that it authorises deductions on beneficiaries' accounts. The paymaster has refuted these claims.

Ready to deliver

Meanwhile, South African Post Office (SAPO) COO Lindiwe Kwele revealed yesterday that the national postal service has begun the migration of grant beneficiaries to Postbank.

SASSA and SAPO reached an agreement in December regarding the future of social grants payments. The government entities agreed to implement a hybrid payment model that will increase the role of the banks and merchants, and reduce the role of cash payment for social grants.

Kwele said SASSA has signed off on the new card design for social grant beneficiaries and that after a purchase order is issued to the preferred bidder on Friday, the first batch of two million cards is expected to be delivered on 16 March.

After this, two million cards will be delivered every three weeks until a total order of 10.6 million cards has been delivered by 8 June, she noted.

"The migration of beneficiaries to Postbank accounts has commenced and is being prioritised and monitored weekly."

Kwele added: "SAPO is compliant with the terms and conditions of the service agreement signed on the 8th of December 2017. SAPO has the capacity to deliver on its mandate or obligations. SAPO and Postbank do have the necessary funding to implement the project. An aggressive communications and marketing campaign is under way."

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